Yesterday, the jury came back with a verdict in the Bay Guardian’s suit against SF Weekly for illegal predatory pricing. SF Weekly was found guilty and will have to pay the Guardian up to $15.6 million! The Weekly will of course be appealing, but this is a major win for independent media in the Bay Area.
If you haven’t been following the story, here’s the gist of it:
The trial had been underway for more than five weeks. The Guardian charged the Weekly with violating the state’s Unfair Practices Act, a Progressive-era law that bars a company from selling a product below cost for the purpose of destroying competition.
Evidence produced in the trial showed clearly that the Weekly had been selling ads below cost. In fact, the paper had lost money every year since the New Times chain, now known as Village Voice Media, bought it in 1995. Those losses totalled $25 million over the 12 years.
The Guardian produced extensive evidence that the Weekly and VVM were trying to injury the local competitor, including three witnesses who testified that they heard Mike Lacey, one of the two principals of New Times, vow to put the Guardian out of business.
The evidence produced also showed numerous internal emails discussing the Weekly’s battle plans to take ads away from the Guardian…
The jury ruled that New Times/VVM and the East Bay Express, which until recently was owned by VVM, were equally culpable in aiding the predatory sales.
The Express is now an independent paper, and VVM is liable for any damages assessed against that publication.
And here’s some of the great testimony from the trial:
The witnesses, former Weekly sales rep Jennifer Lopez, former Weekly co-publisher Carrie Fisher, and former Weekly editor Andrew O’Hehir, all described a January 1995 meeting at which Lacey arrived to tell the staff that New Times had bought the Weekly…
Lacey launched into a profanity-laced diatribe, Fisher testified, “insulting the office space, insulting the neighborhood and making comments on the quality of the writing” in what was then a small locally owned paper.
At one point, she said, Lacey picked up a copy of the Bay Guardian, threw it on the floor and said “we don’t just want to compete, we want to put the Guardian out of business.” While she said she couldn’t swear to the exactly language Lacey used, “the gist of what he said was very clear.”
If you want to read more of the testimony, which is not only informative but also entertaining at times, check out the February archives of the SFBG Politics Blog.
What does this mean for news in Oakland? Probably nothing for now, since the East Bay Express, even as an independent weekly, doesn’t do such a great job covering local news. But regardless of what you think of the Guardian, this is an important win for independent media everywhere.
This is a bit off topic, but I just noticed that the Guardian started the Chauncey Bailey Project, “an investigative team that will continue and expand on the reporting Bailey was pursuing at the time of his death.” It’s been up there for a while, but if you haven’t seen it yet, check it out.