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Wednesday, March 12, 2008

A Boy Named Sue

Posted By on Wed, Mar 12, 2008 at 4:40 PM

As expected, Guardian boss wallows in his trial-court victory.

By Andy Van De Voorde

The dust has barely settled at Superior Court following the jury verdict last week in the Bay Guardian’s predatory pricing lawsuit against the Weekly.

But already Guardian boss Bruce Brugmann is doing what The Snitch expected him to do: Loudly encouraging others to use his successful (for now) shakedown effort as a model for other businesses to employ against their competitors.

Brugmann must be angling for a bronze statue down at the courthouse — or in Red Square.

In a story published Tuesday in the Boston Phoenix, Brugmann tells Phoenix media writer Adam Reilly precisely how he wants to see his $15.6 million verdict against the Weekly and its parent company New Times (now Village Voice Media) interpreted.

“Everyone can use our suit as a model and template for any big chain that’s coming in and trying to predatory-price them,” said Brugmann.

Golly.

Creating a “model and a template” for a flood of anticompetitive litigation that will inevitably lead to fewer newspapers and higher prices for the mom ‘n’ pop business owners who buy most of the ads in alternative weeklies.

Such a legacy to leave for a self-professed defender of the little guy.

Interestingly, Brugmann then proceeded to provide a textbook display of the illogic that has long characterized the Guardian’s claim that the Weekly intentionally lost millions of dollars just to hurt its blustering competitor.

“What if Tony Ridder fought back, instead of just selling his chain?” he asked Reilly.

“What if people had fought back against [Bay Area media mogul] Dean Singleton, so he couldn’t buy all those newspapers and then whine about how they weren’t making any money?”

Brugmann wasn’t done.

“There needs to be more of this,” he told Reilly. “There needs to be more fighting back.”

Come on, everybody!

It’s time to grab a pitchfork and a calculator and start doing your part.

After all, what red-blooded American could possibly be against “fighting back”?

Certainly not this patriotic blogger.

However, The Snitch would like to pause here and ask a question:

Just what does the sale of the Knight-Ridder chain of daily newspapers or Denver-based Singleton’s purchase of dozens of other dailies have to do with a little old predatory-pricing claim in San Francisco?

The answer, of course, is nothing. (In the case of Knight-Ridder, for instance, there was no outside "predator" undercutting the competition and forcing poor Tony Ridder to sell his publicly traded chain of newspapers. Ridder was forced to sell by his own shareholders, particularly the company's biggest money man, Bruce Sherman.)

It’s just more of the pseudopopulist palaver Brugmann traffics in to disguise his own predatory motives — not to mention a sterling example of his jock-sniffing desire to be considered a contemporary of men like Ridder.

The 6-foot-5 Brugmann wants to be seen as a friend of the little people.

But if you think about it, what the Guardian owner was really saying in his comments to Reilly is that people shouldn’t have been allowed to make decisions about whether to sell something that belonged to them.

Back where The Snitch was raised, that used to be called a property right.

But under the Guardian’s twisted view of economics, someone — presumably the government — should have stepped in and prevented Knight-Ridder or the many former owners of Singleton’s papers from taking their money and getting out.

Like George Bailey in It’s a Wonderful Life, someone should have stood up to Old Man Potter!

Tony shouldn’t have sold, goddamn it!

It’s all part of the morally pure worldview down at the Guardian, where its own right to make profits is sacrosanct, but other, less intellectually superior people should be closely monitored to ensure they don’t do anything stupid with their money.

And of course, only the Guardian gets to play the Jimmy Stewart role.

While it may lack economic reason, though, Brugmann’s logical leap with the Phoenix perfectly captures the nature of the emotional antichain arguments that were made by his attorneys during the Weekly trial.

The legal tilt was characterized from the start by the Guardian’s mantra that an ornery out-of-town company had set out to destroy a feisty independent.

The judge who heard motions in the case for three years had ruled that the Guardian wouldn’t be allowed to tug on the jury’s heart strings with such rhetoric.

But after Judge Richard A. Kramer unexpectedly handed the case off to Marla J. Miller at the last minute, Miller proceeded to allow the sob-sister tactics.

As a result, for five weeks the Guardian claimed that, because of the Weekly’s nefariously affordable prices, it couldn’t raise its own prices high enough to afford to hire the reporters and editors it deserved.

Yes, it was the Weekly’s fault that the Guardian hired scads of unpaid interns—in what may well be a violation of state labor law — rather than shelling out for full-time reporters’ salaries.

It was the Weekly’s fault that the Guardian’s revenue was plummeting.

And it was the Weekly’s fault that the Guardian’s readership was dropping as well — this despite the fact that readership is determined entirely by the public’s willingness to pick up a paper, and has nothing to do with the price of ads.

Forget 9/11 or the dot-com bust.

It was all the Weekly — which, by the way, had “unlimited resources” thanks to its association with VVM.

The crocodile tears really started flowing during closing arguments, when Guardian attorney Ralph C. Alldredge told the jury his client would go out of business if it didn’t get a lucrative-enough verdict.

The Snitch was surprised that Alldredge didn’t whip out a hanky and dab his eyes at that point.

Your faithful courthouse correspondent also wondered how Alldredge could make such a claim with a straight face when the truth was that his client made a profit last year and has always been larger and more widely distributed than the Weekly.

Yet, oddly, at the same time it was crying into its beer, the Guardian wanted to boast about its financial prowess.

Take, for instance, Brugmann’s claim that his purchase of a $5.2 million office building in 2002 was “a great deal” for the paper despite the fact that it led to millions of dollars in equity flowing to he and his wife, Jean Dibble, while the Guardian was saddled with a monthly rent roughly twice that of the Weekly.

Might that rent payment have had something to with the Guardian’s alleged money troubles?

Based on The Snitch’s experiences with his own finances, it just might.

But boasting about its brilliance while holding out its hand is nothing new for Brugmann’s paper.

After all, as Guardian executive editor Tim Redmond boasted in his own story this week, the paper plans to ask Judge Miller to tell the Weekly how much it should charge for its ads.

The sole purpose of such Soviet-style surveillance would presumably be to ensure the Guardian’s right to jack up advertising rates in the middle of a recession.

“We will be asking Miller to issue an injunction barring any further below-cost sales [by the Weekly],” wrote Redmond.

As The Snitch has noted before, any business that happens to lose money in a given year is technically “selling below cost.”

So this is basically an effort to force the Weekly to attain court-approved profitability, either by inflating prices or by slashing costs.

The Guardian’s request for an injunction will come at a court hearing on March 25; Village Voice Media owners Michael Lacey and Jim Larkin have already said they will not only appeal the jury verdict but also will resist any efforts to impose what they called a “state-sanctioned collectivization of journalism.”

“We continue to believe that the marketplace sets rates,” Larkin noted in a release following the verdict.

Down at the Guardian, them’s fightin’ words.

And speaking of fights, Redmond’s latest story was also notable for the fact that he continues to angrily insist to other reporters that he did not — did not — wear a puffy jacket to court.

Check out this gem from Reilly’s piece in the Phoenix: “Redmond, incidentally, denies that he owns such a coat.”

Perhaps still aggrieved over what he perceived to be an insult rather than a simple piece of descriptive writing, Puffy went on to share his views on The Snitch’s posited ill humor.

“The blog posts he authored were about as personally vicious as anything I’ve seen in a long time,” wrote Redmond about your McAllister bureau chief.

(This last comment raised another question: Does Redmond actually work in the newspaper business?)

Amusing, too, was Redmond’s continued habit of refusing to tell his readers that the Guardian did everything it accuses the Weekly of doing.

“The Weekly publishers had to send a regular ‘Guardian Report’ back to Phoenix to show how the two papers stacked up,” he noted in a passage devoted to New Times’ alleged “obsession” with Redmond’s tabloid.

But here’s what he didn’t say: That Guardian co-publisher Dibble admitted on the stand that her paper produced its own “SF Weekly Report” — and did so specifically to track its competitor and see how the two papers stacked up.

When New Times does it, it constitutes evidence of a predatory plot.

When the Guardian does it, it’s an independent, locally owned merchant struggling to survive.

Again, the stench of hypocrisy rises and wafts to the East with the prevailing winds.

Your faithful courthouse correspondent also got a kick out of this line from Puffy:

“[The Snitch] never reported on the fact that the evidence clearly showed Bruce and Dibble had never taken big profits out of the paper and had instead reinvested money to improve the Guardian.’

Actually, Virginia, the evidence showed nothing of the kind.

Anybody who’s been paying attention knows that investing money to improve the Guardian was hardly the theme of this particular melodrama: The inability to do so because of the big, bad Weekly was the preferred narrative.

So how exactly does Redmond intend to have his cake and eat it, too?

Can the Guardian seriously argue in court that the Weekly damaged it so badly it was about to close up shop, and then boast in public about its long history of plowing profits back into improvements?

Can you go out of business while you’re making money?

Apparently, in Bruceworld, you can.

And Redmond’s right about one thing: The evidence certainly showed that the Guardian didn’t have a history of making big profits.

In fact, financial statements shown in open court showed the paper made just a 5 percent profit in what appeared to be its best year ever, and routinely posted annual results in the 1 to 3 percent range.

In the newspaper industry, profit margins of 25 percent are not uncommon.

In one memorable bit of economic ineptitude, the wizards at the city’s long-dominant weekly eked out a remarkable 0.4 percent return on their investment.

Yet they now want to collect a judgment that would pay them more than twice the money the Guardian has earned in its entire 40-year history.

It’s that sort of potential precedent that got Reilly’s notice. The Phoenix writer accurately notes in his piece that the Guardian’s lower-court triumph, should it be allowed to stand, could create legal ripples across the country.

Meanwhile, all this talk of Brugmann rooting around in a big pile of $100 bills leaves The Snitch to ask one final question:

Does the windfall jury verdict mean the Brute is finally going to give his wife a raise?

After all, testimony at trial showed that she earns an annual salary of just $15,000.

Compare that to Brugmann’s take: a whopping $180,000.

This for a woman who received what she described as the 1950s equivalent of a master’s in business administration from Harvard.

Okay, admittedly, Dibble admitted under oath that she hadn’t been on a sales call since the late 1960s.

But still.

She’s faithfully punched the clock down at the Guardian ever since Sly and the Family Stone were rocking the charts.

Now that he’s waxing in the afterglow of a San Francisco jury’s long-sought affirmation, might not The Brute see fit to throw a few more dollars toward the Little Missus?

The Snitch awaits an answer, but does not plan to hold his breath.

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Will Harper

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