The Next Newspaper Death 

The long war between the San Francisco Bay Guardian and the SF Weekly will likely kill at least one of them.

Page 3 of 3

But even if the appellate court adopts the Weekly's recoupment argument, the Guardian believes it will win a retrial. Executive Editor Redmond explained that alternative newsweeklies have a near monopoly on certain types of ads, including ones for nightclubs and other local entertainment. And he argued that the SF Weekly would be able to substantially boost prices on those customers if the Guardian were out of the way.

Nonetheless, the different interpretations of federal and state law provide some evidence that the appellate case will be a closer call than what happened at trial. Oral arguments are expected to take place in about four months. The Weekly intends to appeal to the state Supreme Court if it loses, while the Guardian has not yet made up its mind.

To a certain extent, the long fight between the two papers also represents a reflection of the deep animosity between their owners. The dislike that Village Voice Media co-owner and Executive Editor Mike Lacey harbors for Guardian co-owner and publisher Bruce Brugmann and his brand of liberal-advocacy journalism is legendary in the alt-weekly world. And there's no doubt that Brugmann has gone to great pains over the years to highlight the predatory practices of Lacey and his partners and portray them as corporate raiders.

The two weeklies will also continue to battle it out in superior court. A judge has already allowed the Guardian to seize two of the Weekly's delivery trucks and to confiscate rent payments from the Weekly's subtenants at its South of Market offices. As of last week, the Guardian had collected more than $17,000, and it's awaiting a judge's decision on whether it's entitled to 50 percent of the Weekly's ad revenues going forward.

The Guardian's collection efforts are highly unusual. Typically, plaintiffs must wait until the appeals process is over. But the Weekly and its parent company opened the door when they failed to post an appeal bond of about $25 million.

Van De Voorde told the Express that his company simply couldn't afford it. The newspaper chain, which is heavily leveraged, also can't get a loan to post the bond because it doesn't have enough cash as collateral. In fact, Village Voice Media would probably have to sell some of its newspapers just to post the appeals bond.

Village Voice Media also has argued in superior court that the Guardian isn't entitled to the Weekly's revenues because its main creditor, the Bank of Montreal, has legal priority over any jury verdict. Village Voice Media owes the bank more than $80 million in outstanding loans. However, the Bank of Montreal has yet to show up in a San Francisco courtroom to try to stop the Guardian's collection effort.

Jay Adkisson, the Guardian's collections attorney, said the Bank of Montreal has no legal authority to intercede unless it declares that Village Voice Media has defaulted on its loans. As of late last week, there was no evidence that the newspaper chain had done so.

If the judge rules in favor of the Guardian, the Weekly likely will appeal. And Adkisson said that if the Guardian ultimately wins both cases, Village Voice Media likely will not only close the Weekly, but it will also have to sell at least two of its papers, and possibly more, to pay the judgment. 

The question is: Can the Guardian stay in business long enough to see that happen?

Correction: An earlier version of this story misspelled the last name of San Francisco Bay Guardian co-owner and publisher Bruce Brugmann.

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