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.