A merger roadblock

THE MERGER BETWEEN New Times Media and the owner of the Village Voice ran into another potential roadblock Dec. 6 when the Ohio Attorney General's Office stated publicly that the merger "raises new concerns" about the elimination of newspaper competition. In a letter to Terry Smith, the editor of the Athens News in Athens, Ohio, Alan C. Witten, a senior attorney in the antitrust division, noted that the merger could possibly violate a consent decree that New Times and Village Voice Media signed after they were nailed for violating state and federal antitrust laws in 2003.

"That Judgment entered by the Cuyahoga Court of Common Pleas expressly prohibited the defendants, for a period of five years, from entering other agreements to restrain competition in Cleveland or other Ohio markets," Witten wrote. "Be assured that this office has taken, and will take, action against any transaction between these two publishers that violates our existing Judgment against them or Ohio's antitrust laws in other markets within our jurisdiction."

And while Tom Dresslar, spokesperson for California attorney general Bill Lockyer, won't confirm it, our sources indicate that Lockyer's office has been in touch with the office of Ohio attorney general Jim Petro.

That means there's the potential here for two state attorneys general to take on an important case that the federal government is ducking. Lockyer and Petro ought to openly and formally announce they will work together to fully review this merger, demand that New Times provide detailed information about its plans, hold public hearings in both states, and seek a legal injunction against the merger going forward until all the questions are answered.

There's plenty of justification for the state legal officers to take the lead here. While the US Justice Department signed off on the merger Nov. 23, federal officials only reviewed the competitive issues that might have arisen under the Hart-Scott-Rodino Act and ignored the much larger issues: the problems of media consolidation and the fact that the merger might violate the 2003 consent decree and the ban on further conspiratorial activity between the chains.

As we reported Oct. 26 (see "Losing a Voice"), the combined New Times-VVM company would reach between 22 and 25 percent of the total circulation of the 126 members of the Association of Alternative Newsweeklies, according to AAN figures. Gannett, the largest of the daily operations, claims a circulation of 7.6 million, which is just 13.8 percent of the 55 million paid daily circulation in the nation.

And New Times is currently engaged in what appear to be anticompetitive practices in the Bay Area and Cleveland. Documents we've obtained show that New Times is losing $4 million a year in those markets. In San Francisco, the Bay Guardian is suing New Times, alleging that the chain's local outlets, SF Weekly and East Bay Express, are selling ads well below cost in an effort to put a locally owned competitor out of business.

Over the past few years, with the Bush administration showing no interest in opposing anticompetitive conduct, the states have taken the lead on antitrust cases. Lockyer and Petro should join forces to block what could be a crippling blow to the alternative press, free speech, and the future of independent media voices.