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Guardian, SF Weekly settle, terms not disclosed

The Bay Guardian and SF Weekly announced on their respective websites Monday that they have reached a settlement after the Guardian won a $21 million judgment over allegations that the Weekly sold ads at below cost in violation of state law.

While both publications wrote tens of thousands of words about the case as it moved through the courts, the announcements were short. Neither side disclosed the terms.

The Guardian said: “The parties have settled their differences on mutually acceptable terms.”

The SF Weekly said: “The agreement, under which the parties have resolved and settled their differences on mutually acceptable terms, brings the legal action to an end.”

However, the Weekly emphasized that it will “continue to do business as usual,” which may have been a response to a ruling in March that the Guardian would be allowed to collect 50% of the Weekly’s revenues to pay the judgment.

Settlement talks appeared to shift into high gear after the California Supreme Court on Nov. 23 rejected the SF Weekly’s appeal. Previously a San Francisco jury and an appeals court sided with the Guardian, headed by Bruce Brugmann.

The $21 million verdict (which includes interest that accrued after the $15.9 million verdict) appeared to be more than the SF Weekly and its parent, Phoenix-based Village Voice Media (formerly New Times), could afford. In March, a Seattle alt-weekly reported that the 16-paper Village Voice Media chain had defaulted on an $80 million loan from the Bank of Montreal.

During the March 2008 trial, jurors were told that the SF Weekly had lost money for the past 12 years. The Guardian’s lawyer suggested that the Weekly’s owners were willing to accept such losses in the hopes they would force Brugmann out of business.

After the verdict, the SF Weekly said on its blog: “Today’s verdict in Bruce Brugmann’s suit was an expensive lesson in laws, lawyers, and lawsuits, and how one man’s obsession manipulated the system. Like Ralph Nader, Bruce Brugmann is out of touch with reality.”

On the other hand, the Guardian said in its post-verdict comment that the verdict had larger implications: “[It] sends a clear signal to small businesses, independent newspapers and the alternative press that a locally owned publication has the right to a level playing field and that a chain can’t intentionally cut prices and sell below cost to injure a smaller competitor.”

The Guardian stuck by that theme in its announcement on Monday, saying, “Thanks, folks. You preserved a crucial state law, and you proved that persistence in the pursuit of justice is worthwhile. Small businesses in California will never forget it.”

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