« Good news/bad news | Main | Specialist for Calif Republican Party violated immigration visa »

Very bad news for the Eureka Reporter: SF jury awards up to $15 million to newspaper that sued competitor for unfair biz practices

One weekly newspaper in San Francisco has successfully sued another for unfair business practices and a jury today awarded the paper that filed the suit up to $15 million. The decision was just announced, below is the full text of what the SF Chronicle just posted to its website.

The Bay Guardian won the verdict by proving that the SF Weekly undercut it with below market ad rates while staying afloat with cash infusions from its corporate parent.

Wow. This is exactly what the Eureka Reporter has done to the Times-Standard for the past several years.

I have always maintained that the T-S could recover damages from Rob Arkley in an unfair business practices lawsuit. I know a Bay Area attorney, Ralph Alldredge, who could probably win millions for the Times-Standard; he won a ground-breaking case for a Manteca newspaper back in the '80s and I wouldn't be surprised if he was involved in this lawsuit.

In my opinion, the CEO of the Times-Standard's parent company, Dean Singleton, knows he has grounds for action and is probably waiting for a certain amount of time to pass before suing Arkley. In addition to floating the ER while it undercut the Times-Standard, Arkley has sent numerous emails to Times-Standard execs hinting or outright boasting he was going force the Times-Standard out of business.

Those emails could end up costing Arkley millions. Actually what I think will happen is that Arkley will pull the plug on the Reporter some time this year, before he gets sued, or as the result of Singleton threatening to sue, in the wake of this verdict.

(03-05) 14:57 PST SAN FRANCISCO - A San Francisco jury awarded up to $15 million in damages today to the Bay Guardian alternative weekly newspaper, to be paid by its competitor, SF Weekly, for unfair business practices.

The superior court jury agreed with Guardian Publisher Bruce Brugmann's claims that SF Weekly purposely undercut the Guardian with below-cost display ad rates, then used infusions from its Phoenix-based parent company, Village Voice Media, to stay afloat.

Brugmann said the competition was so unfair it could run his Guardian out of business, which he has owned and operated with his wife since 1966.

SF Weekly lawyers said they would appeal.

Comments

i can attest to the fact that the ER has lower ad rates than the TS. ive advertised in both rags, and you get what you pay for. the ER lost my business the day that arkley pushed larry glass. the ER plays dirty and its content these days is horrid. how many editorials promoting war in the name of god do they need to run?

There is a reason why the TS has a nick name of Sub Standard. There are some tings it doesn't do well. The TS gets scooped on the railroad news. The TS was a day later on the last port meeting.

The ER doesn't have all those pop-behind ads either.

To me, the T-S suing the ER over unfair business practices would just end up having the T-S looking like sissies. Kinda like Larry Glass ended up trying to charge Arkley over the pushing incident.

Besides, wouldn't the T-S have to prove some sort of damage if they claim unfair business practices? The ER is cutting back. T-S is still doing business as usual. It would seem the supposed unfair business practices, if they did anything, worked against the E/R, not the other way around.

The issue to look at is the fact that a new business came in and started undercutting an established business. The established business must generate a profit to stay afloat. The newcomer is propped by a wealthy parent company. This is grounds for action, and the verdict yesterday in San Francisco proves that juries are willing to award damages. This isn't the first time one newspaper in California has successfully sued a competitor for this very practice.

so in Fred's lil' dork world glass stands up to the rich bully and he's a sissy, and so if the TS and elected officals back down they're macho?

The suduko puzzle in ER is much better than TS's.

tinytim wrote, "so in Fred's lil' dork world glass stands up to the rich bully and he's a sissy...".

I don't consider trying to file charges against someone "standing up to them". If Glass would of pushed Arkley back, that would have been standing up to him.

Fred is a retard. His way of standing up to a bully is to be a punk. In Fred's fascist world, the biggest bully is most respected. Thats not American, its Stalinist Russia.

Glass kept faith with the community by honoring the rule of law, not Fred's jungle law.

As much as I'm sympathetic to the Guardian, I doubt if this jury award will stand up on appeal. S.F. judges and juries are not the norm.

State and Federal laws of unfair competiton have been weakened over the years. Contention over the issue is now intenational and limited to the WTO, where only the "big boys" participate.

The basis of the DA's Palco suit was unfair competition. It had much stronger evidence and was rejected on appeal. Of course, the local judges rejected it first, in contrast to the Guardian case.

The attorney who represented the Bay Guardian was indeed Ralph Alldredge. I put strong faith in his ability to make this verdict stand up to an appeal. I will blog more about this later. Ralph is an extraordinarily skilled attorney. He owns a weekly newspaper in Calaveras County; I worked for him there in the late '90s and early '00s as a reporter and editor. He currently serves as an officer on the board of directors of the California Newspaper Publishers Association. Eureka Reporter publisher Judi Pollace is a CNPA board member.

Do you realize that the only reason the T-S is any good these days is cause The Eureka Reporter forced competition out of it. The T-S was crap before the ER came along.

Another point. The only reason the T-S is only facing a wage and hiring freeze is cause Singleton (owner of Media News group) hates the ER with a bloody passion.

So basically, if the ER goes, the T-S will be gutted by corporate and return to the sloppy and boring read it was.

Be thankful there's competition.

The T-S is cutting too, whoever said it's business as usual over there is lying. Their paper is smaller, they have less staff, they cover less local news, and as the Chron also reported, Media News Group is doing major damage control across all its newspapers (due to the fact that the morons in charge can't figure out that their stupidity is what's destroying their business, not "costly" employees).

A Person:

I basically agree with you on all points, though I don't think the T-S will regress as badly as you predict if the ER were to cease its existence as competition.

I do agree with you that we should be thankful for the competition. Those who have been working in the Times-Standard's newsroom for awhile admit the ER forced the T-S to become a better paper. It also made their jobs more fun, having the ER to compete against.

Honestly, I don't want the ER to disappear. That is not the intent of this blog post. I will blog more about this later.

hey, andy, i'd love to see the text of those e-mails arkley sent to the t-s. do you know if they've been published anywhere?

With the TS and the ER printing the same letters to the editor and same AP stories, there's little difference between the two. ER has those ghastly David Limbaugh editorials, but TS has its dull Michael Reagan tomes also.

TS has a sense of humor, though, so I'll continue our subscritpion. The price is right on the ER, but I wouldn't walk much farther than my driveway to pick it up.

Many people have abused their freedom of speech slandering Robin and his family. I like what he did. vigilante justice. It's like having our own town celebrity fighting the poparazi.

if it was really slander, junior could have sued.

but for something to be slander, it's not enough that it offends arkley's hyperinflated ego, it also has to be false.

if he's really a "celebrity" or public figure, the standard for what is considered "slander" actually increases to require proof that the speaker acted "with malice."

criticism? yes, and rightly so.

slander? not even close.

CJ, I think anon 11:13 is right in his interpretation. But I would like to know your reasons why you think Arkley has been unlawfully defamed. He certainly has brought it on himself, and is hardly innocent of smear campaigns himself. You should read some of his emails to people he doesn't like.

BTW...libel is when you falsely and maliciously defame someone with the written word. Slander is when you do that with the spoken word.

speaking of those arkley threat e-mails, i ask again, do you know if those have been published anywhere?

i'd love to see what the pompous gasbag has to say when he's all juiced up and spewing his anger like the spoiled child he still is.

Thorn: Arkley sent venomous, spiteful emails to Charles Winkler and Gerry Adolph when they were editor and publisher of the Times-Standard. I don't feel I should disclose exactly what he said. But he turned on Winkler after the T-S endorsed Peter La Vallee in the 2002 mayoral race over his wife, a race that Peter won, narrowly. Within a year following the election, he launched the Reporter. You may have read in the blogosphere the allegations that when Arkley hired Judy Pollace to become the Reporter's publisher that Pollace, who worked under Adolph, stole the Times-Standard's strategic plan and gave it to Arkley. I don't know if that is true, but I know almost immediately after Pollace informed Adolph she was jumping ship for the Reporter, Arkley sent at least one email to Adolph boasting that the he was going to take over the Times-Standard's market share. I believe he also boasted that he had a copy of the strategic plan. I don't know if he actually got a copy from Pollace, though.

every focus like a laser beam here.....

this thread is about UNDERCUTTING adverstising rates...its not about who has the better puzzles or who got the scoop on your favorite story......

Do you think there will be changes at the ER because of this case? If they can't undercut the price of ads with infusions of cash from the owner, will they raise their rates and the quality of their paper to keep up ad revenues or close up shop?

Can infusions of cash from the owner be disguised as many full page ads for owner's other special interest groups like CPR and HELP and financial interests like Starbucks?

ad rates are the issue here. ad rates are based on circulation. if the ER is claiming to have the highest circulation in Humboldt County, how can it have lowest rates? i would imagine that a judge could force a paper to raise its rates.

another issue could be the fact that the TS prints its paper at the ER. a judge could decide that the ER is charging too much for printing...

Do you really want the government dictating advertising rates? Oh, I forgot we were in Humboldt.

Here's some irony for you Andrew:
"This is a case about whether independent, locally owned media can survive in an era of newspaper consolidation when Dean Singleton owns every paper from Vallejo south to Santa Cruz," Guardian Executive Editor Tim Redmond said this week in an interview outside the courtroom. "It's about whether independent newspapers can compete against a big chain."

I doubt a jury would look at Arkley vs. Singleton and say that it is unfair business practices when singleton is the one who owns all the papers and could easily inject the same cash Arkley does. It is not as if the TS is a mom and pop op.

i doubt a jury would even look at a case involving the TS and ER. the ER's undercutting of rates has not been enough to shake the TS from Humboldt County's most read newspaper. if the ER had come to dominate the market, then a case could be made......

The ER cutting the local market rate for ads is subsidized by cash flow from the owner. That is an unfair business practice regardless how many newspapers there are or who owns them.

What about the Tri City Weekly?
Ad rates: less. Price: free.
No difference.

There's a story about the monopolizing of the California olive market by Prudential. They realized the national market value and put all the multi-generational family farmers out of business. It took about 5 years. By planting thousands of acres and operating at a loss until they could flood the market,they drove the price of olives down and put every one else out. Then the prices rose significantly.

The TriCity isn't a newspaper, it is an advertiser. It isn't operating at a loss with regular cash infusions from its owner.

re: 7:55 - the TS is not printed by the ER, they have their own press

The flaming emails from Arkley were saved when Adolph left the TS