The Guardian has to prove that the Weekly sold ads below cost, for the purpose of damaging a competitor, that the Guardian has suffered financial damages, and that those damages were caused substantially by the Weekly's predatory behavior.

The first part, Alldredge noted, was the easiest fact in the case. The Weekly and New Times never really disputed that they were selling below cost. The chain's lawyers never challenged the figures that the Guardian's accounting expert put forward to show the Weekly's operating costs and its ad pricing.

Furthermore, Alldredge said, "they know what their costs were, and they know they were selling below cost."

As for the chain's intent, Alldredge said, "you can see it in words and in deeds." He reminded the jurors that three witnesses had testified that one of the chain's principal owners, Mike Lacey, vowed back in 1995 to put the Guardian out of business. That intent was reflected throughout the documents from the Weekly and New Times that the Guardian presented during the case.

And while the Weekly’s lawyers insist that the two alternative papers had loads of local competition, a Weekly internal memo showed that the company considered the local ad market a “zero-sum game” – if the Weekly gained ads, the Guardian would lose them.

Alldredge said that the Weekly’s predatory pricing didn’t have to be the only reason the Guardian saw its business fall off. “You don’t have to eliminate other factors” like the recession and the rise of Internet advertising, he explained. “They can’t cite the other factors as an excuse,” he noted. “They are responsible for the harm.”

He closed by asking the jury a few questions:

How can a business that is supposed to be run to make a profit take over two profitable newspapers then lose money for 12 years in one case and six years in the other without ever raising prices or cutting costs if they didn’t have a predatory motive?

If the Weekly claimed it had a better product than the Guaridan and had a substantial circulation advantage, why have their prices always been lower than the Guardian’s?

Doesn’t the fact that the New Times papers make good profits where there is no direct competition, and weak or zero profits where there is a strong competition, give them a motive to try to weaken a competitor?

Why was Jim Larkin, the head of the business side at New Times, too busy to come here and face cross-examination before the jury when Mike Lacey has been in the courtroom every day?

If the internet, the economy and competition had such a significant impact on the Guardian, why didn’t the defense experts try to calculate that impact?

If SF Weekly executives were so certain that they were forced to lower prices to meet competition from the likes of the Onion and other non-alternative-weekly competitors, why were they unable to provide a single instance of a price that they had to meet from a single competitor other than the Guardian?

H. Sinclair Kerr, the Weekly’s lawyer, took over at that point, and did the exact closing argument that I expected to hear. He never contested the issue of whether the Weekly sold below cost; the evidence on that was clear. All he tried to do was argue that selling below cost was perfectly legal if it was being done to meet competition. And he insisted that the Weekly and the folks at New Times never had any intention of trying to harm the Guardian.

He spent a lot of time talking about the economic changes that hit the Bay Area around 2001, since that, too, is a key part of the defense case. “None of the problem were caused by the East Bay Express or the SF Weekly,” he said. “they were caused by market conditions.”

Print media, he said, are struggling all over the country, and San Francisco is no exception. And, citing his expert witness from Harvard, Professor Kalt, he insisted that there was no economic rationale for the Weekly to be selling below cost to harm the Guardian.

Alldredge got the last word. He was allowed a short rebuttal, and he used it to talk about the expert witnesses in the case. Four of the five experts, he said, had no direct knowledge of the newspaper business. Only one – Bill Johnson, the publisher of the Palo Alto Weekly, actually ran a paper in the Bay Area and actually knew what the market was like.

And Johnson’s testimony was very clear: The Internet hasn’t taken a lot of display ads from weekly newspapers. The recession hurt for a year or so, but then revenues at most weeklies bounced back. Display ad revenue didn’t just disappear from the two papers – it was taken by the Weekly from the Guardian.

He closed by imploring the jury to seek justice. “You have the power to right a wrong,” he said. “You should do it.”

Jury deliberation went on all day today, and the jurors recessed without reaching a verdict. They will continue on Monday.