SF Bay Guardian Wins Big, Heads Back to Court

By Judith Scherr
Friday March 07, 2008

The San Francisco Bay Guardian won a $15.6 million judgment Wednesday against the San Francisco Weekly and its parent company, the 16-paper Village Voice Media, for predatory business practices—but the Guardian’s not counting the big bills yet, says Executive Editor Tim Redmond.  

The question could be tied up in appeals for four years or more, Redmond told the Planet in a phone interview Thursday. 

However, Redmond said he believes that in a couple of weeks, the Bay Guardian will be able to go back to court to ask Superior Court Judge Marla Miller for an injunction against the Weekly’s practice of selling advertising below cost, a practice already established by the courts. 

“We don’t mind competition,” Redmond said. “But they’ve got to play fair.” 

All the 12 jurors agreed that the Weekly deliberately undercut Bay Guardian advertising rates, Redmond said. Bay Guardian attorneys showed that the paper lost money every year since the chain bought it in 1995, losses mounting to $25 million, according to Redmond. 

Eleven of the 12 jurors agreed that the practice was a deliberate attempt to injure the Bay Guardian to the extent that it would be put out of business, Redmond said. 

Stephen Buel, editor and co-owner of The East Bay Express—bought from New Times (now Village Voice Media)—said he was “very surprised that they won, and that they won this big.” He said he had followed a similar case in Arkansas where the plaintiff had lost.  

Buel said that when he and his partners had bought the Express from New Times, the advertising rates had been extremely low. “We had to adjust to get on sound economic footing,” Buel said. 

He wondered how the BG had been able to show solidly that the Weekly’s intent was to hurt the BG, since the low advertising rates hurt all the competitors, including the Express.  

Buel clarified that that the corporation that currently owns his newspaper was not a party in the lawsuit. One of the named defendants on the losing side was “East Bay Express Publishing LP,” a holding company which had been controlled by Village Voice Media. 

The decision should be seen as a victory not only for the BG, but for all small businesses facing large chains that come into town with huge resources used to undercut them, Redmond told the Planet. 

Lowering costs to lower prices is legal, but “you cannot use all your resources you have against a less-funded competitor, with the intent to harm the competitor,” Redmond said. 

The Weekly wasn’t shy about responding to the decision. In its on-line column, the Snitch columnist wrote: 

“Like Ralph Nader, (Bay Guardian publisher) Bruce Brugmann is out of touch with reality. Feigning obliviousness to the Internet, the dot-com bust, 9/11, the Bush economy—and the $330 million lost by the San Francisco Chronicle to these very factors—Brugmann insisted in court that only SF Weekly threatened his wallet.”