The $6 million mouth? City Pages owners lose alt-weekly predatory pricing lawsuit

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It’s hard to imagine that anyone outside the San Francisco Bay Guardian’s legal team expected this: Yesterday, following a five-week jury trial, the SFBG prevailed in its predatory pricing lawsuit against Village Voice Media, the Phoenix-based alt-weekly chain that owns City Pages. As a consequence of the verdict, the Voice chain (formerly known as New Times before its managers took over the original VVM in 2006) is presently on the hook for $6.3 million in damages. But as the San Francisco Chronicle reported this morning, “Damages could swell to as much as $15.6 million, because San Francisco Superior Court Judge Marla Miller has the discretion to triple portions of the jury award.”

The lawsuit stemmed from SFBG publisher Bruce Brugmann’s long-standing allegation that New Times/VVM systematically sold ads at rates below the cost of producing them for the purpose of driving SFBG out of business. A local media attorney who wishes to be anonymous tells me that this sort of litigation “has been, in cyclical fashion, a major issue in the newspaper industry for years. What’s intriguing about this development is that by all signs, we’re at the nadir of enforcement of these kind of anti-trust provisions in the industry. We really haven’t seen many of these actions since the 1980s, and we certainly haven’t been seeing people win them.”

Village Voice Media seemed auspiciously confident from the start, taking pains to cover the trial both extensively and dismissively, even importing corporate editorial field boss Andy Van de Voorde from Denver to SF to cover the blow-by-blow in smirky, condescending, half-clever daily dispatches.

After the verdict was announced, however, Van de Voorde surrendered his daily blogspace to VVM co-founder and top editorial dog Michael Lacey.

It appears likely that it was Lacey’s mouth that made up jurors’ minds in the first place. Three former New Times/SF Weekly employees testified that he came to town after NT bought the Weekly in 1995 and announced in a staff meeting that he meant to put the Bay Guardian out of business. Sez local media attorney: “A predatory pricing claim is a very difficult claim to win, not just in the newspaper business but in any business. It involves assessing a very complex set of issues. So juries notoriously tend to look for simpler reference points for their decisions–such as comments like that one, I would guess.”

VVM lead attorney H. Sinclair Kerr Jr. has vowed to appeal the decision, telling the Chronicle, “I do not think the evidence supports the verdict, and I’m confident we’ll prevail in the California Court of Appeals.”

Disclosure note: I worked for Village Voice Media I for four years, and VVM II for one year. I don’t know Michael Lacey. I do know Andy Van de Voorde.

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