In the conclusion to the unprecedented antitrust probe of the two alt-weekly chains, neither company admitted guilt but agreed to aid the opening of new weekly papers in Los Angeles and Cleveland. The New York Times' David Carr calls the case "a validation of the growing role of the alternative press in an era when many dailies now own monopolies in their respective markets." New Times officials expressed outrage at the government's actions in the case. "The way that it has been told, this was two fat cats getting together so they could get even fatter, but the fact of the matter is, we would not be here if we had not done this deal," says New Times' CEO Jim Larkin, who reveals that $20 million of losses in Cleveland and Los Angeles had put the company in technical default with its lending agreements.
Los Angeles County Dist. Atty. Steve Cooley calls a column by LA Weekly's Harold Meyerson and a letter to the editor of the Wall Street Journal written by New Times' Michael Lacey "self-interested positions staked out by those who are directly affected by this investigation." Cooley claims he reads LA Weekly "because it is a valuable news organ" and says New Times LA was "occasionally very funny, on occasion very insightful, on occasion very cruel." He argues that "It's wrong ... to attribute political motives to government agencies that are just doing their jobs. ... we're at the investigative stage. At the end of the exercise, there may be a determination that what's been uncovered falls short of establishing a violation of the law."
The Justice Department's investigation of the Village Voice Media-New Times deal to close weeklies in Cleveland and Los Angeles is apparently driven by a concern "that the assisted suicide of New Times in Los Angeles reflects a narrowing of political perspectives in the city, and that it is the government's responsibility to create more ideological space," Harold Meyerson writes. He adds that if investigators really looked they would find at least as much "ideologically driven or monomaniacal" editorial slant at the dailies as at alternative newsweeklies.
Prosecutors investigating the New Times-Village Voice Media deal that closed New Times LA and Cleveland Free Times worked through the weekend taking depositions, according to the L.A. Times' Tim Rutten. Sources familiar with the depositions told Rutten that prosecutors "repeatedly returned to questions concerning the nature of alternative journalism and the impact of New Times' closure on local news coverage." One unidentified witness said many of the prosecutors' questions "seemed to be driven by their belief that unlike a mainstream daily newspaper, an alternative weekly is suffused throughout with a particular point of view. They seem to believe that losing an alternative paper is a greater hardship to the community in that way than losing a mainstream daily."
"We're relieved the Justice Department has decided to draw a line in the sand in this case," Michael Lacey, executive editor of New Times, sarcastically tells LA business columnist, Daniel Akst. The columnist chides New Times and Village Voice Media for being sanctimonious about the evils of "big-city dailies" but concedes Lacey's point: "If a generation's worth of media consolidation is OK because of new technologies and competition between broadcasters, print outlets, the Internet and so forth, it probably shouldn't be a hanging offense that a couple of unsuccessful weeklies are closing in concert."
"Does the U.S. Department of Justice really have so little to do it must investigate why a couple of alternatives were folded?" E&P asks in a Nov. 25 editorial. With so many media outlets in both the Los Angeles and Cleveland markets where the two alternative weekly chains closed papers to end head-to-head competition, advertisers have plenty of places to go. "It's not an argument Justice can make with a straight face," E&P concludes.
Sources tell the Los Angeles Times that federal investigators may be pursuing a legal solution that would actually re-open alternative newsweeklies in Los Angeles and Cleveland, the two cities where Village Voice Media and New Times agreed to close papers and eliminate competition. The federal anti-trust investigation is "unusually fast-paced," The Times' Tim Rutten reports. "Clearly, they've decided to move before the bodies get too cold," an anti-trust attorney tells Rutten.
The Village Voice/New Times deal that closed New Times Los Angeles and VVM's Cleveland Free Times, is another sign of an "imploding economy," Cynthia Cotts writes in The Village Voice. She suggests that when VVM's venture capitalist owners start looking to cash out they could find a buyer in a daily newspaper chain or another alternative media company.
Iconoclastic alternative weeklies are doing business like the big boys, former Washington City Paper Editor David Carr writes in the New York Times. Carr reports that New Times received $8 million from Village Voice Media to close its money-losing New Times Los Angeles. "The willingness of the two ferociously competitive chains to make a deal in their common interest could mean that the next big deal by the companies could leave only one standing," Carr writes.
