Charleston, W.Va., Newspapers Plan to Fight Federal Antitrust Lawsuit

By: E&P Staff The owners of West Virginia's Charleston Gazette and Charleston Daily Mail will fight a lawsuit filed against them by the U.S. Department of Justice, according to a story in today's Daily Mail.

On Tuesday, the justice department filed the suit in federal district court in Charleston, alleging that the Daily Gazette Co. and Denver-based MediaNews Group Inc. violated federal antitrust laws when they entered into a series of 2004 transactions the department says "resulted in the acquisition by Daily Gazette Co. of the Daily Mail from MediaNews."

The department wants the transactions undone, contending that they led to a decrease in competition between the two papers. The complaint alleges the Daily Gazette Co. bought the Daily Mail intending to close it, and was moving in that direction until the department began investigating in late 2004.

"When Daily Gazette Company acquired the Daily Mail with the aim of shutting it down, readers in the Charleston area, and the advertisers who value access to them, were denied the benefits of competition," said Thomas O. Barnett, assistant attorney general for the justice department's antitrust division, as quoted in the Daily Mail piece.

The owners of the Charleston papers disagree that the Gazette bought the Daily Mail, and that competition has suffered.

"The department's contention that the parties competed outside the JOA [joint operating agreement] prior to the 2004 amendment shows that it does not understand how JOAs are structured and how they operate," MediaNews President Joseph Lodovic said in a statement. "The parties have never done that.

"Since the 2004 restructuring of the Charleston JOA, MediaNews Group has maintained editorial control over the Daily Mail. The Daily Mail and the Gazette have remained as journalistically competitive as ever, and the people in Charleston continue to benefit from the choice of two fine newspapers. The department's attack on the JOA undermines rather than promotes newspaper competition in Charleston."

And Elizabeth E. Chilton, president and publisher of the Gazette, said in a statement: "The federal government's action is inexplicable, attacking the structure which produces Charleston's two vibrant newspapers. The Gazette knows of no law that has been violated."

She added that Charleston is the smallest city in the country that still has a JOA with two independent daily papers, "and publishers of both the Gazette and Daily Mail want it to continue to provide the people of Charleston with competing editorial voices. The antitrust division's lawsuit threatens the continuation of the JOA, and we intend to contest it vigorously."