Despite facing legendary antitrust lawyers in a state notorious for its aversion to monopolistic practices, Mr. Lacey spent years appealing the court’s award of $16 million, which grew to $21 million with interest, until the California Supreme Court threw out VVM’s petition. During the proceedings, the company revealed that it owed creditors $80 million and claimed it could not afford to pay the award. Lawyers for the Bay-Guardian threatened to force bankruptcy.
In January 2011, VVM and SF Weekly settled the issue privately. Though the terms of the agreement were not disclosed, between the settlement and what one attorney familiar with the case said were legal fees of at least $5 million to fight the case, VVM was likely left with an eight-figure hole burned in its pocket.
Since last spring, the company’s efforts to patch that hole up have included the unthinkable (laying off legendary Village Voice investigative reporter Wayne Barrett in January); the surprising (selling off Kansas City Pitch to Tennessee publisher South Comm, Inc., in mid-March); and the long overdue: shutting down an experiment with a pair of sex blogs that were never publicly launched despite being published for nearly a year.
“It didn’t quite work,” new media director Bill Jensen told The Observer of the Naked City blogs, “and when we get down to doing budgets for the next year, we’d rather take that money along the lines of our core product.”
As with all print media outlets, VVM´s “core product” is changing. Early this year VVM named a new group publisher, Joshua Fromson, formerly of SF Weekly, specifically for his agility with that property’s digital product. He moved to New York and got started earlier this month, helping to launch a national “Best Of” app, which pairs GPS with the city guide content from the papers’ various “Best Of” issues.
According to Mr. Jensen, VVM is better equipped than most media companies to weather the financial transition from print- to Web-advertising models, simply because alt-weeklies were never spoiled by full-page, four-color national campaigns. (It should be noted, however, that many local advertising markets have proven more volatile than the market for national ads.)
”We’ve always had boots on the street,” he elaborated. “We were going after the small, cool bar on the corner and partnering up with them to have small, inexpensive ads at a high volume.”
He added that the complaint that editorial budget cuts have turned alt-weeklies into empty advertising vehicles is beside the point. “The ad is content,” Mr. Jensen maintained. “People are looking at the ads as much as the stories. It’s always been that way.”