By Tim Redmond
The newspaper chain that owns SF Weekly is suing the independent owners of the East Bay Express for $500,000 in a case that, ironically, shows how the big media outfit is trying to duck its own debts.
The lawsuit comes out of the 2007 deal under which Steve Buel, Hal Brody and a few other investors bought the Express from Village Voice Media, the national alternative press chain that owns the Weekly and 14 other papers.
As part of the deal, the local owners put up an undisclosed amount in cash and agreed to pay VVM $500,000 two years later. Buel, the longtime editor of the Express, and Brody, who formerly owned a weekly in Kansas City, had to guarantee the half-million-dollar note with their personal assets.
The sales agreement was a bit complicated. VVM owned both the SF Weekly and the Express, and the two papers had been selling joint ad buys to clients. So divorcing that partnership, and allowing the newly independed Express to compete effectively in the market, required some unusual terms. Among other things, VVM agreed not to use its position as the former owner of the Express, with full access to account records and sales contacts to poach Express clients.
However, Brody told us, the big chain started to violate that agreement almost immediately. “We have massive claims against them for violating those terms,” he said.
“The SF Weekly is not supposed to solicit our advertisers in Alameda and Contra Costa, and they’ve been doing it, over and over.”