Tribune Publishing pushes back against DOJ monopoly charge

Tribune refuted federal antitrust conces related to its bid to buy the Orange County Register and Riverside Press Enterprise, arguing that newspaper monopolies are outdated.

Lawyers for Tribune Publishing responded in a brief Friday to a lawsuit filed a day earlier by the U.S. Department of Justice, seeking to keep Tribune from acquiring the two newspapers in a bankruptcy auction Monday.

“In this day and age, newspapers caot be reasonably considered to be their own relevant product market, notwithstanding the cases from the 1950s and 1960s cited by the govement,” a brief filed by Tribune’s lawyers reads in part.

A Tribune subsidiary, Orange County Media LLC, bid $56 million late Wednesday for Freedom Communications. That beat Digital First Media — which owns nine daily newspapers in Southe Califoia, including this one — and a group that includes current Freedom Communications President and CEO Rich Mirman.

The DOJ wants a court order to stop Tribune’s bid.

“Without such an order, Tribune will take control of The Register and Press-Enterprise newspapers, immediately harming consumers through this lost competition,” the department’s motion continues. “Tribune could also begin to integrate its newly acquired assets into those of the Los Angeles Times and take actions at odds with preserving a competitive marketplace, including accessing Freedom’s confidential competitive information, firing employees, and shuttering operations.”

Not so, according to Tribune’s brief.

“Tribune and Freedom sell newspapers and online content to readers, and sell advertising (display advertising and pre-printed inserts) to advertisers. There are multitudes of other sources that provide content and advertising,” Tribune’s brief continues. “In addition to numerous other print publications in Southe Califoia, there are numerous radio and television outlets and a multitude of online sources of content and advertising.”

Tribune’s brief even quotes the former chief of the Department of Justice’s antitrust division, Christine Vaey.

“The advent of the Inteet has meant increased competition for readers and advertising dollars,” which has “left many newspapers in perilous financial straits, with a few closing and others forced to undertake drastic cost cutting,” Vaey said in 2011, in remarks made to the Newspaper Association of America. “Many new sources of news and commentary are emerging and the Inteet has enabled the broader dissemination of news and analysis.”

In other words, Tribune’s brief reads in part, “technology has fundamentally altered the place of newspapers in American society.”

Advertisement

“The Inteet has exploded with new news and information sites. If readers want news on any particular topic, they can look to Google News, Apple News, numerous search engines, or various media. For local news in Orange County, they can tu to numerous on-line local sources,” the brief reads in part. “For leading national or inteational news, they can easily look to a world of sources, from the New York Times to CNN’s web site to the Financial Times or BBC in London to sites in most every major city. For business news, they can easily click on the Wall Street Joual or MarketWatch or CNBC or Forbes or Yahoo Business. For classifieds they can look to Craigslist. For better or worse, the court and the govement need only look at the phone in their pocket to understand that the trend toward digital content is accelerating.”

As a result of these changes, “Freedom is in bankruptcy for the second time in less than a decade. The Los Angeles Times has seen its advertising revenue fall significantly.”

How bad have things gotten?

“The newspaper industry has taken a beating as it faces competition from sources of digital information and from other sources of advertising, including Inteet, magazines, TV, radio, local cable, direct mail, shared mail, and outdoor advertising,” economist William Hall wrote in an analysis of the proposed acquisition that was entered into evidence by Tribune Publishing on Friday. “The Times has seen its advertising revenue fall from $435 million in 2010 to $249 million in 2015. The revenue is projected to fall again in 2016 to $222 million. This dramatic fall in its advertising revenue is not simply due to other newspapers, as most newspapers have seen the same type of decline. The lost revenue has gone to the other sources of advertising, and it is against those different types of media that the Times continues to compete.”

And, Tribune argues, there’s not a lot of time to debate the issue:

“If Tribune caot close by March 31 – the date on which Freedom has told the bankruptcy court it must close the sale or risk liquidation – then Freedom must revert to the next bidder’s back-up bid, which affords between $3 million and $13 million less value to Freedom’s bankruptcy estate,” the brief reads in part.

Bankruptcy courts are intended to serve the best interests of creditors.