By Erin Sherbert
By Erin Sherbert
By Leif Haven
By Erin Sherbert
By Chris Roberts
By Kate Conger
By Brian Rinker
By Rachel Swan
In a July 6, 2004, e-mail, Guardian owner Bruce Brugmann summed up his scorched-earth strategy regarding the Weekly. "Make sure we go after each and every Weekly/East Bay Express ad and campaign," he wrote to his publisher Jody Colley, editor Tim Redmond, and paid consultant Kat Thornton. "Further, that we prepare for counterattack on all of our ads and particularly the new ones. We are really driving them nuts and making real gains."
Despite making those statements, just three months later, in October 2004, Brugmann filed suit against the Weekly and its former sister paper, the Express, claiming that they were engaging in illegal anticompetitive behavior and trying to destroy him.
That lawsuit coincided with the Guardian's failing financial fortunes; in fact, at times Alldredge made a point of emphasizing the Guardian's dramatic losses -- including a $347,000 shortfall in 2005.
In a further irony, the Guardian's suit argues that the fact the Weekly has also lost money in recent years was circumstantial evidence of a plot to bleed the Guardian by selling ads below cost. That argument, as Labar noted, blindly ignores the precipitous decline in print advertising that followed the 9/11 attacks, and downturn of print advertising in general. The San Francisco Chronicle has admitted to losing more than $330 million in the past six years, Labar said, adding wryly, "If that's not evidence of below-cost sales according to [the Guardian's convoluted] argument, I don't know what is."
The Guardian did not present an explanation as to why its own admitted losses in recent years should not be viewed a similar smoking gun other than to suggest those losses were the fault of the Weekly.
A portion of the hearing was devoted to the Guardian's claim that in 1995, VVM executive editor Michael Lacey held a meeting of Weekly editorial employees and told them that, under his management, he wanted to drive the Guardian out of business so the Weekly would be "the only game in town." That purported comment, Alldredge argued, was evidence of longstanding malice and could be construed to refer to a predatory pricing scheme.
The alleged twelve-year-old statement was first brought to the Guardian's attention by a witness who added that she may have dreamed it. Since then, two other people who attended the meeting have come forward to claim they heard similar language. But Labar argued that such "puffery" is common in the world of business, and noted that Lacey is an editorial executive who has nothing to do with ad prices.
Another Guardian claim that was discussed at the hearing was its contention that an advertising deal between the Weekly and Bill Graham Presents, which is owned by Clear Channel Communications, was evidence of wrongdoing because it called for BGP to commit a certain portion of its local advertising in alternative weeklies to the Weekly. That arrangement, Labar noted, is no different than Hertz agreeing to buy its cars exclusively from Ford, and BGP entered into it willingly.
The Guardian has also argued that the Weekly's agreement to buy naming rights for the SF Weekly Warfield Theater was actually a secret kickback to BGP. But it has provided no evidence to support that allegation. And Labar also noted the bizarre nature of the Guardian's claim that the Weekly "took over" the business of BGP, and that in some strange way the Guardian lost business that rightfully belonged to it. Perhaps, Labar suggested, the more than $250,000 in revenue the Guardian lost from Clear Channel might have something to do with the strange treatment the Guardian has given Clear Channel in print.
Shortly after the Weekly closed the BGP deal in 2005, for example, Brugmann ran a series of full-page ads attacking the Weekly for running Clear Channel advertising. "Why are the Weekly folks fooling around with a greedy Texas corporation that's hell bent on muzzling dissenting voices and homogenizing the media?" he wrote.
He neglected to explain that, a few weeks earlier, he had been running around with Clear Channel himself, and cashing the Texas conglomerate's checks to the tune of hundreds of thousands of dollars -- the same money he now seeks to recoup via the lawsuit.
The Guardian's professed desire for Clear Channel advertising also seems odd given what Tim Redmond wrote in a blog post yesterday. Clear Channel, Redmond opined, is not only "one of the most evil corporations in the United States," but it also is "sleazy."
Judge Kramer has set the case for trial on January 2, 2008.