SF Weekly

Mike Lacey ducks the big ones

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I missed the trial on Friday, so if the SF Weekly’s hit man, Andy Van De Voorde, wants to take a swing at me for posting information on the testimony, fine: I’m smiling, Andy. (I’m also not the only person in the courtroom from the Guardian who knows what’s going on and can take notes.)

But before we get to the day’s events, let me do my all-too-regular Van De Voorde correction file. From his most recent blog:

“What’s your official title?” asked Weekly attorney H. Sinclair Kerr Jr. in what is a traditional first question for witnesses.

“I’m the executive editor of the company and apparently the mascot,” Lacey replied.

The remark was a reference to testimony from Guardian executive editor Tim Redmond, who last week said under oath he thought of Lacey as a New Times mascot.

Um, no Andy. I didn’t say that, under oath or otherwise. That testimony was from Jennifer Lopez, who used to work for the SF Weekly.

And jeez, Andy’s in court every day.

Another correction:

[Guardian attorney Ralph] Alldredge was also skeptical about why [New Times CEO Jim] Larkin hasn’t attended the trial—an odd question given that he could have subpoenaed the New Times executive.

Actually, Andy, you might check with your lawyers: This is a California case, and as long as Larkin doesn’t live here and can’t be found within the borders of the state, we can’t subpoena him. Interesting that he hasn’t shown up once for the trial; if he had, we could have compelled him to take the stand and answer a few questions.

Now then, since we have that cleared up, let me go to the day’s events. Here’s our report:

Mike Lacey took the stand in the Guardian’s predatory pricing trial against the SF Weekly and had some trouble answering some key questions.

The editor in chief of the SF Weekly’s parent chain, the VVM/New Times/SF Weekly, said at one point that the SF Weekly was a better paper in “most all respects” to its competitor, the Guardian.

Lacey said that the Weekly was better in layout, stories, design, graphics, readers, everything. Also, he said that the Guardian was “obsessed with City Hall and City Hall minutiae” and the city was full of young people who didn’t vote and weren’t interested in politics and they came to the Weekly.

If the Weekly is such a better paper, Guardian Attorney Ralph Alldredge prodded on cross examination, why does the Weekly sell its advertising at rates so much lower than the Guardian? Why doesn’t a Weekly advertising sales person sell its advertising space at a rate higher than the Guardian? Why doesn’t the Weekly command a premium price?

Lacey ducked the questions.

Predatory pricing: A primer

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The jury in the Guardian’s lawsuit against the SF Weekly got a primer today on how prdatory pricing by a big chain works.

Guardian controller Sandy Lange took the stand, and outlined the results of information she’d compiled on below-cost sales by the Weekly and the East Bay Express. The Guardian is charging that Village Voice Media, formerly known as New Times, which owns the Weekly and until recently owned the Express, has been selling ads below the cost of producing them to harm a competitor.

That’s a violation of California law.

Lange explained how she and other Guardian staffers and legal assistants had entered into an Excel spreadsheet some 20,000 sales transactions from the Weekly and the Guardian, involving 128 accounts, over eight years, from 1999 to 2007. In each case, the computer tracked whether the Weekly’s ads were sold below cost — and how often those cut-rate sales were linked to the Guardian either losing a client or being forced to cut prices to salvage the deal.

The spreadsheet showed that in 91 percent of the transactions, the Weekly’s sale price was below cost. That’s consistent with data Lange presenting showing that the Weekly had consistently lost money. In 2003, she noted, the cost of producing a page of the SF Weekly was $1,936.17 — and the paper’s revenue was just $1,634.36. That meant the Weekly was losing about $300 for every page it produced. A few years later, the gap had grown: The cost of producing a page was $2,730 and the revenue was $1,900 — meaning the Weekly was losing $800 a page.

How was this possible? Simple: The chain kept pouring in money from its 15 other markets to prop up San Francisco and the East Bay.

Then Lange explained her correlation report: In 34 percent of the transactions involving below-cost sales, the Weekly’s rate-cutting was associated with the Guardian deeply discounting its own ads (threatening the financial viability of a local paper with no deep-pockets parent). And when she added in the accounts that the Guardian lost entirely after the Weekly’s predatory pricing, the total came to 66 percent.

In other words, in two-thirds of the cases where the Weekly had sold below cost, the Guardian had either had to follow suit and sell for less than the ads were worth — or lost the account and the business.

Lange also presented charts that showed how the predatory behavior had eroded the Guardian’s share of the local alternative-weekly ad market.

On cross-examination, Weekly attorney Ivo Labar tried to argue that the market itself had shrunk. In 2000, he pointed out, the two papers together sold $13 million worth of display ads. By 2007, that number had shrunk to $8.8 million. “Isn’t it true,” Labar asked, “that advertisers chose to spend only $8.8 million in 2007?”

Lange said she disagreed with the premise of the question. “Because of your predatory pricing,” she testified, “you put negative pressure on the market.” In other words, the Weekly depressed the costs of all alt-weekly ads in San Francisco.

Labar then pointed to a handful of accounts in which the Weekly either sold ads for a higher price than the Guardian or the Guardian appeared to have lost the business for reasons that had nothing to do with price, and tried to discredit the entire report on the basis of a few examples. That’s been the Weekly’s practice in this case: Take a clear trend (years of below-cost pricing) and clear results (damage to the Guardian) and try to poo-poo it by saying there are a few cases here and there that don’t fit the pattern.

Lange’s testimony will continue tomorrow morning.

Guardian vs. SF Weekly: The Lawsuit

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@@http://www.sfbg.com/lawsuit@@

Gee, the SF Weekly is bored

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Some interesting evidence emerged in the Guardian’s lawsuit against the SF Weekly and its corporate parent today, most of it in the form of depositions from witnesses. If you were looking for the kind of drama we had yesterday, this was fairly mundane stuff — but if you listened to what a former publisher of the Weekly said in his depositions, it showed exactly why this case has gone to trial.

Before I start on that, though, one note: I’m trying to play this fairly straight, and not get into personality stuff, but I have to say: The Weekly’s hit man, Dandy Andy Van De Voorde, is … how else can I say this? Making stuff up.

From the lead of his blog (if you can call it that) tonight:

After yesterday’s fireworks from Bruce Brugmann, Guardian attorneys returned to their plodding ways Wednesday, subjecting the jury to an entire day of testimony from witnesses who weren’t there.

Brugmann, who treated the court to a three-hour display that included spluttering, shouting and fist pounding yesterday, sat quietly in the gallery as his lawyers put on a noticeably dull performance that had at least two jurors visibly napping at times

Um … I was there yesterday, and I can say with absolute certainty that Bruce Brugmann never once pounded anything with his fist and never shouted. That’s just wrong. It didn’t happen. (I don’t know what “sputtering” is, so I can’t comment on that.)

And Andy: Most bloggers use links to connect to other stuff they’re talking about. You’ve blasted me a few times, but your poor readers don’t have the help of these simple little bits of HTML code that let you go from one blog to another so they can see what you’re attacking. It’s not that hard; I bet someone at your 16-paper chain could teach you how to do it.

Now then, back to the story:

Most of the morning was devoted to the (admittedly unexciting) reading of the deposition of Chris Keating, who until early 2007 was publisher of the SF Weekly and group publisher for the Weekly and the East Bay Express. Keating started out the deposition insisting that when he came to San Francisco (and to a paper that was losing lots of money) he was determined to control expenses and bring them into line with revenues.

In fact, he testified, one of his primary goals was to raise ad rates.

But somehow, that didn’t happen. The losses kept rising — and, apparently with Keating’s permission, the Weekly continued to sell ads below cost.

In fact, Keating admitted that “given the level of costs, [the Weekly was] not pricing at a level to cover those costs.”

In other words, the Village Voice Media chain, which owned the Weekly, was selling ads below what it cost to produce them.

There are three elements required to prove the Guardian’s case: The Weekly and Express had to be selling ads below cost, for the purpose of harming a competitor, and there had to be damages.

Keating as much as admitted to the first part.

Then he proceeded to come close to admitting to the second.

In a Sept. 26, 2005 email that was presented to the jury, Keating, discussing a national ad buy, said the Weekly and Express “would give the most amount of rate break to get the business over the Guardian. If that means I net $18 an inch I’ll take it.”

Keating had previously said that the Weekly needed to sell ads for at least $18.75 to $19.25 an inch to make any profit.

And his deposition was filled with references the the Guardian as the Weekly’s main competitor (a fact that undermines the chain’s argument that the San Francisco market is so diversified that the head-to-head between the Guardian and the Weekly is only a small part of the competitive landscape.)

Evidence admitted this morning showed that the Weekly prepared regular “Guardian reports” on how the locally owned paper was doing in ad count — and that there was no other competitor that rated that sort of treatment.

The Guardian lawyers also presented parts of the deposition of Jed Brunst, the chain’s top financial officer, who was asked what happened when the Weekly was losing money and couldn’t pay its bills. Simple, he said: The Weekly got “cash advances from the parent.”

Did those “advances,” he was asked, come with promissory notes or anything else that would suggest they were loans?

No, Brunst said. Nothing like that.

In other words, the chain was propping up a money-losing operating in San Francisco, which was selling ads below cost in an effort to get the business away from the Guardian.

That’s quite a set of admissions. Sorry Dandy Andy was bored.

Weekly tries a “gotcha” — and fails

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It was a wild day in court in the Guardian’s lawsuit against the SF Weekly. Bruce Brugmann took the stand. He generally made the SF Weekly’s lawyer look silly – but the Weekly’s out-of-town hit man, Andy Van De Voorde, was almost giddy with his attempts to say that Bruce Brugmann did poorly as a witness.

I’m biased, of course (so is the hit man), but I have to disagree: Bruce laid out the Guardian’s history, explained how the Weekly had attacked us, and stood up remarkably well under a cross-examination that may have given Van De Voorde something to write about, but didn’t really present many relevant facts to the jury.

Several times during cross examination, Weekly attorney H. Sinclair Kerr tried to pull the legal equivalent of a “gotcha.” He kept pushing the notion that the media marketplace in San Francisco is so crowded with so many competitors that the Weekly and the Guardian really aren’t fighting over a discrete slice of that market. Bruce had none of it. Kerr kept trying to get Bruce to talk about competition in general and kept trying to get him to admit that the Weekly isn’t our biggest or most important competitor; Bruce would have none of it.

“I’m talking about competition in general,” Kerr said at one point.
“Well, I’m talking about competition with New Times,” Bruce replied.

Kerr tried to say Bruce wasn’t much of a publisher because he didn’t go on sales calls, but Bruce made quick work of that, too, saying that he was the Guardian’s editor as well, that editors generally don’t do sales calls, that we have a sales staff to do that, and besides “I’m a busy guy – I’m blogging.”

The jury members laughed.

Guardian trial heats up

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› tredmond@sfbg.com

The fireworks have started to explode in the trial of the Guardian‘s lawsuit against the SF Weekly and its chain parent corporation as three witnesses testified that the chain’s top executive had vowed to put the Guardian out of business.

Lawyers for the Weekly and Village Voice Media, which owns the San Francisco paper and 15 others, tried aggressively to undermine the critical testimony. The Guardian is claiming the SF Weekly sold ads below cost for years in an effort to damage the local competitor. That’s illegal in California.

The Weekly lawyers aren’t putting up much of a fight so far over whether the paper sold ads at such cheap rates that it was losing money. In fact, evidence presented in court shows that VVM has lost $25 million over the past 11 years in San Francisco and the East Bay, where the chain until recently owned the East Bay Express.

But VVM lawyers H. Sinclair Kerr and Ivo Labar have contended the Weekly and the Express were simply cutting rates to meet competition or were trying to increase market share — and harming a competitor was never a motivation.

Three Guardian witnesses provided evidence to the contrary. Jennifer Lopez, Carrie Fisher, and Andrew O’Hehir all worked for the Weekly when the chain, then known as New Times, bought it in 1995. Lopez sold ads, Fisher was copublisher, and O’Hehir was the editor.

All three testified that Mike Lacey, one of the two top executives at the chain, arrived at the Weekly offices in January 1995 to announce the sale and told a meeting of the staff that he intended to wipe out the local competitor. At one point, Fisher said, Lacey picked up a copy of the Guardian, threw it on the floor, and said, "We don’t just want to compete — we want to put the Guardian out of business."

Two of the early witnesses were Guardian copublisher Jean Dibble and me. Dibble talked about how the paper had survived recessions, economic changes, and legions of competitors over the years but was put on the ropes by the chain’s predatory tactics. I talked about the impact — how the Guardian, which has to live on its revenue and has no chain with deep pockets to subsidize it, has been forced to cut costs, lay off staff, and reduce the size of the paper.

Kerr and Labar pushed us both, trying to make the case that it was the rise of the Internet and the changing demographics of the city that caused the Guardian‘s problems. But in fact, Dibble stated, the Guardian has lost very little display advertising business to the Internet.

On Feb. 4 the Guardian lawyers read from the depositions of Jim Larkin, VVM’s chairman, and Scott Tobias, the chain’s president. Among the fascinating information: Larkin testified that VVM paid between $5 million and $6 million for the East Bay Express and sold it for around $3 million, taking a big loss on the deal. Larkin also said both the Weekly and the Express were profitable when the chain bought them but that they’ve lost money ever since.

Most important, both Larkin and Tobias testified that they received monthly "Guardian reports" focusing on how the Weekly and the Express had been competing with the local alternative newspaper in San Francisco. The depositions were riddled with references to the Guardian as the two VVM papers’ main competitor — which undermines the claim by VVM lawyers that the chain papers were focused on a broad range of other media, not just the alternative-paper market.

In one instance, the depositions show, VVM cut a deal with Clear Channel for naming rights at the Warfield theater that specifically stated the Weekly and the Express would get 85 to 90 percent of the ads from concert promoter Bill Graham Presents, then owned by Clear Channel — and the Guardian would get "15 percent to nothing."

The next phase of the trial will focus on financial data, as the Guardian presents records to the jury that show how the Weekly and the Express were consistently selling ads below cost.

Lacey: I’ll bury the Guardian

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lacey.jpg
Mike Lacey, waving, is flanked by attorneys Ivo Labar and H. Sinclair Kerr, left, and Don Moon (who actually IS wearing a puffy coat) right, after hearing testimony about how Lacey told SF Weekly staffers that he wanted to put the Guardian out of business. Photo By Luke Thomas, fogcityjournal.

Three witnesses have testified in the Guardian v. SF Weekly trial that they heard Mike Lacey, a top executive with the chain that owns the Weekly, say he wanted to put the Guardian out of business.

That’s a key part of the case: The Guardian has to prove that the Weekly sold ads below cost – which isn’t much in dispute, since the chain has essentially admitted it – for the purpose of injuring a competitor. The evidence that Lacey, executive editor and one of the two primary owners of Village Voice Media (formerly New Times) intended to damage the Guardian bolsters that point.

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, along with Jim Larkin, the chain’s other top exec, marched into the Weekly office on Brannan street “with a very intimidating entrance,” Fisher testified. With Lacey and Larkin were Hal Smith, who headed up the chain’s ad sales, and Patty Calhoun, the editor of Westword, a New Times paper.

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.”

Jennifer Lopez, who was a sales rep, testified to the same point yesterday.
Andrew O’Hehir, who was editor of the SF Weekly at the time of New Times purchase in l995, confirmed that story, describing Lacey throwing the Guardian on the floor and saying that the New Times was coming to San Francisco to “bury the Bay Guardian.”

O’Hehir said that Lacey told the Weekly staff that the New Times had “deep pockets and deep resources” and would compete aggressively on both editorial and business fronts with the Guardian, the dominant alternative in San Francisco.

“We intend to beat the Guardian,” he quoted Lacey as saying. In answer to a question a question about the “future relations with the Guardian,” Lacey said that “we are going to bury the Bay Guardian. We would like to put the Bay Guardian out of business.” O’Hehir is now living in New York City and working as columnist for Salon, the online magazine.

H. Sinclair Kerr, attorney for VVM/New Times, sought to minimize the impact of Lacey’s quote by suggesting that Lacey was like a coach coming in to “fire up the team.” No, replied E. Craig Moody, Guardian attorney — in the case of the old Weekly the team was “quickly disbanded.”

In fact, O’Heir was soon fired and most of the rest of the staff either quit or were fired.

The last event of the day was the reading of the deposition of Jim Larkin, the CEO of VVM/New Times. Richard Hill, a Guardian attorney, read the questions from the deposition that he took earlier this year in Larkin’s Phoenix, Arizona office. Ralph Alldredge, another Guardian attorney, sat in the witness box and played Larkin to Hill’s questions.

Larkin admitted in his deposition that the New Times was in a rate battle with the Bay Guardian in San Francisco, but refused to acknowledge that the chain had an advantage because of its size and assets.

Larkin had trouble remember lots of things. He couldn’t remember the Bay Guardian Report that the Weekly publisher prepared each week and sent to him. He was at the Lacey meeting but he couldn’t remember what Lacey about the Guardian or even what Lacey said about anything at the meeting. He denied ever saying he was “going to run the Bay Guardian out of business.”

Larkin also refused to say if he ever put a floor under the Weekly’s below cost sales.

“I try to make money,” he said. “I try to break even. I don’t do things this way.”

Well, if Larkin and his publishers at the SF Weekly and the East Bay Express were operating under Larkin’s mandate to make money, something was going very wrong, because the chain lost $25 million dollars over 11 years, without having one profitable year.

The Guardian claims this is no coincidence – the chain was willing to lose money through below-cost sales in an effort to harm a local competitor, which is illegal under California business law.

The jury trial continues Monday morning at 8:30 before Superior Court Judge Marla Miller.

PS: Andy Van De Voorde is not only nasty, he has no sense of humor. Jesus, Andy, I’m nowhere near cool enough to wear a puffy coat. I do, however, put either my Langlitz Leathers bomber jacket (made by a locally owned independent business) or a waterproof ski jacket over my clothes when it’s pouring rain.

Lighten up, Andy.

Guardian v. SF Weekly update

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I wasn’t in court today in the Guardian’s lawsuit against the SF Weekly and its corporate parent – the lawyers for Weekly wanted me to stay out of the courtroom because they might call me back as their own witness later (I look forward to it, guys). Judge Marla Miller ruled later that I could, indeed, attend in the future, so I’ll continue my first-hand accounts shortly.

Meanwhile, other Guardian representatives were there today, and I’ve gotten a report:

Jody Colley, the Guardian’s former sales and marketing manager, testified about her problems fighting the low advertising prices of the SF Weekly/VVM/New Times during her seven years at the Guardian.
Then she testified, as the new publisher of the East Bay Express,
about the challenges she faces in trying to increase the “unacceptably low prices” that she inherited from the

VVM/New Times ownership of the EBX. The paper was purchased in May 2007 by an independent group headed by Hal Brody.

EBX had losses of $l3 million during its six years of New Times ownership. The SF Weekly and EBX combined lost $25 million during the 11 years of New Times ownership, according to financial exhibits presented by the Guardian. This was evidence of consistent below-cost pricing.

Colley testified that she had agreed to honor the New Times advertising contracts with the EBX, but ran into difficulties because of their low prices. One example that she gave involved the Bill Graham Presents/Clear Channel concert advertising contract. She asked for a copy of the contract but neither BGP nor SF Weekly publisher Josh Fromson would give it to her. She then went directly to BGP to renegotiate the rates, but the company refused.

The trial continues at 8:30 a.m. Friday in the Superior Court of Judge Marla Miller. Carrie Fisher, associate publisher of the SF Weekly at the time of the sale in l995, and Guardian advertising rep Mary Samson are scheduled to testify.

STOP THE PRESSES: Mike Lacey, the executive of the VVM/New Times chain, was given a new title at the hearing.

It was bestowed by Jennifer Lopez, former SF Weekly and Guardian advertising sales rep. She was testified that Lacey, at a meeting of the SF Weekly staff at the time of the New Times purchase in l995, called the Guardian “a piece of shit” and threw the Guardian on the floor and stomped on it. She quoted him as saying, “We want to be the only game in town.” Then Craig Moody, a Guardian attorney, asked her if Lacey was speaking for the New Times and who he was.

She said she thought he was “the mascot for the New Times.”

By the way (and that concludes the court report, and it’s back to me again): VVM, the chain formerly known as New Times, has an out-of-town hit man named Andy Van De Voorde covering the trial. He was happy to take nasty swings at Jean Dibble and Colley (though he wasn’t quite so mean to me, go figure), but he still hasn’t explained why VVM/New Times was willing to lose $25 million in San Francisco, selling ads below cost for 11 years, if the goal wasn’t to damage the locally owned competitor.

I don’t want my coverage of this trial to be about Mr. Van De Voorde. I don’t expect him to be fair (and I’m sure nobody expects me to be fair, either – we work for the two parties to the case).

But I have to say: his reporting has been breathtaking in its personal viciousness. I’ve seen a lot of hit pieces over the years, and been subject to them myself, but this is another order of magnitude altogether.

Personal note to Andy: I don’t believe I own a “puffy jacket.”You might want to run a correction.

BG v SFW lawsuit: I take the stand

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I took the witness stand today to testify in the Guardian’s lawsuit against the SF Weekly and its parent, Village Voice Media, the chain formerly known as New Times. I talked about why I worked for the Guardian, why I’d stuck around for more than 25 years and why I believe in the paper’s misssion.

The point I tried to make: The Guardian is a community institution. We care about this city; we care about people and issues and arts and culture, and whether you agree or disagree with our political stands, we’re part of San Francisco — and our readers have always known that. The Weekly is part of a chain based in Phoenix.

And yeah, I think local ownership matters, and I think independent papers matter, and I think it sucks that the Weekly has been selling ads below cost and trying to hurt our ability to compete. The Weekly has been losing tons of money; when VVM/New Times owned the East Bay Express, that paper lost tons of money, too. Over the past 11 years, the chain has lost $25 million in the Bay Area. That’s what happens when you sell ads for less than the cost of producing them.

And it only works, and it only makes sense, if you have a big chain that can subsidize the losses in the hope that the locally owned competitor will be driven out of business. (That, by the way, is what this suit is all about.)

As I pointed out, I don’t have the luxury the SF Weekly editors do; I have to live with the money we make by selling ads. If that revenue goes down, I have to cut costs. The Weekly editors don’t have to meet that kind of budget; they can just get more money from headquarters.

The Weekly’s lawyer, Ivo Labar, went after me pretty hard on cross-examination. He tried that old saw that the Guardian writes too many stories about PG&E; I told him that if the Washington Post had decided that Watergate was a one-day story, American history would be very different. He suggested that I was a bad editor and that the paper was losing readers because we had nothing valuable to say. I’m afraid I have to disagree.

But in the end, the facts and the law are on our side in this case. I’ll keep you posted.

PS: BeyondChron has been doing a good job covering the trial, which, the online news outlet points out, is about more than just a business dispute — it’s crucial to the future of independent media.

Guardian lawsuit: Opening statements

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The Guardian v. SF Weekly trial swung into high gear today with both sides presenting opening statements and the first Guardian witnesses taking the stand. The early presentations gave a clear sense of where the trial will go.

Ralph Alldredge, representing the Guardian, laid out the essence of the case:

Over the past 11 years, the SF Weekly, later joined by the East Bay Express, have systematically sold ads below cost. The cost-cutting was so dramatic, he said, that during that period the two papers lost a total of $25 million, and those losses have been escalating.

That, he explained, was not because the people who run the Weekly and ran the Express are bad managers. It’s because they were attempting to damage the locally owned competitor. “If you’re not trying to make a profit,” he asked, “what are you trying to do?”

In fact, while the Weekly lawyers have argued consistently (and would argue later in the day) that the market is packed with different competitors, and that the Weekly didn’t see the Guardian as its only or even primary competition, internal memos show that Weekly and New Times staffers were obsessed with beating the Guardian. The memos consistently refer to the “battle” and “the way” and use terms like “frontal assault.” And those memos weren’t discussing the entire universe of competition – they focused only on the Guardian.

In fact, New Times executives put together a quarterly “Guardian report” focused entirely on how well the Weekly was doing taking ads away from the local paper.

In just one instance that Alldredge mentioned, The Weekly inked a deal with Clear Channel in 2005 that was designed in part to take ads away from the Guardian. Under the terms of the deal, the Weekly would get the bulk of the company’s alternative weekly ads – and “the competing paper [the Guardian],” a memo from a Clear Channel official states, “gets 15% to 0.”

H. Sinclair Kerr, attorney for the Weekly, didn’t deny that his client had sold ads below cost; in fact, he admitted it, right up front. But he insisted that all of those sales were perfectly legal because they were done either to increase the paper’s market share or to meet competition.

Kerr posted a graphic showing that the Bay Area is home to more than 140 newspapers and scores of radio and TV stations, and he argued that all of those outlets were part of the Weekly’s competition. “The reason we were selling below cost,” he said, “is because that’s the only price we could get.”

However, memos from his clients that were presented by Alldredge don’t mention any other newspapers or other types of media. It appears clear from the evidence presented so far that the Weekly and New Times executives considered the Guardian their single most important competitor.

The presentations today suggest that the trial will come down to the question of intent and the damage that the Weekly and its chain owners have done to the Guardian.

Us v. SF Weekly: Some perspective

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Well, jury selection is almost complete in the Bay Guardian lawsuit against the SF Weekly. It now appears that opening arguments could begin Monday morning in Judge Marla Miller’s courtroom in San Francisco Superior Court.

Since the Weekly continues to use its blog posts on the trial as a way to bash us (and me), I was pleased to see a little bit of perspective from another source: BeyondChron.org had a nice piece by Randy Shaw that points out that the Weekly may not be a confident as its blog bluster suggests and that there are larger issues here.

Guardian v. SF Weekly: Here we go

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Lawyers for the SF Weekly failed today to get a delay in the trial of the Guardian’s lawsuit against the paper and its chain parent, Village Voice Media. So jury selection will begin Thursday morning.

The Weekly’s lawyers, H. Sinclair Kerr and Ivo Labar, argued a computer file the Guardian had turned over to them last week amounted to a huge new pile of data that would take considerable time to review. They asked Judge Marla Miller to postpone the trial for 90 days.

But the Guardian’s lawyers, Ralph Alldredge and Craig Moody, pointed out that the computer file was just an Excel spreadsheet containing data that VVM and the Guardian had exchanged some time ago. There was, they said, nothing new in the file, and Miller agreed.

The Guardian is suing the weekly for predatory pricing, arguing that the big national operation has been selling ads bleow cost in an effort to harm a locally owned, independent competitor. As part of his presentation, Alldredge noted that that Weekly lost close to $2 million in 2007, evidence that the paper continues to sell ads below cost.

Jury selection is expected to take no more than two days, and Miller has set opening arguments for Monday.

Guardian vs. SF Weekly

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It’s extraordinary how the SF Weekly can take a clear legal defeat and try to turn it into a victory.

On Jan. 17 the judge in the Guardian‘s lawsuit against the SF Weekly and its parent corporation refused to bar the Guardian‘s key expert witness from testifying. The ruling was a clear victory for the Guardian — the Weekly had tried desperately to keep accountant and economic expert Clifford Kupperberg from taking the stand to present evidence of how much the Weekly‘s predatory pricing has damaged the Guardian.

And yet the Weekly‘s Snitch blog trumpets the ruling as "The SF Bay Guardian‘s Shakedown Hits a Snag," arguing that Kupperberg had somehow repudiated his own testimony.

The Guardian is suing the SF Weekly and Village Voice Media, formerly known as New Times, for predatory pricing in violation of California business law. The suit charges that the Weekly, with cash support from the 16-paper chain, sold ads below cost for many years in an effort to harm the locally owned competitor.

The trial got under way last week with early motions on the evidence. Here’s what actually happened in Superior Court Judge Marla Miller’s courtroom Jan. 16 and 17:

Kupperberg, following well-established standards, had developed two scenarios to explain how much the Guardian has lost due to the Weekly‘s practice of selling ads below cost. One of the scenarios uses data from members of the Association of Alternative Newsweeklies, information that the papers share with one another once a year to establish industry financial benchmarks.

The SF Weekly‘s lawyers argued that part of the data — the material from the AAN — wasn’t reliable, so Kupperberg agreed to use his other standard (including New Times’ own figures in 17 different markets) instead. He also added data from two other Bay Area alternative papers and from local retail sales statistics to buttress his conclusions. His data suggest damages of $5 million to $10 million.

After the SF Weekly lawyers argued for hours that Kupperberg be disqualified, Judge Miller ruled clearly and unequivocally against them. Kupperberg will be able to testify, and his damage estimates will be admissible.

That’s a big victory for the Guardian.

And while the Weekly lawyers demanded extra time and sought to delay once again a case that’s been in the works for more than three years, Miller moved forward and started the jury selection process Jan. 17.

If this is how the SF Weekly and the VVM folks from Phoenix are going to cover the trial, we’re going to have to spend a lot of time correcting the record, although we’d prefer to simply let the case speak for itself.

Guardian v. SF Weekly: trial update

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It’s extraordinary how the SF Weekly can take a clear legal defeat and try to turn it into a victory.

Yesterday the judge in the Bay Guardian’s lawsuit against the SF Weekly and its parent corporation refused to bar the Guardian’s key expert witness from testifying. The ruling was a clear victory for the Guardian – the Weekly had tried desperately to keep accountant and economic expert Clifford Kupperberg from taking the stand to present evidence of how much the Weekly’s predatory pricing had damaged the Guardian.

And yet, the Weekly’s Snitch blog trumpets the ruling as “Bay Guardian shakedown hits a snag,” arguing that Kupperberg had somehow repudiated his own testimony.

The Guardian is suing the SF Weekly and Village Voice Media for predatory pricing in violation of California business law. The suit charges that the Weekly, with cash support from the 16-paper chain, sold ads below cost for many years in an effort to harm the locally owned competitor.

The trial got underway this week, with early motions on the evidence. Here’s what actually happened in Superior Court judge Marla Miller’s courtroom Jan. 16th and 17th:

Kupperberg, following well-established standards, had developed two scenarios to explain how much the Guardian had lost due to the Weekly’s practice of selling ads below cost. One of the scenarios used data from members of the Associate of Alternative Newsweeklies, information that the papers share with each other once a year to establish industry financial benchmarks.

The SF Weekly’s lawyers argued that part of the data – the material from AAN — wasn’t reliable, so Kupperberg agreed to use his other standards (including New Times own figures in 17 different markets) instead. He also added data from two other Bay Area alternative papers and from local retail sales statistics to buttress his conclusions. His data suggests damages of $5 million to $10 million.

And after the SF Weekly lawyers argued for hours that Kupperberg be disqualified, Judge Miller ruled clearly and unequivocally against them. Kupperberg will be able to testify, and his damages will be admissible.

That’s a big victory for the Guardian.

And while the Weekly lawyers demanded extra time and sought to delay once again a case that’s been in the works for more than three years, Miller moved forward and started the jury selection process Jan.17.

If this is how the SF Weekly and the VVM guys from Phoenix are going to cover the trial, we’re going to have to spend a lot of time correcting the record.

For more context and background on the case, and to see one of our key legal motions and read the story on the case from the Daily Journal click here.

Daily Journal: Trial to start in Bay Guardian’s suit over rival’s ad costs

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SAN FRANCISCO – For the 30th anniversary edition of The San Francisco Bay Guardian, founders Bruce B. Brugmann and Jean Dibble, his wife, posed for a cover shot in front of their home.

Dibble wore an apron and an overall-clad Brugmann held a pitchfork, recreating one of this country’s most famous paintings, Grant Wood’s 1930 “American Gothic.”

The photo was a nod to the couple’s Midwestern roots. Wood’s portrait depicted an Iowa dentist and his sister; Brugmann and Dibble came to San Francisco from Rock Rapids, Iowa, to start the Guardian in 1966.

But it wasn’t a pitchfork that got the unapologetically left-leaning newspaper going. It was a lawsuit.

In 1970, Brugmann sued the San Francisco Newspaper Agency, which operated the San Francisco Chronicle and the San Francisco Examiner under a joint operating agreement. Brugmann’s complaint asserted that the agreement constituted a monopoly.

The case settled for $500,000, and Brugmann used the money to increase the frequency of his publication.

Forty years later, Brugmann is back in court with another anti-competitive lawsuit.

This one, against SF Weekly and its parent chain, New Times Newspapers, asserts that the Weekly sold its advertisements below what it cost to produce them in an effort to push the Guardian out of business. Bay Guardian Co. v. New Times Media, 435585 (S.F. Super. Ct., filed Oct. 19, 2004).

Jury selection is set to begin Thursday in San Francisco County Superior Court, Judge Marla J. Miller’s courtroom.

Brugmann’s suit also claims below-cost ad sales or “predatory pricing” by the East Bay Express, which New Times bought in 2001 but sold last year. New Times merged with and became Village Voice Media in 2006. Its 17 publications make it the largest chain of alternative newsweeklies in the United States.

New Times executives and its attorneys deny that either the East Bay Express or SF Weekly sold ads below cost in an effort to rid the market of the Guardian.

Experts say predatory-pricing cases are interesting because of the inherently economic and somewhat theoretical aspect of the claims. What is cost, and how should it be determined? And, perhaps more important, does the plaintiff need to prove that the defendant would be successful post-predatory pricing?

In California, at least, the latter may be debatable.

SF Weekly launched in 1989. When New Times bought the Weekly in 1995, the Bay Area became one of three places New Times had a direct competitor in the market. In the second and third places, Cleveland and Los Angeles, New Times competed with rival Village Voice Media papers. In 2002, a “market-swap” deal between the chains eliminated head-to-head competition in those cities but caught the attention of the Justice Department. In January 2003, both companies signed a consent decree agreeing to aid competition by selling the rights to their former paper names. Neither admitted wrongdoing.

Brugmann points to that incident as evidence that New Times has a history of eliminating competition, but a pretrial motion from New Times barred any reference to the deal at trial.

The Weekly and the Guardian are both distributed free and depend largely on advertising revenues.

Although generally more politically moderate – and far less likely to take on such constant Brugmann targets as Pacific Gas and Electric Co. – the Weekly closely parallels the Guardian’s other qualities, including ubiquitous advertising for medical-marijuana clubs, “escort” services and bars and restaurants.

San Francisco Kerr & Wagstaffe attorneys H. Sinclair Kerr, James M. Wagstaffe and Ivo Labar represent New Times.

Labar said Brugmann is using the Weekly as a “scapegoat” for his own problems in dealing with new challenges in print media.

Michael Lacey, executive editor of the new Village Voice chain, agreed.

“[A lawsuit] is how Bruce got into the business, and now, in the twilight of his years, it’s how he’s hoping to maintain his business in a really tough media market,” Lacey said.

But Brugmann denies that’s the case.

“Of course that’s their story,” he said. “But from our point of view, the fact that the economy is not good and there are other problems in this business only makes this problem more acute.”

The problem Brugmann refers to began after New Times’ purchase of the Weekly.
According to Brugmann, his advertising staff started coming to him saying they were having problems making sales.

An exhibit in the Guardian’s court documents shows a list of dozens of advertisers, with Guardian employee notations alongside them: “Couldn’t match SFW,” “Great Deal with EBE [East Bay Express],” “Ludicrous deal from SFW,” “SFW giving away free ads,” “Will come back if match SFW,” “Match SFW or we’ll pull ads.”

Brugmann said he tried warning the Weekly about its practice. But when the ad rates didn’t go up, he sued.

“We had to sue them to get an even playing field,” he said.

Brugmann’s complaint asserts that the Weekly is using its parent company’s resources to lose money in San Francisco until the Guardian folds – like a broadsheet.
“This is a situation where a chain has decided that it could take over the market and either run a small family-owned company out of business or at least cripple them so they wouldn’t be an effective competitor,” said Ralph C. Alldredge, a San Francisco attorney who represents the Guardian.

E. Craig Moody and Richard P. Hill of San Francisco’s Moody & Hill also represent the Guardian.

In opposition to the Weekly’s motion for summary judgment (which was denied by San Francisco County Superior Court Judge Richard A. Kramer in October), the Guardian points out that Weekly executives knew their paper could make money in the Bay Area market if they raised their advertising rates.

The Guardian’s papers also cite evidence of wrongful intent. One piece of evidence is that, in a meeting with Weekly staff shortly after New Times bought the paper, Lacey told his employees he wanted the Weekly to be “the only game in town.”

Lacey points out that statement was made well before the period covered by Brugmann’s lawsuit and that he was speaking about editorial content, not advertising.

“I write for a living, and I edit for a living,” he said. “I have nothing to do with advertising. I never have.”

According to Lacey and attorney Labar, the Weekly would be no better off with the Guardian out of the picture.

“That doesn’t change our business profile here,” Lacey said. “I guarantee you, like mushrooms cropping up, there will be publications cropping up. Everybody takes a piece of the same sorts of actions.”

Labar agreed.

“This isn’t a city with two newspapers,” he said. “It’s a city with unlimited means to advertise.”

In papers, the Weekly point to several other newspapers or online advertising outlets that clutter the Bay Area market: a weekly supplement in the San Francisco Chronicle, the Chronicle itself, The Onion and craigslist, among others.

But the Guardian’s papers assert that New Times executives called the Bay Area advertising market a “zero sum game” with the Guardian and kept track of the number of advertising inches purchased by each Bay Guardian customer in a weekly “Guardian Report.”

Experts say predatory-pricing cases face very different odds depending on where they are filed. Attorneys say California superior courts generally are seen as more friendly to plaintiffs.

That’s largely because federal courts have been swayed by decades-old economic theory that is skeptical of the plausibility of predatory-pricing claims, some say.

“[The theory] was highly critical of the idea that predation could ever work,” said Daniel A. Crane, an antitrust professor at the Benjamin N. Cardozo School of Law. “For one, it’s extremely expensive. Then, you not only have to prevail, you have to recoup [recover your losses]. If another firm comes into the market, you don’t get to recoup. It’s almost a suicidal way of doing business.”

Crane, who has written about predatory-pricing cases, said economic theory also has developed in support of predatory-pricing claims. But in his view, the theories often don’t stand up in the real world.

Don T. Hibner, an antitrust attorney with Sheppard, Mullin, Richter & Hampton in Los Angeles, agreed.

“With enough ifs, we could put Paris in a bottle,” Hibner said, paraphrasing a French proverb. “We want to use economic theory to buttress facts and common sense. If we’re going out on a limb and all we have is economic theory, God help us.”

To protect competitors from purely theoretical claims, Hibner said federal courts have adopted tougher standards for plaintiffs in predatory-pricing cases. First, they’ve adopted a method of calcuutf8g cost that takes into account only variable costs.

California uses a method called “fully allocated costs,” which factors in all costs, both fixed and variable. That method generally yields a higher cost, making it easier for a plaintiff to show that any sale was below cost.

Second, federal courts require the plaintiff to prove that the defendant would in fact be able to recover or recoup its losses after the plaintiff was pushed out of the market. California courts have not directly addressed the issue of recoupment, making the recoupment prong debatable, attorneys say.

Cost and recoupment are the “two horns on which you can be hooked” in federal courts, according to Maxwell M. Blecher, of Blecher & Collins in Los Angeles. Blecher most often represents plaintiffs in predatory-pricing cases.

Hibner said the California statutes dealing with sales below cost “seem to mean what they say,” he said.

The primary statute at issue, Business and Professions Code 17043, reads, “It is unlawful for any person engaged in business within this state to sell any article or product at less than the cost thereof to such vendor, or to give away any article or product, for the purpose of injuring competitors or destroying competition.”

Hibner said literal readings of the statute sometimes can shift the protection of antitrust laws from consumers to “inefficient competitors.”

But according to Alldredge, the language makes the Guardian’s case simple.

“All you do is take all of their costs and divide that by the number of inches of advertising space they sold,” he said. “That tells you how much the cost is per inch. Whenever they sell below that cost, under California law, they’ve committed a violation.”
And, he added, under California’s Unfair Practices Act, with even one below-cost sale, a defendant’s negative intent is presumed.

That places the burden on the defense to show that they had another reason for selling below cost.

“Why were we selling below cost on certain advertisements?” Labar asked. “We couldn’t get a higher price.”

Labar said the triable issue of fact is intent.

“They’re trying to say a handful of documents and a couple of statements indicate we were trying to run them out of business,” he said. “We say, ‘No, they indicate we were trying to compete.'”

Copyright 2008 Daily Journal Corp. Reprinted with permission. This file cannot be downloaded from this page. the Daily journal’s definition of reprint and posting permission does not include the downloading, copying by third parties or other any other type of transmission of any posted articles.

Editor’s Notes

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› tredmond@sfbg.com

My brother called me from the East Coast over the weekend to ask if I was still alive and my house still standing. He’d been watching CNN, which apparently was showing nonstop reports of terrible storm carnage in Northern California, complete with breathless voice-overs talking about hurricane-force winds.

"Yeah," I told him. "It rained."

It was windy too. Some trees came down, my roof leaked a little, and some people who built houses on unstable hillsides learned what happens to unstable hillsides when it rains. None of this is terribly unusual or strange. It’s just that people in San Francisco aren’t used to living in a world where there’s actual weather. You’d think a place that could be shaken into dusty wreckage any minute by the inevitable earthquake would be a little less freaked about precipitation.

Still, I found a bit of a lesson here.

Just hours after the storm broke, while the bold and adventurous tech pioneers of Google were still huddled in their homes and afraid to go to work, the San Francisco Department of Public Works had crews on the streets clearing fallen trees. The response was stunningly efficient — the stuff that couldn’t be chopped up right away was hauled off to the side so cars could get through. By that evening the worst of the fallen timber was corralled and being cut up with chain saws. It’s fun to talk about the lazy, inefficient public sector, but frankly, the DPW did its job.

And 36 hours later, the efficient, private utility company, Pacific Gas and Electric Co., still couldn’t get the power back on along Third Street.

We got a press release Friday from the Democratic Leadership Council, which runs the Bill Clinton wing of the party and has long supported Democrats who hew to the center-right. The DLC folks call these hawkish neocons "new Democrats." And according to their Jan. 4 statement, the "New Democrat of the Week" was … San Francisco mayor Gavin Newsom.

Newsom got the award for "his continued commitment to reducing his city’s carbon footprint," which is fine and lovely. But it came the same week he announced, in a very DLC style, that he was bringing Kevin Ryan, the former United States attorney, on board as the head of his criminal justice council.

Ryan’s a right-wing prosecutor, a George W. Bush appointee who was in charge of the witch hunt and persecution that sent videographer Josh Wolf to jail for 226 days. Why, exactly, is a guy who has no respect for the First Amendment working for the mayor of San Francisco?

Newsom’s big plans to shake up his administration seem to amount to firing Public Utilities Commission general manager Susan Leal (who can’t be fired right now because she’s on job-related disability) and replacing her with controller Ed Harrington. Leal had to go because she might run for mayor in four years against whomever Newsom and chief consultant Eric Jaye handpick (Assessor Phil Ting seems to be the choice right now) and because, as Sup. Bevan Dufty put it, "PG&E was not happy about her."

Sounds like an award-winning strategy to me.

PS Our predatory-pricing case against the SF Weekly and its parent company goes to trial Jan. 14 in San Francisco Superior Court with Judge Marla Miller presiding.

A key legal filing in the Guardian’s lawsuit

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Since it appears that our lawsuit against SF Weekly and its parent company isheaded for trial the first week in January, and the Weekly has been running a lot of misleading stories about the case, I thought I’d post the key document in the case so far — our brief explaining why the case should not be dismissed and should go to trial.

Here’s the brief, as a pdf. Although it’s marked “confidential,” it was introduced and discussed in open court and is now public record.

The judge in the case, Richard Kramer, tossed out the SF Weekly’s summary judgment motion, and the court of appeals rejected an SF Weekly writ seeking to have that dismissal overturned. So the case is going forward, and if you read our brief, you can see what this is all about.

Lawsuit can move forward

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The Bay Guardian has presented enough evidence of predatory pricing by the SF Weekly that our lawsuit against the paper and its chain owners can go forward to trial, a judge ruled Oct. 25.

Judge Richard A. Kramer denied three separate motions by Village Voice Media, the Phoenix-based 16-paper chain, that sought to dismiss the case.

In a suit filed in 2004, the Guardian charged that the Weekly and the East Bay Express had engaged in a pattern of selling ads below cost in an attempt to put the locally owned alternative paper out of business.

VVM sold the East Bay Express this year to local owners.

The case was filed under the state’s unfair business practices law, which bars the sale of any good or service for less than the price of producing it if that cut-rate selling is aimed at hurting a competitor.

VVM’s motions for summary judgment argued that the Guardian couldn’t prove any intent by the Weekly or VVM to injure the local competitor. In briefs and oral arguments, VVM lawyers claimed that the chain’s CEO, Jim Larkin, had denied any predatory plans or intent. And VVM insisted that the evidence collected by the Guardian so far was inadequate to take the case to trial.

The chain lawyers also argued that the Guardian’s suit was a threat to the First Amendment rights of the Weekly, because if the paper was forced to quit selling discounted ads it might have to cut editorial space and staff.

Ralph Alldredge, a Guardian attorney, noted that the Weekly had admitted selling ads below cost. And he said the evidence collected so far in the case shows strong indications of predatory intent.

Alldredge acknowledged that selling below cost isn’t always illegal; start-up businesses, for example, often lose money at first trying to attract customers. But he said the Weekly has been losing money every year since New Times/VVM bought it in 1995, and those losses have only increased over time, to as much as $2 million a year. It’s hard to imagine any good reason why a business would set its prices so low that it operated at a loss every year for more than a decade, Alldredge argued, unless the goal was to use chain resources to starve out a locally owned competitor.

Alldredge cited a deal between Clear Channel, which owns the concert promoter Bill Graham Presents, and the Weekly under which the Weekly paid to have its name on the Warfield theater, a BGP venue – and in exchange, the Weekly would get almost all of the advertising money that once went to the Guardian. He cited a memo showing that the deal would give the Weekly 85 percent of the ads, and the Guardian would get “15 percent to zero.”

James Wagstaffe, arguing for the Weekly, said that forcing the chain paper to sell ads at a higher rate would be the equivalent of the government deciding how much of the finite space in the publication could be devoted to news. He said an economic expert hired by the Weekly, Harvard professor Joseph Kalt, had determined that the ad market in San Francisco was so soft that the only way to increase revenues enough to cover the Weekly’s operating costs was to cram more ads onto every page.

Alldredge countered that courts have always agreed that basic economic regulations can apply to newspapers without a First Amendment threat.

“One hundred years of cases say that the mere economic regulation of newspapers is not unconstitutional,” he said. “There is nothing in the First Amendment that says you can engage in predatory behavior.

He also noted that Jed Brunst, the top finance officer for VVM, had testified in a deposition that the chain had prepared projections in 2005 to present to investors. Those projections showed that the Weekly could become profitable – if it raised ad prices. The paper would lose some ad volume to the Guardian, but would be able to retain the same percentage of editorial space to ad space and would be a profitable operation, Brunst’s report to the investors said.

In other words, the top people at the chain knew they could make money by ending their below-cost sales – but they continued with the predatory practice. That, Alldredge said, created a pretty reasonable presumption that the chain was out to harm a competitor.

Kramer rejected all of the SF Weekly’s claims. He said that the First Amendment didn’t allow newspapers to engage in “impermissible anticompetitive” behavior. And the question of intent, he said, was a fact for a jury to determine – and “a denial of improper activity by itself is not enough” to dismiss this case.

New Times Executive Editor Mike Lacey and Executive Associate Editor Andy Van De Voorde came from Phoenix to attend the hearing, and Van De Voorde wrote a lengthy piece that appeared on the Weekly’s website calling the Guardian’s three-year-old lawsuit “looney.” The piece put the chain’s spin on the hearing and laid out the Phoenix operators’ opinions on the Guardian claim.

But in the end, only one opinion mattered, and that was the opinion of Judge Kramer — who didn’t buy one bit of the Weekly’s argument.

Trial is set to begin early in January, 2008.

The Guardian is represented by Ralph Alldredge, E. Craig Moody and Rich Hill. Three VVM lawyers — Ivo Labar and James Wagstaffe of the San Francisco firm Kerr and Wagstaffe and Don Bennett Moon of Phoenix — were in the courtroom representing VVM.

SF Weekly loses a big one

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SF Weekly loses a big one

It’s no news to most of you that the Guardian has sued the SF Weekly and its parent company for predatory pricing. We’re arguing that the Weekly, owned by Village Voice Media (which used to be New Times), has been selling ads below cost for the purpose of injuring the locally owned competitor.

Back in July, SF Weekly managing editor Will Harper wrote a long, rather nasty story that sought to portray the suit as groundless. He called the suit “light on witnesses and evidence,” quoted his boss, Mike Lacey, at length, and laid out, in detail, the Weekly’s motion for summary judgment — in essence, a motion to dismiss the suit because of a lack of evidence.

Well: this Wednesday and Thursday, Judge Richard Kramer heard arguments on that motion (actually, three different motions). One of the things that the Weekly’s lawyers argued was that the VVM managers couldn’t possibly have intended to harm the Guardian; after all, the lawyers argued, VVM CEO Jim Larkin denied any such plan.

That’s right: The lawyers said their client couldn’t have done anything wrong, because he (imagine this) said he didn’t do it.

Shortly before noon yeterday, Judge Kramer denied all three motions. In essence, the judge said, just saying you didn’t do it won’t fly; there’s plenty of evidence to take this case to trial, and a jury will have to decide who’s telling the truth and what’s really going on.

The folks at the SFW, of course, are spinning the ruling as just more evidence of our “looney lawsuit”. That’s their opinion, and they’re welcome to it. But in this particular matter, the opinion that counts is the opinion of the Hon. Richard Kramer — and he didn’t see it the SF Weekly’s way.

Trial is scheduled for early January.

American Journalism Review decries Chronicle as vile cesspool of incomplete chores

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Remember last year when Business Week, in a cover story about Digg.com, described our offices as “grungy,” and several major arteries located in the neck of our boss, Bruce Bruggman, nearly exploded? They also hilariously misidentified us as the SF Weekly.

The lack of imagination in American journalism makes for strange bedfellows, it turns out. In their August/September issue, the American Journalism Review described the Chronicle‘s offices downtown off of Fifth and Mission streets the same way, actually using the word “grungy.”

Christ, assholes, do we really come off as that unkempt? Phil Bronstein didn’t make his bed this morning, and I forgot to shave down south. Perhaps the glossies could teach us all out here on the Left Coast a thing or two about obsessive compulsion.

Or, they can loosen their ties and get a life. Either way, if they saw how neatly organized my cubicle was, they’d find a better adjective. My filing system would give even Jann Wenner an erection.

Why Vancouver sucks

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vancouver-skyline-w.jpg
Look at all the pretty condos

I’m sick of hearing San Francisco planners, the folks at SPUR and SF Weekly columnists talk about how wonderful Vancouver is, what with all of the slender downtown condo towers that provide walkable neighborhoods, bike paths and a “new urbanist” approach to housing.

Here’s a bit of reality: The New York Times reports that housing costs in Vancouver are soaring. Guess what? All those condos haven’t brought down housing costs, or even stabilized them. The more condos, the higher the prices.

And guess what? Many of those rich condo buyers aren’t from Vancouver:

Fueling the high-end market are foreign and second-home buyers, [Helmut Pastrick, the chief economist for the Credit Union Central of British Columbia] said, though not necessarily from the United States. The weak American dollar, which for the first time in decades is worth less than the Canadian dollar, has been making real estate in Canada more expensive for Americans.

Other foreign buyers make up a significant percentage of the market, according to Ian Gillespie, the president of Westbank Projects. The company is building several residential towers downtown, including the 60-story Living Shangri-La, which will be Vancouver’s tallest building after it is completed in 2009.

“This is a very multicultural city,” said Mr. Gillespie, who cited as an example a pharmaceutical executive from the Middle East, who recently bought a 1,700-square-foot $3.65 million condo at the Fairmont Pacific Rim.

And:

To make room for some projects, hundreds of single-room-occupancy hotel rooms for low-income residents have been lost, said David Eby, a lawyer with the Pivot Legal Society, a legal advocacy group. High prices are pushing out middle-income renters and buyers, he added.

Gee, might there be a different kind of lesson here for San Francisco?

Free speech in Phoenix

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I’ve had, to say the least, some fights with the company that publishes the SF Weekly. We’re suing the bastards for predatory pricing. I’ve made a few critical comments on the big chain in my time.

But I’m also the First Amendment chair of the Association of Alternative Newsweeklies, and we are strongly supporting the chain’s flagship paper, the Phoenix New Times, and its top executives, Mike Lacey and Jim Larkin, in their battle against a local sheriff and prosecutor in Arizona.

What’s up with the Weekly?

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What’s up with this week’s issue of the SF Weekly? A rambling, non-funny and oddly pointless spoof on steroids and Barry Bonds (who’s gone from SF now anyway) and an advertising supplement on restaurants that’s the most blatant, embarrassing sell-out advertorial I’ve seen in any publication anywhere. Ick.

Soma, Manhattan, and the SF Weekly

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I was a bit startled to see the supplement called “Spaces” fall out of my SF Weekly today; it’s a slick, 16-page fluffer for the real estate industry, complete with an ad for Vanguard Properties on the cover.

Even by the standards of shameless ad supplements, this is pretty low; selling the cover of anything to an advertiser is considered pretty shoddy form. I suspect (still waiting for confirmation from the Weekly folks) that the editorial department over there had nothing to do with this, but it does contain some stories (one marked “advertorial,” two others not marked at all) — and boy, are they a piece of work.

My favorite is called “Lifestyles of the Young and Wealthy: Is SoMa San Francisco’s neighborhood du jour?” The piece, by Chelsea Sime (who is not an SF Weekly staff writer) is all about a realtor named Michael Novia who lives in Sausalito but “knows first-hand how unique — and lucrative — the SoMa neighborhood has become.”

Novia’s proud that SoMa has come such a long way, and promises: “Five to 10 years from now, SoMa will be a little Manhattan.”

How lovely. What a great perspective for an alternative weekly to be promoting.

Oh, and by the way: If you go to the supplement’s website, as published, (sfweeklyspaces.com) not only is there nothing there, but it appears that SF Weekly doesn’t even own it.