New Times parent firm must pay $15.6M in lawsuit

Phoenix New Times’ parent company and one of its papers, SF Weekly, have been ordered to pay $15.6 million plus interest to the San Francisco Bay Guardian in that publication’s lawsuit alleging predatory pricing.

California Superior Court Judge Marla Miller more than doubled the damages a jury awarded the Guardian in its lawsuit against rival alternative newspaper SF Weekly and Phoenix-based Village Voice Media. She also issued an injunction barring the paper and parent from selling display advertising below cost for 10 years.

Michael Lacey, Village Voice Media’s executive editor, and H. Sinclair Kerr, an attorney representing the defendants, could not be reached for comment.

Tim Redmond, the Guardian’s executive editor, said his publication sued SF Weekly and Village Voice Media under the California Unfair Practices Act, which prohibits the sale of a product below the production cost with the intent of harming a competitor.

“Our contention was that the SF Weekly owned by Village Voice Media out of Phoenix was selling ads below the cost of producing them for the purposes of harming the Guardian,” he said. “The key thing I think was that we showed that they have lost money every single year since Village Voice Media, which was then called New Times, bought the SF Weekly. They have consistently sold ads below their fully allocated cost of producing them. They barely even disputed that.”

A five-week trial in March concluded with a jury awarding the Guardian $6.3 million in damages. That was the actual amount the Guardian lost, Redmond said. The California Unfair Practices Act gives judges the discretion to triple some of the damages and that resulted in Miller’s decision to increase the damages to $15.6 million plus $300,000 in interest, he said.

“The more important thing is she issued an injunction barring SF Weekly and Village Voice Media and all of its agents, operators and managers, etc., from selling ads below cost in the San Francisco market with the intent of harming the Guardian,” Redmond said. “This is a very big deal because we never went into this lawsuit with the goal of getting rich. We went in with the goal of demanding a level playing field. That’s what we always wanted from the start.”

The injunction is in effect, but the damages remain in question pending any appeals, Redmond said.

“I have no doubt they have said they will appeal,” he said.

“We don’t have our $15.9 million and I’m not counting on getting it in the immediate future, but we do have an injunction in effect barring them from any more illegal activity.”