Editors say politics colors antitrust probe

The investigation into whether the nation’s two largest alternative newspaper companies violated antitrust laws when they closed competing weeklies in Los Angeles and Cleveland took a contentious turn Thursday, after leading writers for both chains accused prosecutors of playing politics.

The charges, which appeared in a column by the LA Weekly’s executive editor, Harold Meyerson, and in a letter to the editor of the Wall Street Journal from New Times’ Executive Editor Michael G. Lacey, drew a pointed response from one of the prosecutors, Los Angeles County Dist. Atty. Steve Cooley.

Meyerson’s column and Lacey’s letter, said Cooley, represent “self-interested positions staked out by those who are directly affected by this investigation. Each is an attempt to portray their companies as victims rather than what they are: suspects.”

Since October, lawyers for the U.S. Department of Justice, the California and Ohio attorneys general and Cooley’s office have been gathering documents, interviewing witnesses and taking sworn depositions concerning the deal. Under its terms, Phoenix-based New Times Media agreed to shut down its 6-year-old Los Angeles newspaper in exchange for more than $8 million, surrendering its Southern California niche to the LA Weekly, which is owned by New York-based Village Voice Media. As part of the arrangement, Voice Media closed its Cleveland Free Times in return for a much smaller payment from New Times, which continues to publish the Cleveland Scene.

Meyerson, the formidable dean of Los Angeles’ political analysts, was careful to note in his column that he was “not commenting here on the economic arguments that I understand to be central to the government’s case. Nor am I endorsing the wisdom and propriety of the October deal.” Still, he wrote, “the case is moving beyond economic questions and into areas that can only be called political.”

Meyerson, who was traveling and could not be reached for comment, is alarmed that part of the prosecutors’ inquiry centers on whether alternative papers constitute a discrete part of the media market in which competitors are distinguished from one another not only by their advertising rates but also by their editorial point of view.

Experts in media and antitrust law generally agree that, in some cases, the federal Newspaper Preservation Act empowers officials to weigh the effect of newspaper closures on readers.

Moreover, in the 1997 case of Federal Trade Commission vs. Staples Inc. -- in which a U.S. district court blocked that firm from acquiring rival Office Depot -- and in the 1990 state case of California vs. American Stores Co., federal and state judges have held that companies may compete so closely within a broader market as to constitute a discrete antitrust situation of their own.

Unlike Meyerson, Lacey forthrightly defends the closure of New Times Los Angeles. “Merger law,” he wrote, “seeks to protect not the reader of our newspapers, but rather the advertiser ... The Justice Department is trying to create legal theory with this alternative newspaper probe ... This theory proposes that Justice become more active ‘in the marketplace of ideas.’ It is a stunning grab for unprecedented federal power.” Lacey did not return calls to his office.

Meyerson, too, wonders whether “the government really wants to argue that it has the right and duty to declare the ideological spectrum covered by a city’s alternative weekly newspapers insufficiently broad, and to mandate its expansion? If so welcome to the land of double standards and slippery slopes.” Further down that slope, Meyerson wrote, evenhanded regulators would have to come to grips with not only the right-wing “ideological tilt in the talk-radio market and its TV counterpart, the Fox News,” but also “the government’s [own] abolition of waiver strictures against a media conglomerate’s dominating a local market. The Tribune Co. can own The Times and a local TV station; Rupert Murdoch can own papers, a broadcast network and sundry individual stations ....”

“Suspicions are raised,” Meyerson argued, “when the government singles out alternative newspapers,” which are still in some sense largely a left-wing medium.”

In a written statement and subsequent interview, Cooley insisted that the LA Weekly-New Times deal raised both “free press and free market issues ... [which raise] the specter of a market division agreement among competitors which may be a violation of California and federal antitrust laws. While the papers were generally free to readers, advertisers will suffer from lost competition while readers are now deprived of another publishing voice .... TV may be omnipresent, but newspapers remain the lifeblood of journalism.”

Meyerson and Lacey, he alleged, “are putting on the very important mantle of the free press -- which I respect -- when what we’re really talking about is their companies’ possibly inappropriate business practices.”

The prosecutor said he is “puzzled as to why they’re questioning our motivations in this way at this time. We have a thing called due process that we use to get an accurate result. Let it work. I find their defensiveness to our just reviewing the matter to be telling.”

Cooley declined to give details on the investigation, which he said, “I am not micromanaging. It’s wrong, though, to attribute political motives to government agencies that are just doing their jobs. All I’m going to say is that we’re at the investigative stage. At the end of the exercise, there may be a determination that what’s been uncovered falls short of establishing a violation of the law.”

The D.A. said his office, like federal and state authorities, entered the case because when his staff read about the New Times-Village Voice deal in the press, “it struck them as a prima facie violation of the antitrust laws. I think it’s a logical conclusion that readers and advertisers in Los Angeles were hurt by a lessening of competition,” said Cooley. “But it remains to be seen whether that lessening violated the law.”

Cooley said he reads the LA Weekly “because it is a valuable news organ.” He was also a New Times reader. “I found it to be occasionally very funny, on occasion very insightful, on occasion very cruel. I thought some of their journalism was ad hominem, but on some stories they were far ahead of everybody else. They were way out front on the Catholic church story, for example. Ron Russell’s reporting on that set a remarkably high standard for everybody else to follow. Some of their other stuff was more hurtful than helpful. But that’s what the 1st Amendment and a free press are all about.”

What of Meyerson’s contention that Cooley’s assertion of a public interest in the marketplace of ideas does not extend to taking on media giants, such as Tribune Co. or Murdoch’s News Corp.?

“How does he know we’re not?” Cooley said. “Maybe we’ll get there eventually. Let’s see how we do with this one.”