all Members shall be required and hereby agree to cooperate with and participate in such sale," they state.
The documents also address the prospect that the SF Weekly, the East Bay Express, and the Cleveland Scene could be sold off or closed if they continue to hemorrhage cash. "[I]f at any time up to and including the Third Anniversary date, the cumulative losses for any of the [East Bay, Cleveland or San Francisco units] (brackets in original document) exceed the cumulative projected losses for such unit ... the Company, with the consent of five managers, shall be permitted to dispose of such non-performing unit by merger, consolidation, sale of assets or otherwise," they state.
The new company would be required to honor the union contracts at the Village Voice - the only paper in either chain that's fully unionized (the L.A. Weekly has some union workers). But other employees may not fare so well. The new company "may, in its reasonable discretion, transition all employees ... to new compensation, benefit plans, programs or arrangements."
One source in New York said that "as I understand it, Larkin will be the CEO and Schneiderman will run the Internet operations. I believe the rest of the VVM corporate staff (essentially finance people) will be let go."
A separate document, dated June 1, 2005, is titled "NT/VV Proposed Business Consolidation Agreement Issues List Reutf8g to NT Draft of Contribution and LLC Agreement." It lists some concerns - apparently from VVM executives - about the deal.
It cites a "drop date of Nov. 30, 2005," but notes that "[t]his is too short, obtaining HSR approval may take a long time." That's a reference to the Hart-Scott-Rodino Act, which requires federal approval of any merger that may have an impact on business competition.
That might not be routine: New Times and VVM have run afoul of federal antitrust laws in the past. The two chains were charged a year and a half ago with conspiring to end alt-weekly competition in Los Angeles and Cleveland (see "New Times Nailed," 1/29/03). Under a consent decree, the companies are required for five years to give the Justice Department notice before pursuing any merger.
We've spoken to several sources close to the negotiations who say it's likely that process is already under way. But the Justice Department has consistently maintained that any such notice would be confidential.
The two parties are also keeping a tight hold on the information. Staffers at VVM and New Times papers seem unaware of the details of the talks, and top management has refused to answer their questions about the situation. The agreement includes a clause stating, "No press releases or public disclosure, either written or oral, of the transactions contemplated by this agreement, shall be made by a party to the agreement without written consent of VV Media LLC and NT holdings."
The merger would signal the biggest step so far in the consolidation of ownership in the alternative press. The merged company (which thus far is identified only by the dummy name "Newco") would represent 14.2 percent of the membership of the Association of Alternative Newsweeklies and would give one chain operation control of some of the biggest media markets in the country, including New York, Los Angeles, Miami, Denver, Seattle, Phoenix, and Houston (see "SOS: No secret New Times-Village Voice Media deal, sfbg.com).
Schneiderman, Lacey, and Larkin all declined to return messages seeking comment.
The Bay Guardian is suing New Times, charging predatory pricing by the SF Weekly.
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