Weekly tries a "gotcha" -- and failsIt was a wild day in court in the Guardian’s lawsuit against the SF Weekly. Bruce Brugmann took the stand. He generally made the SF Weekly’s lawyer look silly – but the Weekly’s out-of-town hit man, Andy Van De Voorde, was almost giddy with his attempts to say that Bruce Brugmann did poorly as a witness.
I’m biased, of course (so is the hit man), but I have to disagree: Bruce laid out the Guardian’s history, explained how the Weekly had attacked us, and stood up remarkably well under a cross-examination that may have given Van De Voorde something to write about, but didn’t really present many relevant facts to the jury.
Several times during cross examination, Weekly attorney H. Sinclair Kerr tried to pull the legal equivalent of a “gotcha.” He kept pushing the notion that the media marketplace in San Francisco is so crowded with so many competitors that the Weekly and the Guardian really aren’t fighting over a discrete slice of that market. Bruce had none of it. Kerr kept trying to get Bruce to talk about competition in general and kept trying to get him to admit that the Weekly isn’t our biggest or most important competitor; Bruce would have none of it.
“I’m talking about competition in general,” Kerr said at one point.
“Well, I’m talking about competition with New Times,” Bruce replied.
Kerr tried to say Bruce wasn’t much of a publisher because he didn’t go on sales calls, but Bruce made quick work of that, too, saying that he was the Guardian’s editor as well, that editors generally don’t do sales calls, that we have a sales staff to do that, and besides “I’m a busy guy – I’m blogging.”
The jury members laughed.
Then Kerr tried to suggest that Bruce and Jean Dibble were somehow personally taking cash out of the Guardian at a time when the paper was laying off staff. The theory: Bruce and Jean, through an LLC, bought a building, where the paper now has its offices, then charged their own publication high rent and pocketed the bounty.
Kerr’s question – “So at the same time you’re reducing staff, you were increasing the rent the Guardian was paying to Brugmann, LLC, right?” – was wildly misleading.
Van De Voorde bought into the entire line.
But the hit man apparently wasn’t paying attention to what Bruce was saying – and he hasn’t been reading his own chain’s local paper – because the facts on this one are pretty clear.
For starters, anyone who knows anything about Bruce Brugmann and the Guardian – and the Weekly has spent years investigating and writing about us – would realize that the premise of Kerr’s question was absurd. You can accuse Bruce of a lot of things, but milking the Guardian for money isn’t one of them. In fact, as the financial documents, testimony and other evidence in this case make abundantly clear, any modest profits the Guardian has ever made have gone right back into the paper.
Here’s the back story on the building (and much of this information has already been published – along with what turned out to be pretty stupid conjecture – by the Weekly’s former editor, John Mecklin). Van De Voorde could have found it on his own website.
Around 1989, the Guardian was outgrowing its cramped office on 19th St, and we started looking for new digs. We wound up signing a lease on a place on Hampshire Street; it was owned by the David Allen Trust, and the people who managed it were looking to keep tenants for the long term by holding rents low. At the time, that part of the Mission had very few offices, and not much economic activity; we wound up paying about 70 cents a foot, dirt-cheap rent, and it went up only slightly every year. As we grew, we actually leased some more space from a different landlord next door.
But at the end of the ten-year term, the dot-com boom was in full swing, and office space – even class D, subprime office space like we had – was fetching princely sums of money. Our rent suddenly more than doubled; we got out of one of our leases (at some expense) and squeezed into the remaining space – paying $28,000 a month -- while we started looking for more options.
What we found was this: To either pay the rent our current landlord wanted for the space we needed, or to lease new space anywhere in town, we were going to be paying around $45,000 a month.
We also found, through a stroke of luck, that there was a building we could buy, and own, and the mortgage would be about the same as the rent we were going to pay anywhere in town.
For a variety of legal and tax reasons, Bruce and Jean bought the building through a company called Brugmann LLC, and charged the Guardian the rent. The rent was about $46,000 a month (the same amount we would have paid in our old place – no “rent hike” here). But we also had other tenants in the new building, who were paying $13,000 a month, so the net rent to the Guardian was $33,000 – far LESS than we would have paid in our old building or anyplace else we could lease.
So buying the building was a great deal for the Guardian.
Bruce and Jean didn’t pocket the rent money paid to Brugmann LLC; they used it to pay the mortgage. And anything left over was plowed back into the paper to pay the staffers who were left after the Weekly’s predatory pricing forced us to lay some people off.
Bruce explained that on the stand. Van De Voorde apparently wasn’t listening.
By the way, the Weekly has been trying to years to portray the Guardian’s purchase of a building as bad business. But our property has increased dramatically in value and saved us a fortune in rent. Around the same time, New Times bought the East Bay Express for around $6 million; the chain sold it recently for less than half of that.
I’d say we had the better business deal.
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Comments (1)
Does Bruce's dick taste good?
Posted by justaskin | February 7, 2008 08:50 AM