Daily Journal: Trial to start in Bay Guardian's suit over rival's ad costs - Page 2

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Wagstaffe and Ivo Labar represent New Times.

Labar said Brugmann is using the Weekly as a "scapegoat" for his own problems in dealing with new challenges in print media.

Michael Lacey, executive editor of the new Village Voice chain, agreed.

"[A lawsuit] is how Bruce got into the business, and now, in the twilight of his years, it's how he's hoping to maintain his business in a really tough media market," Lacey said.

But Brugmann denies that's the case.

"Of course that's their story," he said. "But from our point of view, the fact that the economy is not good and there are other problems in this business only makes this problem more acute."

The problem Brugmann refers to began after New Times' purchase of the Weekly.
According to Brugmann, his advertising staff started coming to him saying they were having problems making sales.

An exhibit in the Guardian's court documents shows a list of dozens of advertisers, with Guardian employee notations alongside them: "Couldn't match SFW," "Great Deal with EBE [East Bay Express]," "Ludicrous deal from SFW," "SFW giving away free ads," "Will come back if match SFW," "Match SFW or we'll pull ads."

Brugmann said he tried warning the Weekly about its practice. But when the ad rates didn't go up, he sued.

"We had to sue them to get an even playing field," he said.

Brugmann's complaint asserts that the Weekly is using its parent company's resources to lose money in San Francisco until the Guardian folds - like a broadsheet.
"This is a situation where a chain has decided that it could take over the market and either run a small family-owned company out of business or at least cripple them so they wouldn't be an effective competitor," said Ralph C. Alldredge, a San Francisco attorney who represents the Guardian.

E. Craig Moody and Richard P. Hill of San Francisco's Moody & Hill also represent the Guardian.

In opposition to the Weekly's motion for summary judgment (which was denied by San Francisco County Superior Court Judge Richard A. Kramer in October), the Guardian points out that Weekly executives knew their paper could make money in the Bay Area market if they raised their advertising rates.

The Guardian's papers also cite evidence of wrongful intent. One piece of evidence is that, in a meeting with Weekly staff shortly after New Times bought the paper, Lacey told his employees he wanted the Weekly to be "the only game in town."

Lacey points out that statement was made well before the period covered by Brugmann's lawsuit and that he was speaking about editorial content, not advertising.

"I write for a living, and I edit for a living," he said. "I have nothing to do with advertising. I never have."

According to Lacey and attorney Labar, the Weekly would be no better off with the Guardian out of the picture.

"That doesn't change our business profile here," Lacey said. "I guarantee you, like mushrooms cropping up, there will be publications cropping up. Everybody takes a piece of the same sorts of actions."

Labar agreed.

"This isn't a city with two newspapers," he said. "It's a city with unlimited means to advertise."

In papers, the Weekly point to several other newspapers or online advertising outlets that clutter the Bay Area market: a weekly supplement in the San Francisco Chronicle, the Chronicle itself, The Onion and craigslist, among others.

But the Guardian's papers assert that New Times executives called the Bay Area advertising market a "zero sum game" with the Guardian and kept track of the number of advertising inches purchased by each Bay Guardian customer in a weekly "Guardian Report."

Experts say predatory-pricing cases face very different odds depending on where they are filed.