WASHINGTON – A Washington Post Co. subsidiary’s purchase of 10 Southern Maryland newspapers has sparked antitrust concerns from three publishers who fear the latest move by the media giant could drive them out of business.
A Washington Post Co. spokesman said there is no merit to the antitrust questions raised by publisher of St. Mary’s Today, The Washington Times and the Montgomery and Prince George’s Sentinels.
The Gazette Newspapers Inc., a Post subsidiary which already publishes 35 community newspapers, announced the purchase of the 10 Chesapeake Publishing Corp. papers in a Feb. 2 front-page article in the Montgomery Gazette.
In the story, Gazette publisher Chuck Lyons called the deal a strategic move that extended the Gazette’s community newspaper coverage from the Pennsylvania line in Frederick County down to the Chesapeake Bay in Southern Maryland.
That brought an antitrust lawsuit by St. Mary’s Today and Berlyn Inc., which publishes the Sentinels, against the Post Co. and the Gazette in federal district court.
Before going to court, St. Mary’s Today publisher Ken Rossignol also e- mailed an antitrust complaint to the Justice Department.
“It’s down to the point now where the Washington Post controls every advertising dollar in Southern Maryland,” Rossignol said. “Rather than come out with my hands up, I’m asking for help.”
The Washington Times also has asked the Justice Department to look into possible antitrust violations in the deal. It owns the Calvert Independent and is concerned about the Gazette’s purchase of another Calvert County newspaper, the Recorder.
“That kind of put our dog in the hunt,” said Richard Amberg, the Time’s vice president and general manager. “We’re not sure there’s anything wrong, but it bears looking at.”
Amberg said the Times also is concerned by the Post Co.’s reach into Northern Virginia. Gazette Newspapers owns a 50-percent stake in Washington Suburban Press Network Inc., which operates community newspapers in Northern Virginia and is a defendant in the antitrust lawsuit.
In court papers, St. Mary’s Today and the Sentinels say the Post and Gazettes are gaining a monopoly on newspaper advertising by buying competing newspapers or squeezing them out of business by undercutting ad rates, hiring away staffers and stealing articles.
John Murphy, vice president of editorial for Gazette Newspapers, referred all questions on the case to Post spokesman Guy Knight, who said the suit is without merit because no legitimate antitrust concerns are at issue. He declined to elaborate further.
For 10 years, Rossignol has published his scrappy newspaper, which has a weekly circulation of about 5,000 copies in St. Mary’s County. He said the Gazettes, with their latest acquisitions, are in a position to drive away newspaper competition in Southern Maryland and charge monopoly advertising prices.
The Sentinels also accuse the Gazettes in the suit of raiding Sentinel staffers. In one weekend in late 1999, the lawsuit says, the Gazettes hired away the Sentinel’s entire six-member news staff. It further charges that the Gazettes infringed on its copyright by republishing articles that a reporter had written and had published as a Sentinel reporter.
George Liebmann, a Baltimore attorney representing the Sentinel newspapers, said the case centers on one company having too much market power. But Liebmann said he was reluctant to comment beyond what is spelled out in his client’s lawsuit.
In the Feb. 2 article, the Gazette said its 35 community newspapers have a combined circulation of 500,000. That was before the Gazette agreed to buy eight weekly or twice-weekly community newspapers in Southern Maryland from Chesapeake Publishing.
The papers include The Maryland Independent in Charles County, the Enterprise in St. Mary’s County, the Calvert County Recorder, the Enquirer- Gazette in Prince George’s County, the St. Charles Independent, the La Plata Independent, the Southern Maryland Connector and the South County Current. It also includes two publications serving military bases in the region, Flightline and Defense Contractor, and a commercial printing plant in Waldorf.
For years, newspapers across the country have been bought up by giant media firms like Chicago-based Tribune Co., which recently bought The (Baltimore) Sun’s parent company. Besides the big-ticket sales, however, newspapers have also been buying up smaller suburban or rural competitors.
Just a few years ago, the Justice Department would not have allowed such concentration of ownership, but that’s changed in the past five or six years, said John Morton, who runs a Maryland consulting firm that analyzes media companies.
The difference is competition from the Internet, cable television, radio and free newspapers distributed in so many markets, said Morton.
“There’s so many alternative media voices in every market, there’s not so much concern about concentration of newspaper ownership,” said Morton.
All of the papers in the dispute — the buyers, the sellers and those complaining — are clients of Capital News Service. Morton also writes a column on the newspaper business for American Journalism Review which, like CNS, is run by the University of Maryland College of Journalism.