Village Voice’s New Owners

The above illustration, “Doom and Dimmer” is from “Fill ‘er Up with Fear” , (current link without image) Ward Harkavy’s article on Bush’s State of the Union address that (doh), we are “addicted to oil. Just found out that effective February 7, his Bush Beat has been cancelled by the new management at the Villiage Voice.

The venerable independent celebrated its fiftieth anniversary by announcing October 24 that it was merging with the Phoenix-based New Times Media in early 2006, pending federal regulatory approval. That approval came November 28.

While adopting the name of the Villiage Voice media, the organization kept the management of New Times CEO Jim Larkin and executive editor Michael Lacey, as well as New Times-owned national advertising sales agency Ruxton Media Group.

New Times claimed in the news release to have been born of the same

desire to create a venue for high-spirited, innovative public debate…[and to] challenge mainstream sensibilities… irreverent humor, spirited criticism, [and] magazine-style feature writing

It is telling that Lacey founded his chain with others in 1970 from Arizona State University and has catered to local coverage and the youth market. The Village Voice, on the other hand started to introduce

free-form, high-spirited and passionate journalism into the public discourse.

In announcing the end of his column, Harkavy says he will now be,

writing stories for the paper itself. I’ll be focusing on New York City angles.

On its website, New Times Media says of the merger:

It’ll take a while before we work out all the kinks, and we’re pretty sure we’ll screw up at least a few things along the way.

Harkavy was the first national journalist to break the story of Wilbur Ross and his connection to the Sago Mining disaster. He graciously granted permission to run his illustration from that article on this blog, just asking for a link and named credit.

Well, Ward, I’ll miss your column, and as far as I’m concerned this is a major “screw up.”

*

The Voice last changed hands in 2000, after then publisher Leonard N. Stern announced in September 28, 1999 that by the end of the year hoped to sell the paper and the six others he owned: LA Weekly, OC Weekly, City Pages, Seattle Weekly, Long Island Voice, and the Cleveland Free Times. He had purchased the Voice from Rupert Murdoch in 1985.

In addition to publishing, Stern’s business ventures include real estate and Hartz Mountain pet products. of which he was the heir of the founder.

The buyers included New York-based financial firm Weiss, Peck & Greer and a private equity fund associated with the Canadian Imperial Bank of Commerce. The new CEO, Voice veteran David Schneiderman, who reportedly bought the papers for $150 to $160 million, immediately announced that he planned to buy additional alternative papers to create an even bigger chain.

Art Howe, a Pulitzer Prize-winning reporter and former publisher of the alternative Philadelphia City Paper, was named president. Among the executive vice presidents were Michael Sigman, publisher of the LA Weekly, and Albert Del Favero Jr., publisher of the Nashville Scene, which was purchased by the same investors previously.

At the time, Schneiderman told the San Francisco Bay Guardian that he planned to keep the staffs intact. Gabriel Roth reported in a January 12, 2000 story that Schneiderman had said,

My policy is, you keep a good editor in place and let them run things as they wish….I don’t believe in giving editors orders, and I don’t believe they should take orders from me.

Sigman added,

In order to make good profits you have to have great papers, and that means spending on editorial, on production, on sales, on marketing.

New Times had reportedly put in a bid at that time.

*

Flash forward six years. In Ohio, The Athens News, the town’s only locally owned paper joined other independent alternative newspapers in expressing opposition to the merger, as reported on January 5, 2006 by that paper’s senior writer Jim Phillips in a story, “State attorney general not much interested in fighting alt-newspaper merger.”

Said its Publisher Bruce Mitchell,

It’s further erosion of the diversification of media….The more chains that are formed, the less independent editorial voices there are. We’re against the consolidation of media in general, and this merger specifically.

Ironically, that office had sued Villiage Voice Media and New Times Media in 2003 for eaching giving up a paper to allow the other to have a monopoly on the alternative press in Cleveland and Los Angeles.

Phillips writes that according to the Alan C. Witten of the AG’s office,

In the settlement, the two chains agreed to pay a “substantial” sum of money (Witten’s word) to cover the impact their deal had on the Cleveland market, and to refrain for five years from any business agreements that would impact the media market in Ohio.

“Be assured that this office has taken, and will take, actions against any transaction between these two publishers that violates either our existing judgment against them or Ohio’s antitrust laws in other markets within our jurisdiction,” Witten’s letter to The Athens NEWS concludes.

The Bay Guardian cited this in a December 14 editorial, characterizing it as “another potential roadblock” to the merger. It cited unnamed sources who told the paper that California Attorney General Bill Lockyer had contacted Ohio AG Petro about the issue. The editorial urged Lockyer and Petro to join forces and “take on an important case that the federal government is ducking.”

The Cleveland Plain Dealer ran a story Dec. 17, reporting that Petro’s office was “studying a planned merger of alternative-weekly newspaper chains for potential antitrust violations.”

By that time, however, the merger was no longer “planned,” but an accomplished fact, given the federasl approval. According to according to Village Voice Media spokesperson Winnie Lerner. “It’s a done deal,”

Ohio AG spokesperson Kim Norris, said that Petro’s office sees no basis for any such action against the merger.

Opponents of the merger cite its impact on ad sales. Ruxton Media Group will take newspapers in five markets — New York, Los Angeles, Seattle, Minneapolis, and Nashville — away from the Alternative Weekly Network, which serves many independent papers in the Association of Alternative Newsweeklies. (New Times and Village Voice Media papers also belong to the trade group.)

An Ohio University emeritus journalism professor who has studied media law told said,

I don’t think [the Federal regulators are]… looking at (media consolidation) issues very much at all right now,” said professor Guido Stempel… And the states have never been that active.

Athens News “Be assured that this office has taken, and will take, actions against any transaction between these two publishers that violates either our existing judgment against them or Ohio’s antitrust laws in other markets within our jurisdiction,” Witten’s letter to The Athens NEWS concludes.Bay Guardian seized on the letter as evidence that the merger had run afoul of Ohio regulators. A Dec. 14 editorial in the San Francisco paper cited the letter to Athen News Editor Smith, which the editorial characterized as “another potential roadblock” to the merger. It claimed Witten had indicated in the letter that the merger “could possibly violate” the consent decree that settled the 2003 lawsuit, and cited unnamed sources who told the paper that California Attorney General Bill Lockyer had contacted Ohio AG Petro about the issue.

The Bay Guardian seized on the letter as evidence that the merger had run afoul of Ohio regulators. A Dec. 14 editorial in the San Francisco paper cited the letter to Athen News Editor Smith, which the editorial characterized as “another potential roadblock” to the merger. It claimed Witten had indicated in the letter that the merger “could possibly violate” the consent decree that settled the 2003 lawsuit, and cited unnamed sources who told the paper that California Attorney General Bill Lockyer had contacted Ohio AG Petro about the issue.

The editorial urged Lockyer and Petro to join forces and “take on an important case that the federal government is ducking.”

The issue even got some coverage in our state’s mainstream press, when the Cleveland Plain Dealer ran a story Dec. 17, reporting that Petro’s office was “studying a planned merger of alternative-weekly newspaper chains for potential antitrust violations.”

By that time, however, the merger was no longer “planned,” but an accomplished fact. The U.S. Department of Justice approved it on Nov. 28, essentially finalizing the arrangement, according to Village Voice Media spokesperson Winnie Lerner. “It’s a done deal,” Lerner said on Wednesday.

Presumably, the state attorney generals in Ohio, California or both could still take their own actions under state law. Ohio AG spokesperson Kim Norris, however, said Wednesday that Petro’s office sees no basis for any such action against the merger.

Norris noted that in Witten’s letter, the attorney did not say that any business agreement between New Times and Village Voice would trigger a legal response from the state.

The state will act against the chains only if their business deal “violates either our existing judgment against them or Ohio’s antitrust laws in other markets within our jurisdiction,” the letter stated. And, according to Norris, the AG at this point doesn’t see any Ohio media market that would be affected by the merger.

Norris said in 2003, the market swap by New Times and Village Voice clearly violated Ohio’s anti-trust laws. In 2006, by contrast, she said, “we do not believe that there’s any market in Ohio where these two publishers operate competing newspapers, for which there would be any impact (from the merger).” And as long as that’s the case, she said, the Ohio AG has no jurisdiction to act against the merger.

so, evidently collaboration is illegal, merger is okay. Opponents cite the merger’s impact on ad sales, noting due to the merger, Ruxton will take newspapers in five markets — New York, Los Angeles, Seattle, Minneapolis, and Nashville — away from the Alternative Weekly Network, which serves many independent papers in the Association of Alternative Newsweeklies. (New Times and Village Voice Media papers also belong to the trade group.)

Though this might conceivably hurt alternatives in Ohio in the long run, it’s apparently not enough immediate reason for the state’s attorney general to get involved in the case.

An Ohio University emeritus journalism professor who has studied media law said Tuesday that federal regulators are less likely than in the past to call foul on media mergers, and state agencies tend to be less aggressive than the feds.

“I don’t think they’re looking at (media consolidation) issues very much at all right now,” said professor Guido Stempel. “And the states have never been that active.”

Athens News Editor Smith said his main concern involves what will happen if down the line

They’ve got some excellent alt-weeklies now…but who’s to say that couldn’t change under a corporate takeover? If that happened, it could cripple our trade group and the industry as a whole, adversely impacting all the papers in it.

*

So, who is this spokesperson Winnie Lerner? A managing director at the Abernathy MacGregor Group (AbMac). According to her bio on its site, she

provides investor relations, financial public relations and transactions counsel to clients , [especially] in the telecommunications and technology industries…[and] has been involved in every telecommunications transaction the firm has managed over the past six years, including Bell Atlantic’s merger with NYNEX (now Verizon), Bell Atlantic’s bid for AirTouch, WorldCom’s merger with MCI, and, more recently, Vodafone and Verizon’s joint wireless partnership and Vodafone’s acquisition of Mannesmann and Illuminet’s acquisition of NTC.

Lerner holds a B.A. in international relations from Connecticut College. In an example of the revolving door, she joined AbMac in 1996

from the House of Representatives Subcommittee on Telecommunications and Finance where she served as a Legislative Assistant on telecommunications and broadcast issues.

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