Bitter Battle For Readers p. 15

By: Randy Dotinga Charges fly as San Diego area dailies attempt to reachnon-subscribers with free entertainment publications sp.

TO SOME RESIDENTS across the nation, the colorful entertainment publications that show up unbidden on their doorsteps each week are nothing more than junk mail.
But the free publications, with names like Star Watch and Express Line, are profitable and popular. To a struggling community newspaper just outside of San Diego, they may be vital to its survival.
When a giant competitor tried to get in on the action, the newspaper cried foul. A bitter battle has ensued, spilling over into the courts and onto the community newspaper's front page, where its publisher accused his competitor of "skullduggery, deceit and dirty tricks."
At the center of the dispute is the 103-year-old Daily Californian, a 22,000-circulation newspaper in El Cajon, Calif. It covers a wide suburban area just east of the city of San Diego, in a valley socked-in by mountains and isolated from the ocean's cooling breezes.
The Daily Californian has struggled for some time, and its woes increased over the past year because of newsprint price hikes.
For most of this year, the local journalism community held a death watch, waiting for the newspaper to fold. Five editorial workers abandoned ship, and in May, the paper reduced publication from seven days-a-week to five.
In July, the paper laid off three full-time and five part-time employees, and cut the hours and pay of 30 other employees. (The newspaper's reporters, who write at least two stories a day, are reputed to be the most overworked in San Diego County.)
The Daily Cailfornian's main competitor is the San Diego Union-Tribune, a 380,000-circulation behemoth that covers all of San Diego County.
The main issue in the battle between the newspapers revolves around two publications that the newspapers throw onto the doorsteps of non-subscribers: Star Watch and Express Line. Both are nearly identical: They feature large pictures, fluffy features about celebrities and entertainment, columns, and food stories. Newspapers customize the publications and fill them with local ads.
The broadsheet-sized publications are becoming increasingly popular as newspapers discover they are a quick and easy way to make money and reach non-subscribers.
In 1989, the Daily Californian began publishing Express Line and it eventually helped offset the newspaper's losses. Then, in April 1994, the Union-Tribune held a series of meetings with the Daily Californian and other newspapers to talk about combining their resources to publish one total-market coverage publication, like Express Line or Star Watch.
According to a lawsuit filed in May, the Daily Californian gave private financial information to the Union-Tribune during the meetings, but got none in return. Then, the Union-Tribune abandoned the talks.
"When we look back on it, it was very stupid. We shouldn't have given them information, but we thought they were trying to set up something that would be good for everyone," said Conrad Shumadine, a lawyer from Norfolk, Va., who is representing the Daily Californian.
The lawsuit says the Union-Tribune, armed with its competitor's internal financial information, launched Star Watch in September 1994 and undercut Express Line's ad rates by one-third, in a brazen attempt to push the Daily Cailfornian out of business. The lawsuit alleges that the Union-Tribune operated Star Watch at a loss for seven months.
"They just took our information and started their product," Shumadine said. "Obviously, they would like to see the Daily Californian go out of business."
The lawsuit accuses the Union-Tribune of unfair business practices and anti-trust violations.
The Union-Tribune categorically denies all of the charges.
"Our position is that they simply don't believe the claims made in the lawsuit have any merit whatsoever," said Harold Fuson Jr., a lawyer who represents the Union-Tribune. "These claims are baseless."
Fuson acknowledged that Union-Tribune staffers met with those of the Daily Californian but said the talks "were of a perfectly lawful nature." He declined to go into further detail.
The Daily Californian enmity toward the Union-Tribune intensified during the late spring and summer. A front-page publisher's note in the Aug. 18 Daily Californian accused the Union-Tribune of communicating a variety of "dirty tricks."
The scathing note by publisher Paul Zindell charged that the Union-Tribune was spreading "vicious rumors" to the Daily-Californian's subscribers, saying that the newspaper was going out of business. "Nothing could be further from the truth!" Zindell wrote, with the sentence highlighted in bold print.
Zindell also wrote that the Union-Tribune was training to poach the Daily Californian's door-to-door solicitors, and said a former Union-Tribune delivery person was offered a $20 "bounty" to steal the Daily Californian's route listings from bundles of papers dropped off for youth carriers.
"As loyal subscribers to the Daily Californian we ask that you ignore these desperate moves on the part of our competitor and continue to support your local community newspaper," Zindell said.
Daily Californian attorney Shumadine declined to provide evidence of Zindell's charges, saying he would save that for the trial. The newspaper is asking for triple its losses, which are estimated at more than $25,000.
The Union-Tribune, through Fuson, denied all Zindell's charges. Fuson said that while many subscription solicitors are not under the newspaper's direct control, "we have always been concerned that their sales pitches are positive."
Although Fuson contends that the Daily Californian's charges are false, he said his newspaper has no intention of suing them for libel.
"It's not a good idea for practitioners of free speech to be suing each other for libel or anything else for that matter," he said.
Meanwhile, the lawsuit is not expected to go to trial for several months. The two newspapers continue to publish Star Watch and Express Line.
?( The Daily Californian parent Kendall Communications' Express Line.) [Photo & Caption]
?(The San Diego Union-Tribune's Star Watch) [Photo & Caption]
?(A front-page publisher's (top left) in the Aug. 18 Daily Californian accused the Union-Tribune of communicating a variety of "dirty tricks.") [Photo & Caption]
?(Dotinga is a great reporter for the Escondido, Calif., Times advocate) [Caption]