It’s good to hear from Mike Lacey [see 9-16-04 letter to AAN News], who never responds when I try to contact him in advance for comment on a story. Since I’m so happy that he’s graced us with his comments, I’ll let his letter stand on its own, except for a couple of points.
The plaintiffs in this case assert in court filings that the New Times-Village Voice Media deal was illegal. I reported that fact in my story. For the record, the plaintiffs aren’t the only ones who make that claim: the U.S. Justice Department and the attorneys general of California and Ohio also charged that the deal was a violation of antitrust law. As California A.G. Bill Lockyer noted Jan. 27, 2003, “these companies entered into an unlawful agreement to swap markets and customers.”
The case was settled without New Times and VVM ever admitting guilt; that’s often how it works in these legal arrangements. But the settlement was hardly a trifle. The two companies had to accept an injunction against what the Justice Department’s Feb. 3, 2003, Competitive Impact Statement called “any actions in furtherance of, or required under, their per se illegal market allocation agreement.” They were required to divest all of the assets of New Times L.A. and the Cleveland Free Times so as to allow a viable competitor to enter those markets, to notify the Justice Department of any further acquisitions or sales for five years, to void any non-compete contracts with employees from L.A. or Cleveland, and to pay a fine.
Don’t take my word for it; you can find the Justice Department complaint, which lays all of this out, at http://www.sfbg.com/37/18/complaint.html.
There’s another fact Lacey conveniently leaves out of his letter. New Times didn’t just innocently sell its L.A. paper to VVM and use that money to purchase a paper in Cleveland; the deal was for both sides to shut those papers down to end competition in the markets. That’s what was so sleazy — and was, in the opinion of a lot of government and private-sector media law experts, and even non-lawyers like me, a per se and obvious violation of the Sherman antitrust act.
San Francisco Bay Guardian