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Reason to Question 

Is the Bay Guardian's lawsuit against SF Weekly connected to Bruce B. Brugmann's unfortunate business judgments?

Wednesday, Feb 2 2005
It was October, I was in New York City on business, and I was trying to respond to phone messages asking for comment about a lawsuit that the San Francisco Bay Guardian had filed here in San Francisco against the Weekly and its parent company, New Times Inc. I hadn't seen the lawsuit, but from what newspaper and television reporters were telling me, it seemed like warmed-over jabbering, a recycling of hyperbolic nonsense that Guardian Editor/Publisher Bruce B. Brugmann had tossed into the public arena more than two years earlier and then, seemingly, abandoned.

So why now, I wondered. What could be so pressing, so distressing, so urgent, now, that Brugmann would want to wade into the unpredictable and expensive swamp of litigation, in the process reminding the world, yet again, that his paper was losing key advertisers? What could it be?

A few months down the road, I think I'm in a position to offer reasonable thoughts about a possible answer or two to that question.

In January 2002, Thomas Burke, an attorney representing the San Francisco Bay Guardian, wrote a letter warning SF Weekly and New Times that they had engaged in anti-competitive and purely evil business practices aimed at driving the innocent and benighted Bay Guardian out of business. In the pompous prose that is the paper's unofficial trademark, Guardian Executive Editor Tim Redmond subsequently hinted at legal retribution to come if the Weekly and New Times did not mend their ways.

In October 2004, the Bay Guardian filed suit against the Weekly and New Times (and, for reasons that puzzle me, the East Bay Express, which is part of the New Times group but does precious little business in San Francisco), charging, as Redmond wrote in awkward excitement, "that the nation's largest alternative newsweekly chain had illegally sold advertising below cost in an effort to put the family-owned Bay Guardian out of business." Redmond claimed that New Times and its two Bay Area newspapers had sold ads "below the cost of producing them" and "offered secret deals to some advertisers" to keep them from advertising in the Bay Guardian. These actions constituted violations of unfair-business-practices laws instituted in the "progressive-reform era of Gov. Hiram Johnson," Redmond wrote.

It was a David-vs.-Goliath story line that fit the Bay Guardian's self-image to a T: Here was a feisty, local, progressive, independent, saintly, and otherwise perfect weekly newspaper and its progressive, independent, saintly, perfect owner bravely standing up to the conscienceless, rapacious monopolists of soulless chain journalism.

It was a story that echoed a glorious past: More than 30 years ago, the Bay Guardian sued the San Francisco Chronicle and San Francisco Examiner over conscienceless, monopolistic behavior called a joint operating agreement -- and won a big settlement!

It was a story that, in my opinion, followed in the finest traditions of Bay Guardian journalism: It presented less than the full truth in a misleading way.

While attempting to convince San Francisco that New Times was driving it out of business, the Bay Guardian forgot to explain that Bruce Brugmann had taken a multimillion-dollar plunge into commercial real estate, and had done so during one of the worst advertising recessions in recent history. In the Guardian's story of victimization, there was no room for its own penchant for selling ads at highly discounted rates.

And then there's that whole family-newspaper shtick. You know, the shtick that plays up Brugmann and his wife, but never mentions the Guardian's other owners, including the multimillionaire real estate mogul and his heiress wife.

If it didn't occur to him before then, Bruce Brugmann could have realized he is not a real estate genius on Dec. 21, 2001. That was the day when a stipulated judgment was entered in San Francisco Superior Court, ordering the Bay Guardian to pay one of its then-landlords $100,000. The judgment came after the landlord sued the Bay Guardian, claiming it had agreed, by e-mail, to pick up an option to extend the lease of 4,900 square feet of space at 540 Hampshire St. but then tried to renege on the deal. In the end, the Guardian agreed to pay $20,000 immediately and $2,500 a month until the $80,000 remainder of the judgment was paid.

Back then, the bulk of the Bay Guardian operation was housed next door, at 520 Hampshire. The Guardian had been paying about 70 cents a square foot each month for a 14,000-square-foot space, or a total of less than $10,000 a month, the landlord told an SF Weekly reporter in mid-2001.

In other words, during the salad days of the late 1990s, as the dot-com boom swelled Bay Guardian coffers with full-page ads, the Guardian was paying bargain-basement rent. But that rosy financial situation had changed by the time the paper's 10-year lease expired in May 2001. The Bay Guardian needed to secure long-term office space. Even though the dot-com bust was beginning to drive down costs, office rents were still above what the Bay Guardian was used to paying.

Meanwhile, the summer of 2001 came to an end, and al Qaeda scrambled the American consciousness by flying airliners into skyscrapers. The U.S. economy -- especially the tourist economy on which San Francisco is so dependent -- went into its own nose dive and stayed down, as 9/11 airplane attacks were followed by anthrax-laden letters, an invasion of Afghanistan, and a steady stream of warnings by John Ashcroft that more bad things would happen, soon. Very soon.

Advertising -- the lifeblood of newspapers, particularly free-circulation newspapers such as the Bay Guardian and SF Weekly -- slowed dramatically. It was anyone's guess as to how long the 9/11 recession would go on, or whether the economy would ever get back to where it had been before the World Trade Center towers fell.

Bruce Brugmann decided it was time to borrow millions of dollars and go into the real estate game.

About The Author

John Mecklin


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