Tucson Citizen won’t be forced to resume publication - East Valley Tribune: Arizona

Tucson Citizen won’t be forced to resume publication

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Posted: Tuesday, May 19, 2009 11:44 pm | Updated: 2:42 am, Sat Oct 8, 2011.

TUCSON - The Tucson Citizen won’t be forced to resume publication. A federal judge ruled Tuesday that the Arizona Attorney General’s Office failed to show that the Citizen’s owner, Gannett Co., violated antitrust laws by stopping daily publication of the 138-year-old newspaper with last Saturday’s issue.

“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 antitrust violation,” U.S. District Judge Raner Collins wrote.

The state contended Gannett’s decision eliminated competition and fostered a monopoly situation for Gannett and Lee Enterprises Inc., publisher of the city’s larger newspaper, the Arizona Daily Star.

The state said the companies stopped publication of the Citizen to make more money.

The Citizen and Star had operated under a joint operating agreement for decades. Under the agreement, Tucson Newspapers Inc., a company co-owned by Gannett and Lee, handled printing and other noneditorial functions, and shared costs, profits, and losses.

Although the JOA was terminated with Saturday’s final edition, Gannett and Lee decided to continue to share costs and profits equally from any lingering Citizen operations and the Star’s.

Collins said while “it is true the closing of the Citizen is an irreparable harm,” the state didn’t prove there was a violation of the 1970 Newspaper Preservation Act, which created JOAs as an exemption to federal antitrust law.

JOAs have given newspapers competing in the same market a way to survive — by sharing business operations, such as advertising, publishing and distribution costs, while keeping newsrooms separate.

But they became less profitable as newspaper readership and advertising revenues began to decline, and costs to report and publish the news went up.

Nancy Bonnell, chief of the state attorney general’s antitrust unit, argued in court Monday that because the Citizen was losing money, Gannett and Lee determined their joint business entity, Tucson Newspapers Inc., “would make more money if they closed one of the papers” and operated only the profitable Star.

“Even in recession last year, the parties made $16 million — but that wasn’t enough,” Bonnell said.

Bonnell said the attorney general’s office would decide this week whether to file an appeal on the antitrust issue.

The judge’s ruling means the Citizen can proceed with plans to turn the brand into an opinion-and-commentary Web site and a printed Tucson Citizen editorial weekly to be distributed inside the Star.

Kate Marymont, vice president for news with Gannett’s community publishing division, said that even though the company won’t be printing its own newspaper, it is allowed to earn money from the partnership because it will help pay the costs of producing the rival newspaper.

She said Gannett and Lee both come out ahead by eliminating the costs of producing the money-losing Citizen.

The attorney general’s office filed its complaint after David Ganezer, an executive with Santa Monica Media Co., said he made a realistic offer to purchase the Citizen but Gannett denied it.

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