Pasties and a G-Man

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This editorial appeared in the Nov. 25 issue of E&P.

Somebody has to speak up for the beleaguered legions of strip clubs, massage parlors, and escort services in Los Angeles that find themselves at the mercy of a monopolistic alternative tabloid — and that somebody, apparently, is the U.S. Justice Department’s Antitrust Division.

That, anyway, is the impression you’d get from a report last week in the Los Angeles Times. Culture writer Tim Rutten wrote that Justice has opened a “serious investigation” into whether antitrust laws were violated by the early October deal between NT Media LLC, which folded New Times Los Angeles and publishes Cleveland Scene, and Village Voice Media LLC, which shut down Cleveland Free Times and publishes LA Weekly. The chains passed some cash between themselves, and each agreed to kill the lagging alternative paper it published in the other’s market.

If the L.A. Times report is correct, this investigation is serious, indeed. Former New Times L.A. employees are being interviewed by deputy U.S. attorneys — a sign, according to an antitrust specialist quoted by Rutten, that the government is thinking “beyond civil penalties to criminal prosecution.”

As near as anybody can figure, the “crime” appears to be depriving adult-entertainment advertisers of the opportunity to play one alternative paper against the other. One can only imagine the press conference in which Attorney General John Ashcroft — standing in front of the blue curtain he installed to hide the statue of a topless Spirit of Justice — denounces the nefarious NT Media/Voice Media cartel for driving up advertising costs of the 4-Play Gentlemen’s Club or Lady Laura’s Dominion.

It’s not an argument Justice can make with a straight face. For one thing, sex-oriented advertisers have plenty of media choices and have been migrating their business to the Internet for years now.

More to the point, New Times L.A. hardly left 9.5-million Angeleno consumers bereft of media when it pulled its 105,000 weekly copies out of the market. Even putting aside the hundreds of Web, TV, and print possibilities available to consumers and advertisers, there are at least five alternative newspapers targeting greater L.A.

And the alternative niche has never been more attractive to competitors than right now. Let’s face it, one reason NT Media decided to exit L.A. may not have been fear of Voice Media’s seven-paper juggernaut — but the prospect that the L.A. Times might launch an alternative-style publication, as its parent Tribune Co. did recently with the daily RedEye in Chicago.

The alternative-newspaper business has surely changed, but barriers to entry are still so low that even the most entrenched “monopoly” alternative papers cannot deter competition. Just this summer in San Diego, for instance, smallish Southland Publishing Inc. launched a challenger to the venerable San Diego Reader.

This “serious investigation” reveals a risibly misplaced sense of priorities at the Antitrust Division.

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