For instance, the Guardian's 2004 press release announcing the lawsuit trumpeted the fact that the newspaper "has had competition every day of our existence, from dailies, weeklies, community papers, and other publications in one of the most media-rich markets in the country."
But at numerous points during the trial, Guardian witnesses such as Palo Alto Sun publisher Bill Johnson scoffed at the idea that community papers or even Internet sites could ever have a meaningful impact on an alternative weekly.
Fred Harper
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The Weekly's attorneys argued that its struggles to achieve profitability were a direct result of a multicompetitor environment, and made a point of noting that one reason the Weekly's costs are high is that it has invested heavily in its Web site in an effort to keep up with industry trends. The Guardian, by contrast, acknowledged that it had laid off its Web team in an effort to save money, and suggested that it is only now regaining momentum on the Internet.
Brugmann also acknowledged on the stand that he had made the decision to buy a $5.2 million office building in 2002, just as the print economy started to plummet. The Guardian boss insisted that the purchase was a great deal for his paper, despite the fact that it sent millions of dollars in equity into his own pocket because he and Dibble had set up their own limited liability company to make the purchase. The deal also had the effect of saddling the Guardian with a monthly rent payment roughly twice that paid by the Weekly.
Throughout the trial, the Guardian never let such inconvenient truths get in the way of its chief argument that New Times had intentionally lost more than $20 million in an effort to bleed the Guardian. It then asked the jury to interpret the mere fact of those losses as circumstantial evidence of a below-cost plot.
The only other evidence the Guardian presented regarding New Times' purpose was the fact that the Weekly maintained a "Guardian Report" that tracked ads in its competitor by category, and statements purportedly made by executive editor Lacey at a staff meeting in 1995. Three Guardian witnesses claimed Lacey had said he wanted the Weekly to be "the only game in town," and two said he uttered "words to the effect" that he wanted to drive the Guardian out of business.
However, Lacey disputed ever having vowed to put the Guardian out of business, and was backed up on that point by Patricia Calhoun, editor of Westword, Village Voice Media's paper in Denver. And even the Guardian witnesses, two of whom had been fired by New Times after its purchase of the Weekly, acknowledged that Lacey never said a word about advertising or any pricing plans.
As for the "Guardian Reports," the Guardian's own witnesses admitted maintaining "SF Weekly Reports."
New Times documents presented at trial did include several e-mails that referred to the Weekly's aggressive competition with the Guardian, including messages that Guardian attorneys called "militaristic" owing to the use of terms such as "guerrilla tactics." Other Weekly documents talked about "kicking the Guardian's ass" on ad count.
However, Weekly attorneys noted that for every Weekly e-mail about the Guardian there were an equal number of Guardian documents about the Weekly, including discussions about forcing New Times to shut down the Weekly and retreat to Phoenix. A "database" presented at trial by the Guardian in an attempt to show it had been harmed by the Weekly referred to Weekly employees as "assholes."
In their statement, Lacey and Larkin affirmed their strong belief that Village Voice Media will prevail on appeal. They noted that the U.S. Supreme Court in 1993 ruled that sales-below-cost statutes simply don't apply to highly competitive marketplaces.
"The highest courts of all five states that have ruled on sales-below-cost claims since the Supreme Court ruling have agreed," they added. "We look forward to giving California its first opportunity to become the sixth state."
Lacey and Larkin also had this to say about Brugmann's newspaper: "We have not sought to injure the Bay Guardian. We just don't want to read it."
The judgment has not yet been entered. Attorneys for both sides will meet again at a March 25 hearing, at which the Guardian is expected to ask Judge Miller to issue an injunction that monitors the behavior of the Weekly with regard to ad pricing.
