- The Washington Times - Tuesday, January 28, 2003

The nation's two leading publishers of alternative newsweeklies, New Times and the Village Voice, yesterday agreed to terminate an illegal market-allocation agreement and sell the assets of the alternative newsweeklies in Cleveland and Los Angeles, the Justice Department said.
Department officials said requiring the companies to sell the assets, and other actions, are needed to stop the two organizations from colluding to close one chain's paper in Cleveland and the other's in Los Angeles, leaving each chain with a monopoly on advertising in one city.
A lawsuit filed by the department's antitrust division in U.S. District Court in Ohio challenged the agreement between New Times and Village Voice Media as a violation of the Sherman Antitrust Act.
At the same time, the department filed a proposed consent decree that, if the court approves, would resolve the lawsuit and the department's competitive concerns.
"Rather than letting the marketplace decide the winner, these companies chose to corrupt the competitive process by swapping markets, thereby guaranteeing each other a monopoly and denying consumers in Los Angeles and Cleveland the continued benefits of competition," said R. Hewitt Pate, the acting assistant attorney general who leads the department's antitrust division.
"The Sherman Act clearly prohibits these types of allocation schemes between competitors," he said.
Department officials said that in the fall of 1955, Village Voice Media's predecessors launched the first "alternative" newsweekly, the Village Voice, in New York. Since then, the popularity of alternative newsweeklies has increased dramatically, with more than 125 published today throughout the United States.
Their popularity with readers, the officials said, continues to be driven largely by a unique editorial mix of politics, investigative reporting and entertainment issues, all with a local focus.
According to the complaint, before their unlawful agreement New Times and Village Voice Media had competing publications in Cleveland and Los Angeles.
In October 2002, the companies "swapped" markets with New Times agreeing to shut down New Times Los Angeles and Village Voice closing the Cleveland Free Times, leaving each publisher with a monopoly in one city.
The complaint said this unlawful agreement eliminated the competition that had given advertisers in both cities lower rates, more promotional opportunities and better service, and benefited readers with a higher-quality product.
The proposed consent decree requires New Times and the Village Voice Media, among other things, to terminate their unlawful agreement, allow affected advertisers in Los Angeles and Cleveland to terminate their contracts, and divest the assets of New Times Los Angeles and the Cleveland Free Times to new entrants in those markets.
It also prohibits the companies from entering into any market- or customer-allocation agreements in the future.
Village Voice Media, the nation's second-largest chain, has a weekly circulation of more than 800,000 for its papers in New York, Minneapolis-St. Paul, Seattle, Los Angeles, Orange County, Calif., and Nashville, Tenn.
New Times, the leading chain, distributes each week more than 1.1 million copies of its alternative newsweeklies in Phoenix, Cleveland, San Francisco, Dallas, Houston, Miami, Denver, St. Louis, Kansas City, Mo., Oakland-Berkeley, Calif., and Palm Beach-Broward County, Fla.

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