Brugmann vs. New Times

San Francisco Bay Guardian editor/publisher Bruce B. Brugmann is kicking his campaign against the New Times-Village Voice merger into higher gear. His paper is in competition with the NT-owned SF Weekly. (Here in Los Angeles, the LA Weekly would likely be greatly affected by the pending merger.) In an email to alt-weeklies in California, Brugmann urges them to run the following editorial (or something like it) demanding that Attorney General Bill Lockyer intervene on anti-competitive grounds.

The United States Justice Department is reviewing the proposed merger between New Times and Village Voice Media, a deal that would create a 17-paper alternative newspaper chain and do incalculable damage to the alternative press in this country. There's a chance that the federal regulators will recognize the obvious media-concentration and anticompetitive issues and delay or block the deal.

But this is not an administration known for its close scrutiny of big corporate mergers, and most observers say that the biggest and most damaging consolidation in the history of the alternative press will sail through Washington, DC, unimpeded, without a full investigation and without public hearings. That's why it's absolutely critical that California Attorney General Bill Lockyer, who also has jurisdiction over the deal, step in to stop it from happening.

Lockyer's office was a party to the consent decree that VVM and New Times signed in 2003, after the Justice Department and the attorneys general of California and Ohio intervened to halt an illegal market-allocation scheme involving papers in Los Angeles and Cleveland. New Times had agreed to close its paper in LA, giving VVM an alt-weekly monopoly in that market, and in exchange, VVM closed its Cleveland paper, which had competed with a New Times publication.

That decree includes clear language that should bar the merger from going forward. It requires that the two parties notify the California attorney general before entering into any joint business ventures in the state, and directs that:

"Each defendant, its officers, directors, agents, and employees, acting or claiming to act on behalf and successors and all other persons acting or claiming to act on its behalf, are enjoined and restrained from, in any manner, directly or indirectly, entering into, continuing, maintaining, or renewing any market or customer allocation agreement, or from engaging in any other combination, conspiracy, contract, agreement, understanding or concert of action having a similar purpose or effect, and from adopting or following any practice, plan, program, or device having a similar purpose or effect."

What the legalese means is that New Times and VVM can't conspire to allocate markets in an anticompetitive way in California - and the merger would amount to exactly that.

Four of the markets that would be most directly affected - San Francisco, the East Bay, Los Angeles, and Orange County - are in California. New Times operates SF Weekly and the East Bay Express, and VVM owns the LA Weekly and the OC Weekly, in Orange County. New Times also has business interests in the San Jose and San Diego markets: The alt-weeklies there are members of the Ruxton Group, the national advertising sales outfit owned by New Times.

In fact, the merged company would reach 29 percent of all alt-weekly readers in California. That's more market dominance than Knight-Ridder, which reaches roughly 27 percent of all daily readers in the state.

Nationally, the New Times-VVM company would reach between 22 and 25 percent of alt-weekly readership. Gannett, the largest daily chain, reaches only 13.8 percent of daily readers.

So the merger would give the new company extensive reach - and through Ruxton, it would be able to allocate customers and share revenue within some of the biggest and most important media markets in the state.

More important, New Times has made it very clear that the goal of the company is to eliminate competition and control entire markets. That's what the LA-Cleveland deal was all about, and that's what New Times is trying to do in San Francisco, where the Bay Guardian has been forced to sue to stop a pattern of illegal predatory pricing.

It all sounds exactly like what Lockyer complained about in his original Jan. 27, 2003 complaint, which charged that the actions of New Times and VVM "have the further result of depriving the economy and the general public of the benefits which accrue from healthy competition."

If this merger goes through, a company with a proven pattern of antitrust violations would be in a strong position to increase media concentration, damage competition, and hurt readers and advertisers in at least two California markets. It would add to the homogenization of media in the state and damage the vigorous marketplace of ideas envisioned in the First Amendment. One example: New Times, by its own admission and proclamation, will wipe out the endorsements and editorials at the LA Weekly, thus depriving the community of a strong voice for progressive causes and against the war.

Since the Bay Guardian was founded, in l966, the alternative press has become a vigorous and indispensable part of the politics and culture of California, a state dominated by out-of-state chain dailies. There are more alternative papers in California than in any other state, 23 in total, from the Chico News and Review, in the north, to the San Diego Reader, in the south. And most, in their own ways, have been on a special First Amendment mission, working to be alternatives to and competitive with the local monopoly daily paper and working in their communities to be a major force for positive change.

The Bush Administration would be happy to wreck all that, to see that the alternative press is subsumed into a neocon corporate-chain culture and the independents jacked up against the wall.

California's attorney general doesn't need to take his lead from Bush and doesn't need to let New Times and VVM make a mockery of the original complaint, consent decree and moratorium on further conspiratorial, antitrust and anticompetitive activities between the two chains. Lockyer needs to do the right thing, employ the logic and rationale of his 2003 arguments, and exercise his power to stop the merger.

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