Arizona AG Suit Rejected — ‘Tucson Citizen’ Can Stay Folded

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By: Mark Fitzgerald

The Tucson Citizen can remain dead as a print newspaper, a federal judge ruled Tuesday, saying the Arizona attorney general’s office had not shown folding the Gannett Co. daily was a violation of antitrust law.

“While regrettable that the Citizen’s illustrious legacy must come to end, it can not be said at this time, the decision to close the Citizen involves an anti-trust violation,” U.S. District Court Judge Raner Collins wrote in his opinion denying the temporary restraining order (TRO) request from Arizona authorities.

“The Court can not say at this point in time that there is a violation of the Newspaper Preservation Act,” Collins added. “While, it is true the closing of the Citizen is an irreparable harm, the plaintiff has failed to show the balance of hardships weighs in their favor.”

Collins says there is no evidence at the moment that there is a “ready and willing buyer to pay the fair and reasonable liquidation value of the Tucson Citizen assets.”

He added if he were to apply the “failing company” test of the Newspaper Preservation Act, “the Citizen would qualify.”

On Saturday, the Citizen published its last print edition, and Gannett announced it had terminated its joint operating agreement (JOA) with Lee Enterprises Inc.’s Arizona Daily Star, but that the two would remain partners, sharing profits and expenses in Tucson.

Arizona’s attorney general argued the move violated terms of the Newspaper Preservation Act and antitrust law generally, and that there was an eligible buyer in Stephen Hadland, a newspaper publisher in Culver City, Calif. Hadland offered $400,000 for the assets of the Citizen, which did not include a stake in the JOA, while Gannett initially asked for $1 million, then lowered its price to $800,000.

In court, a Gannett lawyer argued the offer was too low, and that it could not be compelled to sell at just any price.

Hadland, CEO of Santa Monica Media Company LLC said the attorney general probably would have prevailed had the office been given more time to prepare their case.

He called the ruling “a sad day for newspapers.”

“Instead of using one newspaper?s profits to help the other newspaper as was intended by the Newspaper Preservation Act of 1970 the Arizona Star is now free to feast on the carcass of the Tucson Citizen,” he told E&P.

“Along with thousands of ‘Citizen’ readers and subscribers throughout Tucson, we are disappointed with the judge’s ruling,” Anne Titus Hilby, press secretary for the Arizona attorney general’s office, said in a prepared statement. “At this time, we are reviewing the decision and determining how best to proceed with the anti-trust litigation.”

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