Tucson Citizen - May 16th Closure Temporarily Stopped

Arizona Attorney General Seeks Federal Court Order to Stop Tucson Citizen Closure
By Dale Quinn, Arizona Daily Star
Tucson, Arizona

The state Attorney General's Office has filed a federal complaint seeking a temporary restraining order to stop the Tucson Citizen from ceasing publication.

The complaint filed in U.S. District Court in Tucson alleges the paper should not be closed until violations of state and federal antitrust laws are examined, said spokeswoman Anne Hilby.

The announcement comes the day Citizen owner Gannett Co. Inc. announced it would publish its last print edition Saturday while continuing an online edition.

Gannett announced Jan. 16 its plans to sell the Citizen’s Web site, archives and certain other assets or shut down the paper March 20. On March 17, Gannett said it would continue publishing past the March 20 deadline on a day-to-day basis as negotiations with viable buyers continued.

Gannett’s vice president of news, Kate Marymont, said this evening she couldn’t comment on the restraining order or what it means for the paper because she had just heard about the filing, which comes on the heels of an investigation into the sale by the U.S. Department of Justice’s antitrust division.

The Justice Department conducted a thorough examination into the joint operating agreement between the Citizen and Tucson’s morning newspaper, the Arizona Daily Star, said spokeswoman Gina Talamona.

The Justice Department regulates joint operating agreements like the one that binds Tucson’s two daily newspapers. Both papers have independent editorial control but share production, distribution and advertising through a company called Tucson Newspapers.

Under the terms of the JOA, Gannett and Lee split profits from the papers. The JOA would also end Saturday under the terms of Gannett’s announcement, while the two companies continue splitting profits from Tucson Newspapers even though Gannett won’t be producing a paper. But in the sale, Gannett didn’t offer its stake in the JOA. Because of that, newspaper experts said there was little chance a potential buyer would emerge.

But at least one did.

Stephen Hadland, CEO of the Santa Monica Media Co., was interested in purchasing the newspaper. His media group publishes five papers in the Los Angeles area. He said Gannett wanted $1 million for the assets of the Citizen. He offered $400,000, but the Citizen refused to budge below $800,000.

Hadland sent a letter to the Arizona Attorney General’s office Friday requesting it file a temporary restraining order preventing Gannett from closing the Citizen and requiring it to continue printing the paper pending a sale to a qualified buyer.

“The Tucson Citizen has been systematically destroyed by its owners and I believe it remains a viable and popular newspaper in the community,” Hadland wrote in the letter.

For the Citizen to go on as announced by Gannett is a “perversion” of the Newspaper Preservation Act of 1970, he said. Hadland also pointed out that Gannett had made publishing a print edition three times a week a requirement of the sale.

Operation and dissolution of JOAs is guided by the Newspaper Preservation Act and regulated by the Justice Department.

Hadland said because the Justice Department failed to take action he turned to the Arizona Attorney General.

The case was assigned to Raner Collins, Hilby said, but the complaint did not include a deadline as to when a hearing should take place.

The complaint says that readers in Pima County have benefitted for more than a century from competition between the Star and the Citizen. Gannett and Lee are violating antitrust laws by closing the Citizen while sharing profits generated by the Star after it becomes the monopoly paper.