On Saturday, New York-based Village Voice Media, owner of Seattle Weekly, entered into a consent decree with the U.S. Department of Justice, bringing to a close a three-month investigation into possible antitrust violations by VVM and the New Times chain of newspapers, which also signed the decree. Phoenix-based New Times and VVM are the largest alternative-newsweekly companies in the country. Last October, they agreed to close competing papers. New Times closed its Los Angeles paper in exchange for more than $8 million from VVM, while VVM closed its Cleveland paper in exchange for a lesser amount from New Times—leaving VVM's L.A. Weekly and New Times' Cleveland Scene with no comparable rivals. After complaints by advertisers, the Department of Justice and local authorities investigated.
Under the decree, which must be approved by a federal court, VVM and New Times admit no guilt. But in a statement Monday, the Justice Department called the October deal "unlawful" and "illegal." To satisfy the feds, the companies must sell assets of the shuttered papers to third parties.
"We don't believe we did anything wrong," says David Schneiderman, CEO of VVM.
In first reporting the settlement Monday, The New York Times said that VVM and, specifically, Seattle Weekly have experienced "significant financial difficulties." Schneiderman says the story was "bizarre and inaccurate." VVM had greater profits in 2002 than in 2001, a rarity in the media business last year, Schneiderman says, and Seattle Weekly continues to see improvement in advertising sales after a strong fourth quarter. P.D.