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Wednesday, February 10, 2010

Media Village Voice Media as "Alter Ego," and What That Could Mean for the Seattle Weekly

Posted by Eli Sanders on Wed, Feb 10, 2010 at 11:05 AM

The Guardian: Successfully giving the finger to SF Weeklys legal weapon?

The Bay Guardian: Successfully giving the finger to SF Weekly's legal shield?

Back in January, we took a look at the more than $20 million judgment that's been levied against the San Francisco Weekly for "predatory pricing" of its ad space—and what that judgment could mean for the paper's parent company, which also owns the Seattle Weekly.

For those needing a brief recap, here's how this whole mess came to pass; why the independently owned Bay Guardian, which has already seized vehicles and rent checks from the San Francisco Weekly, is now threatening to seize assets of the Seattle Weekly and potentially more than a dozen other alt-weekly papers around the country; and why a representative of Village Voice Media, which owns the Seattle Weekly and all the other alt-weeklies in question, says the Bay Guardian "won't get a dime."

Also, here's why one person with interest in the case has, in the past, wanted to strangle another person with interest in the case using his own ponytail; why the complicated corporate structure of the Village Voice Media empire might help it avoid some of this debt collection; or might not; or, on the other hand, might; and how a flow-chart can help you get a picture of what's going on.

Now, the latest:

Yesterday, in an effort to sort out whether that complicated corporate structure can really help the Village Voice Media empire limit its exposure to the Bay Guardian's collections efforts, lawyers for the Bay Guardian filed a motion in San Francisco Superior Court to formally add Village Voice Media—specifically Village Voice Media Holdings, LLC and Village Voice Media, LLC—to the list of "judgment debtors" in this case. Why weren't they on the list already?

Because the original lawsuit that brought about the more than $20 million judgment was filed in October of 2004, back when the San Francisco Weekly was owned by an alt-weekly chain called New Times.

Shortly thereafter, New Times merged with Village Voice Media, creating, according to a press release issued at the time, "a truly national media company" with operations in many cities (including New York, where the merged company now controls the Village Voice; San Francisco, where it now controls the SF Weekly; and Seattle, where it now controls the Seattle Weekly). That "truly national media company" is currently majority-owned by the same people who previously owned only New Times.

But, because of its timing, the Bay Guardian's original lawsuit only named New Times, and not Village Voice Media, as the parent-company defendant.

Village Voice Media has been using that fact to argue that the Bay Guardian's collections efforts can only go as far up the corporate structure as New Times, which VVM says is now simply a holding company somewhere in the middle of its corporate structure, with no money to collect from it in any case.

The Bay Guardian wants to do away with that line of defense, and is arguing that because the same owners who were involved in its original lawsuit now run Village Voice Media, and because Village Voice Media has essentially become the "successor and alter ego" of New Times, Village Voice Media should be a fair target of its collections efforts.

A hearing is scheduled for March and Andy Van De Voorde, executive associate editor for Village Voice Media, is declining to comment. But if the Bay Guardian is successful in this part of its collections effort, it will be a lot harder for Van De Voorde to argue that the Seattle Weekly won't be affected if that $20 million+ judgment (which VVM is currently appealing) is fully collected.

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Comments (8) RSS

Oldest First Unregistered On Registered On Add a comment

It sucks, but going after the whole kit & kaboodle seems sound here.

Posted by Joe Szilagyi

on February 10, 2010 at 11:18 AM

I'll look forward to the March update.

Posted by Fifty-Two-Eighty

on February 10, 2010 at 11:34 AM

What other enterprises are owned by the company that owns The Stranger, ace?...

Posted by tell us something new on February 10, 2010 at 11:39 AM

OK. We get it. You're envious of them. So?

Posted by Will in Seattle

on February 10, 2010 at 11:45 AM

Well, now, I guess that would only be relevant if you had a $20 million judgment against The Stranger, wouldn't it? But since you don't, you're just a douchebag.

Posted by Fifty-Two-Eighty

on February 10, 2010 at 11:47 AM

You left out an important element of the story - not surprisingly, since it favors VVM. "Predatory" pricing in this case meant SFW was simply selling its ads at lower cost. Period. It's something the Stranger and Weekly do all the time to steal away the other's advertising. But California of course has a law against that - sure to be overturned on appeal. Meanwhile, you're making a lot of something your own paper practices because it might make your competitor look bad. A little honest reporting could earn you some cred. Eli?

Posted by Ex-SW on February 10, 2010 at 2:19 PM

@#6 Have you tried to read seattle weekly lately? They make themselves look bad enough without the stranger's help. Seriously, that paper is garbage.

Posted by armagerwien on February 10, 2010 at 2:27 PM

I'd keep anderson and shapiro and throw the rest away.

Posted by eec on February 10, 2010 at 2:37 PM