[Federal Register Volume 68, Number 29 (Wednesday, February 12, 2003)]
[Notices]
[Pages 7132-7147]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-3441]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. Village Voice Media, LLC, & NT Media, LLC; 
Proposed Final Judgment and Competitive Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. section 16(b) through (h), that a proposed 
final judgment, Hold Separate Stipulation and Order, and Competitive 
Impact Statement have been filed with the United States District court 
for the Northern District of Ohio in United States of America v. 
Village Voice Media, LLC, and NT Media, LLC, Civil Action No. 
1:03CV0164. On January 27, 2003, the United States filed a Complaint 
alleging that the market allocation agreement between New Times and 
Village Voice Media was per se illegal under section 1 of the Sherman 
Act, 15 U.S.C. 1. The proposed final judgment, filed the same time as 
the complaint, (i) enjoins Village Voice Media and New Times from 
taking any actions in furtherance of, or required under, their per se 
illegal market allocation agreement; (ii) requires defendants to divest 
all the assets used in connection with the publication of the New Times 
LA, New Times's alternative newsweekly in Los Angeles, and the 
Cleveland Free Times, Village Voice Media's alternative newsweekly in 
Cleveland, for the purpose of establishing a viable competitive 
alternative newsweekly in both geographic markets; (iii) permits any 
advertiser that entered into an advertising or promotion contract after 
October 1, 2002, with Village Voice Media's LA Weekly, or New Times's 
Cleveland Scene, for a specified time and solely at the advertiser's 
option, to terminate such contract without penalty or threat of 
retaliatory action; (iv) requires Village Voice Media and New Times to 
notify the United States for the next five years of any future 
acquisitions, or sales of, alternative newsweeklies; (v) prevents both 
defendants from enforcing any non-compete contractual provisions 
against any current or former employees involved in their Cleveland or 
Los Angeles alternative newsweeklies; and (vi) prevents each defendant 
and its officers, directors, agents, and employees, from entering into, 
continuing, maintaining, or renewing any market or customer allocation 
agreement. Copies of the complaint, proposed final judgment, and 
competitive impact statement are available for inspection at the 
Department of Justice in Washington, DC, in Room 200, 325 Seventh 
Street, NW., on the Department of Justice's web site at http://www.usdoj.gov/atr/, and at the Office of the Clerk of the United States 
District Court for the Northern District of Ohio, Eastern Division, in 
Cleveland, Ohio.
    Public comment is invited within 60 days of the date of this 
notice. Such comments, and responses thereto, will be published in the 
Federal Register and filed with the Court. Comments should be directed 
to James R. Wade, Chief, Litigation III Section, Antitrust Division, 
Department of Justice, 325 7th Street, NW., Suite 300, Washington, DC 
20530 (telephone: (202) 616-5935).

Constance K. Robinson,
Director of Operations.

Hold Separate Stipulation and Order

    It is hereby stipulated and Agreed by and between the undersigned 
parties, subject to approval and entry by this court, that:

I. Definitions

    As used in this Hold Separate Stipulation and Order:
    (A) ``Acquirer'' or ``acquirers'' means the entity or entities to 
which defendants divest the Divestiture assets.
    (B) ``Alternative newsweekly'' means a publication (such as the 
Cleveland Scene or LA Weekly) that posses more than one of the 
following attributes: (i) It is published in a geographic area served 
by one or more daily newspaper to which residents turn as their primary 
source or sources of printed news; (ii) it is published weekly (or less 
frequently), and at least 24 times annually; (iii) it is distributed 
free of charge; (iv) it is not owned by a daily newspaper publishing 
company; and (v) it is a general interest publication that does not 
focus exclusively on one specific topic, such as music, entertainment, 
religion, the environment, or a political party or organization.
    (C) ``Cleveland Free Times assets'' means all assets within the 
possession, custody or control of Village Voice Media and New Times 
that were formerly employed in the publication of the Cleveland Free 
Times alternative newsweekly in the Greater Cleveland area by Village 
Voice Media before October 1, 2002, including, but not limited to:
    (1) All rights to the Cleveland Free Times name (and any 
derivations thereof), logo, layout and design, including all legal 
rights, including intellectual property rights associated with the 
Cleveland Free Times, including trademarks, trade names, service names, 
service marks, designs, trade dress, patents, copyrights and all 
licenses and sublicenses to such intellectual property to the fullest 
extent sublicensable (provided that, with respect to any rights not 
legally transferable, Village Voice Media shall assist, and neither 
impede nor hinder, the Acquirer in negotiating with, and obtaining all 
necessary legal right from, the third party controls such rights);
    (2) Except for the payroll systems located in New York, New York, 
all computer hardware, software and licensing agreements connected with 
that software to the fullest extent sublicensable (provided that, with 
respect to any rights not legally transferable, Village Voice Media 
shall assist, and neither impede nor hinder, the acquirer in 
negotiating with, and obtaining all necessary legal rights from, the 
third party who controls such rights); and all information relating to 
the Cleveland Free Times stored on the computer hardware, including all 
design templates and databates;
    (3) All office furniture, telephone systems, T-1 lines, fax 
machines, copy machines, stationery, business cards, rate kits, and all 
other supplies and equipment used by the Cleveland Free Times;

[[Page 7133]]

    (4) All rights to the Cleveland Free Times website and URL 
(www.freetimes.com);
    (5) All rights to the print and electronic archives of the 
Cleveland Free Times publications and articles on a non-exclusive 
basis;
    (6) All assets used in the publication of the Cleveland Free Times, 
including all distribution racks, street distribution boxes, permits 
and licenses for individual distribution racks and boxes, route sheets, 
and leases or other rights to real property from which Village Voice 
Media published the Cleveland Free Times; and
    (7) All other tangible and intangible assets used in the 
publication of the Cleveland Free Times, including, but not limited to: 
All other leases; all licenses, permits and authorizations issued by 
any governmental organization; all contracts, terming arrangements, 
agreements, commitments, certifications, and understanding, including 
supply agreements, all customer lists, contracts, accounts, and credit 
records; all agreements with retailers, wholesalers, or any other 
person regarding the sale, promotion, marketing, advertising or 
placement of such products; all graphics and artwork relating to the 
Cleveland Free Times; all other records stored in the office of, or 
generated by or fore, the Cleveland Free Times; all technical 
information, computer software and related documentation, and know-how, 
and information relating to plans for, or improvements to, the 
Cleveland Free Times; all research, packaging, sales, marketing, 
advertising and distribution know-how, information, data, and 
documentation, including marketing and sales data, and layout designs, 
and manuals and technical information Village Voice Media provided to 
any of its Cleveland Free Times employees, customers, suppliers, agents 
or licensees; and all specifications for materials.
    (D) ``Divestiture assets'' means the Cleveland Free Times Assets 
and the New Times LA Assets.
    (E) ``Greater Cleveland area'' means the counties of Cuyahoga, 
Lake, Geauga, Portage, Summit, Medina and Lorain in the state of Ohio.
    (F) ``Greater Loss Angeles area'' means the counties of Los 
Angeles, Orange, San Bernardino, Riverside and Ventura in the state of 
California.
    (G) ``New Times'' means defendant NT Media, LLC, a limited 
liability company organized and existing under the laws of the State of 
Delaware with its headquarters in Phoenix, Arizona, its successor and 
assigns, and its subsidiaries, divisions, groups, affiliates, 
partnerships and joint ventures, including without limitation Cleveland 
Scene, LLC, and New Times Los Angeles, LP, and their directors, 
officers, managers, agents, and employees.
    (H) ``New Times LA Assets'' means all assets within the possession, 
custody or control of New Times and Village Voice Media that were 
formerly employed in the publication of the New Times LA alternative 
newsweekly in the Greater Los Angeles area by New Times before October 
1, 2002, including, but not limited to:
    (1) Subject to the provisions of section V(K) of the proposed final 
judgment, all rights to the New Tiems LA, LA Reader and LA View names 
(including any derivations thereof), logos, layout and design, 
including all legal rights, including intellectual property rights 
associated with the New Times LA, LA Reader and LA View, including 
trademarks, trade names, service names, service marks, designs, trade 
dress, patents, copyrights and all licenses and sublicenses to such 
intellectual property to the fullest extent sublicensable (provided 
that, with respect to any rights not legally transferable, New Times 
shall assist, and neither impede nor hinder, the Acquirer in 
negotiating with, and obtaining all necessary legal rights from, the 
third party who controls such rights);
    (2) All computer hardware, software, and licensing agreements 
connected with that software to the fullest extent sublicensable, which 
are associated primarily with the publication of the New Times LA, 
including all rights to the New Times LA website and URL 
(www.newtimesla.com); all information relating to the New Times LA 
stored on the computer hardware, including all design templates and 
databases; New Times shall provide in the original format to the 
Acquirer (if such format is not readable or usable by commercially 
available software, then New Times shall provide such data in such 
format the Acquirer may reasonably specify) all other information 
relating to the publication of New Times LA stored on New Times's 
computer hardware (provided that, with respect to any rights not 
legally transferable, New Times shall assist, and neither impede nor 
hinder, the acquirer in negotiating with, and obtaining all necessary 
legal rights from, the third party who controls such rights);
    (3) All office furniture, telephone systems, T-1 lines, fax 
machines, copy machines, stationery, business cards, rate kits, and all 
other supplies and equipment used by the New Times LA;
    (4) All rights to the print and electronic archives of New Times LA 
publications and articles on a non-exclusive basis;
    (5) All graphics and artworks used in the publication of the New 
Times LA and New Times's other alternative newsweeklies as of October 
1, 2002, on a non-exclusive basis;
    (6) All assets used in the publication of the New Times LA, 
including all distribution racks, street distribution boxes, permits 
and licenses for individual distribution racks and boxes, route sheets, 
and leases or other rights to real property from which New Times 
published the New Times LA; and
    (7) All other tangible and intangible assets used in the 
publication of the New Times LA; including, but not limited to: all 
other leases; all licenses, permits and authorizations issued by any 
governmental organization; all contracts, teaming arrangements, 
agreements, commitments, certifications, and understandings, including 
supply agreements; all customer lists, contracts, accounts, and credit 
records; all agreements with retailers, wholesalers, or any other 
person regarding the sale, promotion, marketing, advertising or 
placement of such products; all graphics and artwork relating 
exclusively to the New Times LA; all other records stored in the 
offices of, or generated by or for, the New Times LA; all technical 
information, computer software and related documentation, and know-how, 
and information relating to plans for, or improvements to, the New 
Times LA; all research, packaging, sales, marketing, advertising, and 
distribution know-how, information, data and documentation, including 
marketing and sales data, and layout designs used exclusively in, or 
which relate exclusively to, the publication of the New Times LA (and 
copies of such know-how, information, data and documentation which 
relates to the publication of the New Times LA); all manuals and 
technical information New Times provided to any of its New Times LA 
employees, customers, suppliers, agents or licensees; and all 
specifications for materials.
    (I) ``Publication'' means all activities associated with the 
business of offering an alternative newsweekly to the public as a 
commercial endeavor, including, but not limited to, editing, writing, 
printing, circulating, operating, marketing, and distributing such 
alternative newsweeklies, and selling advertisements and promotions 
therein.
    (J) ``State Attorneys General'' means the Office of the Attorney 
General of the State of Ohio and the Office of the

[[Page 7134]]

Attorney General of the State of California, who may share information 
and consult with the Office of the Los Angeles County District Attorney 
on any matters arising under this hold separate stipulation and order.
    (K) ``Village Voice Media'' means defendant Village Voice Media, 
LLC, a limited liability company organized and existing under the laws 
of the State of Delaware with its headquarters in New York, New York, 
its successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnerships and joint ventures, including without 
limitation LA Weekly Media, Inc. and Cleveland Free Times Media, Inc., 
and their directors, officers, managers, agents, and employees.
    (L) The terms ``and'' and ``or'' have both conjunctive and 
disjunctive meanings.

II. Objectives

    The final judgment filed in this civil action is meant to ensure 
prompt divestitures for the purpose of establishing viable competitors 
in the alternative newsweekly industry in order to remedy the effects 
that the United States alleges have resulted, and would otherwise 
continue to result, from the defendants' agreement that the United 
States alleges to have violated section one of the Sherman Act. The 
hold separate stipulation and order ensure, prior to such divestitures, 
that the Cleveland Free Times Assets and New Times LA Assets remain 
economically viable, and that the divestiture assets be maintained and 
not be diminished during the pendency of the ordered divestitures.

III. Jurisdiction and Venue

    This court has jurisdiction over the subject matter of this action 
and over each of the parties hereto, and venue of this action is proper 
in the United States District Court for the Northern District of Ohio.

IV. Compliance With and Entry of Final Judgment

    (A) The parties stipulate that a final judgment in the form 
attached hereto as Exhibit A may be filed with and entered by this 
court, upon the motion of any party or upon this court's own motion, at 
any time after compliance with the requirements of the Antitrust 
Procedures and Penalties Act (15 U.S.C. 16), and without further notice 
to any part or other proceedings, provided that the United States has 
not withdrawn its consent, which it may do at any time before the entry 
of the proposed final judgment by serving notice thereof on defendants 
and by filing that notice with this Court.
    (B) Defendants shall abide by and comply with the provisions of the 
proposed final judgment, pending the judgment's entry by this court, or 
until expiration of time for all appeals of any court ruling declining 
entry of the proposed final judgment. Defendants, from the date of the 
signing of this hold separate stipulation and order by the parties, 
shall comply with all the terms and provisions of the proposed final 
judgment as though the same were in full force and effect as an order 
of this court.
    (C) This hold separate stipulation and order shall apply with equal 
force and effect to any amended proposed final judgment agreed upon in 
writing by the parties and submitted to this Court.
    (D) In the event that (1) the proposed final judgment is not 
entered pursuant to this hold separate stipulation and order, the time 
has expired for all appeals of any court ruling declining entry of the 
proposed final judgment, and this court has not otherwise ordered 
continued compliance with the terms and provisions of the proposed 
final judgment, or (2) the United States has withdrawn its consent, as 
provided in section IV(A) above, then the parties are released from all 
further obligations under this hold separate stipulation and order, and 
the making of this hold separate stipulation and order shall be without 
evidentiary prejudice to any party in this or any other proceeding.
    (E) Defendants represent that the divestitures ordered in the 
proposed final judgment can and will be made, and that defendants will 
later raise no claim of mistake, hardship or difficulty of compliance 
as grounds for asking this court to modify any of the provisions 
contained therein.

V. Hold Separate Provisions

    Until the divestitures required by the final judgment have been 
accomplished:
    (A) Defendants shall preserve and maintain the value and goodwill 
of the divestiture assets. Defendants shall not, except as part of a 
divestiture approved by the United States, after consultation with the 
State Attorneys General, in accordance with the terms of the proposed 
final judgment, remove, sell, lease or sublease, assign, transfer, 
pledge or otherwise dispose of any of the divestiture assets.
    (B) Defendants shall maintain, in accordance with sound accounting 
principles, separate, accurate and complete financial ledgers, books 
and records that report on a periodic basis, such as the last business 
day of every month, consistent with past practices, the assets, 
liabilities, expenses, revenues and income, if any, of the Divestiture 
Assets.

Cleveland Free Times Assets

    (C) With respect to the books, records, sales, marketing, 
promotions, customer and pricing information as part of the Cleveland 
Free Times Assets in its possession, custody or control, New Times 
shall hold them entirely separate, distinct and apart from those of New 
Times's other operations. Until such time that the Cleveland Free Times 
Assets are divested, the Cleveland Free Times Assets in New Time's 
possession, custody, or control shall be managed by a person, not 
employed by New Time's alternative newsweekly, the Cleveland Scene (the 
``New Times designated person'').
    (D) The New Times Designated Person shall have complete managerial 
responsibility for the Cleveland Free Times Assets in the possession, 
custody, and control of New Times, subject to the provisions of this 
order, and will be responsible for overseeing New Times's compliance 
with this section.
    (E) In the event that the New Times designated person is unable to 
perform his or her duties, or is not approved by the United States, 
upon consultation with the State Attorneys General, New Times shall 
appoint, subject to the approval of the United States, upon 
consultation with the State Attorneys General, a replacement within 
five calendar days. Should defendant New Times fail to appoint a 
replacement acceptable to the United States, upon consultation with the 
State Attorneys General, within five calendar days, the United States 
shall appoint, upon consultation with the State Attorneys General, a 
replacement.
    (F) Defendant New Times shall take no action that would interfere 
with the ability of the New Times designated person or any later 
appointed persons to oversee the Cleveland Free Times assets in New 
Times's possession, custody or control. The New Times Designated person 
shall not be terminated, transferred or reassigned prior to the 
divestiture of such assets under the final judgment and this hold 
separate stipulation and order.
    (G) Within 10 calendar days after either the filing of the 
complaint or the entry of the hold separate stipulation and order, 
whichever is earlier, New Times shall deliver to the United States and 
State Attorneys General an affidavit that describes in reasonable 
detail: (i) Each Cleveland Free Times asset in its possession, custody, 
or control, (ii) the identity, title, and responsibilities of the New 
Times designated person, and (iii)

[[Page 7135]]

all actions New Times has taken and all steps New Times has implemented 
on an ongoing basis to comply with this hold separate stipulation and 
order.

New Times LA Assets

    (H) With respect to the books, records, sales, marketing, 
promotions, customer and pricing information as part of the New Times 
LA Assets in its possession, custody or control, Village Voice Media 
shall hold them entirely separate, distinct and apart from those of 
Village Voice Media's other operations. Until such time that the New 
Times LA assets are divested, the New Times LA assets shall be managed 
by a person, not employed by Village Voice Media's Alternative 
Newsweekly, the LA Weekly (the ``VVM designated person'').
    (I) The VVM designated person shall have complete managerial 
responsibility for the New Times LA assets in the possession, custody, 
and control of Village Voice Media, subject to the provisions of this 
order, and will be responsible for overseeing Village Voice Media's 
compliance with this section.
    (J) In the event that the VVM designated person is unable to 
perform his or her duties, or is not approved by the United States, 
upon consultation with the State Attorneys General, Village Voice Media 
shall appoint, subject to the approval of the United States, upon 
consultation with the State Attorneys General, a replacement within 
five calendar days. Should Village Voice Media fail to appoint a 
replacement acceptable to the United States, upon consultation with the 
State Attorneys General, within five calendar days, the United States 
shall appoint, upon consultation with the State Attorneys General, a 
replacement.
    (K) Defendant Village Voice Media shall take no action that would 
interfere with the ability of the VVM designated person or any later 
appointed persons to oversee the New Times LA Assets in Village Voice 
Media's possession, custody or control. The VVM designated person shall 
not be terminated, transferred or reassigned prior to the divestiture 
of such assets under the final judgment and this hold separate 
stipulation and order.
    (L) Within 10 calendar days after either the filing of the 
complaint or the entry of the hold separate stipulation and order, 
whichever is earlier, Village Voice Media shall deliver to the United 
States and State Attorneys General an affidavit that describes in 
reasonable detail: (i) Each New Times LA asset in its possession, 
custody, or control, (ii) the identity, title, and responsibilities of 
the VVM designated person, and (iii) all actions Village Voice Media 
has taken and all steps Village Voice Media has implemented on an 
ongoing basis to comply with this hold separate stipulation and order.
    (M) Defendants shall take all steps necessary to ensure that 
preservation of the assets will be conducted by the designated persons 
and not be influenced by New Times or Village Voice Media. Defendants 
shall take all steps necessary to ensure that the divestiture assets 
are fully maintained in operable condition, and shall maintain and 
adhere to normal repair, product improvement and upgrade, and 
maintenance schedules for the divestiture assets.
    (N) Defendants shall use their best efforts to assist, and shall 
take no action to interfere with or to impede, the trustee (if 
applicable) in accomplishing the required divestiture pursuant to the 
final judgment.
    (O) This hold separate stipulation and order shall remain in effect 
until consummation of the divestiture required by the proposed final 
judgment or until further order of this court.

    Dated: January 25, 2003, Washington, DC

    Respectfully submitted,

    For defendant Village Voice Media, LLC:

Melanie Sabo,

(Florida Bar No. 0875287), Preston Gates Ellis & Rouvelas Meeds, LLP 
1735 New York Avenue, NW., Suite 500, Washington, DC 20006-5209, 
(202) 628-1700 (telephone). (202) 331-1024 (facsimile). 
[email protected].

    For defendant NT Media, LLC:

Joseph Kattan, P.C.,

(DC Bar No. 33542), Gibson Dunn & Crutcher, LLP, 1050 Connecticut 
Avenue, NW., Washington, DC 20036, (202) 955-8500 (telephone), (202) 
530-9558 (facsimile), [email protected].

    For plaintiff United States of America:

Maurice E. Stucke,

(New York--no bar number assigned), U.S. Department of Justice, 
Antitrust Division, Litigation III Section, 325 7th Street, NW., 
Suite 300, Washington DC 20530, (202) 305-1489 (telephone), (202) 
514-7308 (facsimile). [email protected].

Order

    It is so ordered by this court, this ---- day of --/--/--/--, 
2003.
United States District Judge.

Final Judgment

    Whereas, the United States of America filed its compliant on 
January 27, 2003, alleging that defendants Village Voice Media and New 
Times entered into agreements in violation of section one of the 
Sherman Act, and the plaintiff and defendants, by their respective 
attorneys, have consented to the entry of this final judgment without 
trial or adjudication of any issue of fact or law, and without this 
final judgment constituting any evidence against, or any admission by, 
any party regarding any such issue of fact or law;
    And whereas, Village Voice Media and New Times agree to be bound by 
the provisions of this Final Judgment pending its approval by this 
court;
    And whereas, the essence of this Final Judgment is the prompt and 
certain divestiture of certain rights or assets by Village Voice Media 
and New Times to restore the loss of competition alleged in the 
complaint;
    And whereas, the United States requires Village Voice Media and New 
Times to agree to certain procedures and prohibitions for the purpose 
of restoring the loss of competition alleged in the complaint;
    And whereas, the United States requires Village Voice Media and New 
Times to make certain divestitures for the purpose of remedying the 
loss of competition alleged in the complaint;
    And whereas, Village Voice Media and New Times have represented to 
the United States that the divestitures required below can and will be 
made and that they will later raise no claim of hardship or difficulty 
as grounds for asking the court to modify any of the divestiture 
provisions contained below;
    Now therefore, before any testimony is taken, without trail or 
adjudication of any issue of fact or law, and upon consent of the 
parties, it is ordered, adjudged and decreed:

I. Jurisdiction

    This court has jurisdiction over the subject matter of and each of 
the parties to this action. The compliant states a claim upon which 
relief may be granted against Village Voice Media and New Times under 
section 1 of the Sherman Act, as amended (15 U.S.C. 1).

II. Definitions

    As used in this final judgment:
    (A) ``Acquirer'' or ``acquirers'' means the entity or entities to 
which defendants divest the divestiture assets.
    (B) ``Alternative newsweekly'' means a publication (such as the 
Cleveland Scene or LA Weekly) that possesses more than one of the 
following attributes: (i) It is published in a geographic area served 
by one or more daily newspapers to which residents turn as their 
primary source or sources of printed news; (ii) it is published weekly 
(or less frequently), and at least 24 times annually; (iii) it is 
distributed free of charge; (iv) it is not owned by a daily newspaper 
publishing company; and (v) it is a general interest publication that 
does not focus

[[Page 7136]]

exclusively on one specific topic, such as music, entertainment, 
religion, the environment, or a political party or organization.
    (C) ``California Attorney General'' means the Office of the 
Attorney General of the State of California, who may share information 
and consult with the Office of the Los Angeles County District Attorney 
on any matters arising under this final judgment.
    (D) ``Cleveland Asset Purchase Agreement'' means the Asset Purchase 
Agreement by and among Cleveland Free Times Media, Inc., Cleveland 
Scene, LLC, Village Voice Media, LLC, and NT Media, LLC, dated October 
1, 2002, and any agreements ancillary thereto.
    (E) ``Cleveland Free Times Assets'' means all assets within the 
possession, custody or control of Village Voice Media and New Times 
that were formerly employed in the publication of the Cleveland Free 
Times alternative newsweekly in the Greater Cleveland Area by Village 
Voice Media before October 1, 2002, including, but not limited to:
    (1) All rights to the Cleveland Free Times name (and any 
derivations thereof), logo, layout and design, including all legal 
rights, including intellectual property rights associated with the 
Cleveland Free Times, including trademarks, trade names, service names, 
service marks, designs, trade dress, patents, copyrights and all 
licenses and sublicenses to such intellectual property to the fullest 
extent sublicensable (provided that, with respect to any rights not 
legally transferable, Village Voice Media shall assist, and neither 
impede nor hinder, the acquirer in negotiating with, and obtaining all 
necessary legal rights from, the third party who controls such rights);
    (2) Except for the payroll systems located in New York, New York, 
all computer hardware, software and licensing agreements connected with 
that software to the fullest extent sublicensable (provided that, with 
respect to any rights not legally transferable, Village Voice Media 
shall assist, and neither impede nor hinder, the acquirer in 
negotiating with, and obtaining all necessary legal rights from, the 
third party who controls such rights); and all information relating to 
the Cleveland Free Times stored on the computer hardware, including all 
design templates and databases;
    (3) All office furniture, telephone systems, T-1 lines, fax 
machines, copy machines, stationery, business cards, rate kits, and all 
other supplies and equipment used by the Cleveland Free Times;
    (4) All rights to the Cleveland Free Times website and URL 
(www.freetimes.com);
    (5) All rights to the print and electronic archives of the 
Cleveland Free Times publications and articles on a non-exclusive 
basis;
    (6) All assets used in the publication of the Cleveland Free Times, 
including all distribution racks, street distribution boxes, permits 
and licenses for individual distribution racks and boxes, route sheets, 
and leases or other rights to real property from which Village Voice 
Media published the Cleveland Free Times; and
    (7) All other tangible and intangible assets used in the 
publication of the Cleveland Free Times, including, but not limited to: 
All other leases; all licenses, permits and authorizations issued by 
any governmental organization; all contracts, teaming arrangements, 
agreements, commitments, certifications, and understandings, including 
supply agreements; all customer lists, contracts, accounts, and credit 
records; all agreements with retailers, wholesalers, or any other 
person regarding the sale, promotion, marketing, advertising or 
placement of such products; all graphics and artwork relating to the 
Cleveland Free Times; all other records stored in the offices of, or 
generated by or for, the Cleveland Free Times; all technical 
information, computer software and related documentation, and know-how, 
and information relating to plans for, or improvements to, the 
Cleveland Free Times; all research, packaging, sales, marketing, 
advertising and distribution know-how, information, data, and 
documentation, including marketing and sales data, and layout designs; 
all manuals and technical information Village Voice Media provided to 
any of its Cleveland Free Times employees, customers, suppliers, agents 
or licensees; and all specifications for materials.
    (F) ``Cleveland Scene termination period'' means the period of time 
beginning October 1, 2002, and ending 30 calendar days after 
consummation of the divestiture of the Cleveland Free Times assets.
    (G) ``Divestiture assets'' means the Cleveland Free Times Assets 
and the New Times LA assets.
    (H) ``Greater Cleveland area'' means the counties of Cuyahoga, 
Lake, Geauga, Portage, Summit, Medina and Lorain in the state of Ohio.
    (I) ``Greater Los Angeles area'' means the counties of Los Angeles, 
Orange, San Bernardino, Riverside and Ventura in the state of 
California.
    (J) ``Los Angeles asset purchase agreement'' means the asset 
purchase agreement among LA Weekly Media, Inc., New Times Los Angeles, 
LP, Village Voice Media, LLC, and NT Media, LLC, dated October 1, 2002, 
and any agreements ancillary thereto.
    (K) ``LA Weekly termination period'' means the period of time 
beginning October 1, 2002, and ending 30 calendar days after 
consummation of the divestiture of the New Times LA assets.
    (L) ``New Times'' means Defendant NT Media, LLC, a limited 
liability company organized and existing under the laws of the State of 
Delaware with its headquarters in Phoenix, Arizona, its successors and 
assigns, and its subsidiaries, divisions, groups, affiliates, 
partnerships and joint ventures, including without limitation Cleveland 
Scene, LLC, and New Times Los Angeles, LP, and their directors, 
officers, managers, agents, and employees.
    (M) ``New Times LA Assets'' means all assets within the possession, 
custody or control of New Times and Village Voice Media that were 
formerly employed in the publication of the New Times LA alternative 
newsweekly in the Greater Los Angeles area by New Times before October 
1, 2002, including, but not limited to:
    (1) Subject to the provisions of section V(K), all rights to the 
New Times LA, LA Reader and LA View names (including any derivations 
thereof), logos, layout and design, including all legal rights, 
including intellectual property rights associated with the New Times 
LA, LA Reader and LA View, including trademarks, trade names, service 
names, service marks, designs, trade dress, patents, copyrights and all 
licenses and sublicenses to such intellectual property to the fullest 
extent sublicensable (provided that, with respect to any rights not 
legally transferable, New Times shall assist, and neither impede nor 
hinder, the Acquirer in negotiating with, and obtaining all necessary 
legal rights from, the third party who controls such rights);
    (2) All computer hardware, software, and licensing agreements 
connected with that software to the fullest extent sublicensable, which 
are associated primarily with the publication of the New Times LA, 
including all rights to the New Times LA website and URL 
(www.newtimesla.com); all information relating to the New Times LA 
stored on the computer hardware, including all design templates and 
databases; New Times shall provide in the original

[[Page 7137]]

format to the acquirer (if such format is not readable or usable by 
commercially available software, then New Times shall provide such data 
in such format the acquirer may reasonably specify) all other 
information relating to the publication of New Times LA stored on New 
Times's computer hardware (provided that, with respect to any rights 
not legally transferable, New Times shall assist, and neither impede 
nor hinder, the acquirer in negotiating with, and obtaining all 
necessary legal rights from, the third party who controls such rights);
    (3) All office furniture, telephone systems, T-1 lines, fax 
machines, copy machines, stationery, business cards, rate kits, and all 
other supplies and equipment used by the New Times LA;
    (4) All rights to the print and electronic archives of New Times LA 
publications and articles on a non-exclusive basis;
    (5) All graphics and artworks used in the publication of the New 
Times LA and New Times's other alternative newsweeklies as of October 
1, 2002, on a non-exclusive basis;
    (6) All assets used in the publication of the New Times LA, 
including all distribution racks, street distribution boxes, permits 
and licenses for individual distribution racks and boxes, route sheets, 
and leases or other rights to real property from which New Times 
published the New Times LA; and
    (7) All other tangible and intangible assets used in the 
publication of the New Times LA, including, but not limited to: All 
other leases; all licenses, permits and authorizations issued by any 
governmental organization; all contracts, teaming arrangements, 
agreements, commitments, certifications, and understandings, including 
supply agreements; all customer lists, contracts, accounts, and credit 
records; all agreements with retailers, wholesalers, or any other 
person regarding the sale, promotion, marketing, advertising or 
placement of such products; all graphics and artwork relating 
exclusively to the New Times LA; all other records stored in the 
offices of, or generated by or for, the New Times LA; all technical 
information, computer software and related documentation, and know-how, 
and information relating to plans for, or improvements to, the New 
Times LA; all research, packaging, sales, marketing, advertising, and 
distribution know-how, information, data and documentation, including 
marketing and sales data, and layout designs used exclusively in, or 
which relate exclusively to, the publication of the New Times LA (and 
copies of such know-how, information, data and documentation which 
relates to the publication of the New Times LA); all manuals and 
technical information New Times provided to any of its New Times LA 
employees, customers, suppliers, agents or licensees; and all 
specifications for materials.
    (N) ``Ohio Attorney General'' means the Office of the Attorney 
General of the State of Ohio.
    (O) ``Publication'' means all activities associated with the 
business of offering an alternative newsweekly to the public as a 
commercial endeavor, including, but not limited to, editing, writing, 
printing, circulating, operating, marketing, and distributing such 
alternative newsweeklies, and selling advertisements and promotions 
therein.
    (P) ``State Attorneys General'' means the California Attorney 
General and the Ohio Attorney General.
    (Q) ``Village Voice Media'' means defendant Village Voice Media, 
LLC, a limited liability company organized and existing under the laws 
of the State of Delaware with its headquarters in New York, New York, 
its successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnerships and joint ventures, including without 
limitation LA Weekly Media, Inc. and Cleveland Free Times Media, Inc., 
and their directors, officers, managers, agents, and employees.
    (R) The terms ``and'' and ``or'' have both conjunctive and 
disjunctive meanings.

III. Applicability

    (A) This final judgment applies to Village Voice Media and New 
Times, as defined above, and all other persons in active concert or 
participation with any of them who receive actual notice of this Final 
Judgment by personal service or otherwise.
    (B) Defendants shall require, as a condition of the sale or other 
disposition of all or substantially all of their assets or of lesser 
business units that include any of the divestiture assets that the 
purchaser agrees to be bound by the provisions of this final judgment, 
provided, however, that Village Voice Media and New Times need not 
obtain such an agreement from the acquirer(s).

IV. Prohibited and Required Conduct

    (A) Village Voice Media and New Times are enjoined as of the filing 
of the Complaint in this matter from taking any actions in furtherance 
of, or required under, either the Cleveland asset purchase agreement or 
the Los Angeles asset purchase agreement. Village Voice Media's and New 
Times's obligation under this final judgment supercede their 
obligations under either of these agreements, and Village Voice Media 
and New Times shall not object to the performance of their obligations 
under this final judgment on the grounds that those obligations would 
cause them to breach either agreement.
    (B) For a period of two years commencing upon the filing date of 
the complaint in this matter, Village Voice Media shall permit any 
advertiser that entered during the LA Weekly termination period into a 
written or oral contract to advertise in, or engage in a promotion 
with, the LA Weekly, solely at the advertiser's option, to terminate 
such contract without penalty, retaliatory action, or threat of 
retaliatory action. Village Voice Media shall provide all affected 
advertisers a copy of this final judgment within 15 calendar days after 
the filing of the complaint in this matter, and inform in writing all 
affected advertisers within: (i) Fifteen calendar days after the filing 
of the complaint in this matter; and (ii) thirty calendar days after 
consummation of the divestiture of the New Times LA assets, of their 
rights to terminate at their option their advertising or promotion 
contracts with the LA Weekly.
    (C) For a period of two years commencing upon the filing date of 
the complaint in this matter, New Times shall permit any advertiser 
that entered during the Cleveland Scene termination period into a 
written or oral contract to advertise in, or engage in a promotion 
with, the Cleveland Scene, solely at the advertiser's option, to 
terminate such contract without penalty, retaliatory action, or threat 
of retaliatory action. New Times shall provide all affected advertisers 
a copy of this final judgment within 15 calendar days after the filing 
of the complaint in this matter, and inform in writing all affected 
advertisers within: (i) Fifteen calendar days after the filing of the 
complaint in this matter; and (ii) 30 calendar days after consummation 
of the divestiture of the Cleveland Free Times assets, of their right 
to terminate at their option their advertising or promotion contracts 
with the Cleveland Scene.
    (D) Each defendant, its officers, directors, agents, and employees, 
acting or claiming to act on its behalf, and successors and all other 
persons action or claiming to act on its behalf, are enjoined and 
restrained from, in any matter, directly or indirectly, entering into, 
continuing, maintaining, or renewing any market or customer allocation 
agreement, or from engaging in any other combination, conspiracy, 
contract, agreement, understanding or concert of action having a 
similar purpose or effect, and from adopting or

[[Page 7138]]

following any practice, plan, program, or device having a similar 
purpose or effect.
    (E) Unless such transaction is otherwise subject to the reporting 
and waiting period requirements of the Hart-Scott-Rodino Antitrust 
Improvements Act of 1976, as amended, 15 U.S.C. 18a (the ``HSR Act''), 
defendants for a period of five years commencing upon the filing of the 
complaint in this matter, and without providing advance notification to 
the Antitrust Division of the United States Department of Justice, 
shall not directly or indirectly enter into any merger or joint venture 
involving, or sale of, any of its alternative newsweeklies or national 
advertising networks or acquire any assets of or any interest, 
including any financial, security, loan, equity or management interest, 
in any publication that possesses more than two of the five attributes 
specified in the definition of ``alternative newsweekly'' in section 
II(B) and this final judgment, one of which must be the attribute 
specified in section II(B)(v). Such notification shall be provided to 
the Antitrust Division in the same format as, and per the instructions 
relating to, the notification and report form set forth in the Appendix 
to part 803 of title 16 of the Code of Federal Regulations as amended, 
except that the information requested in items 5 through 8 of the 
instructions must be provided only about alternative newsweeklies. 
Notification shall be provided at least 30 calendar days prior to 
acquiring any such interest, and shall include, beyond what may be 
required by the applicable instructions, the names of the principal 
representatives of the parties to the agreement who negotiated the 
agreement, and any management or strategic plans discussing the 
proposed transaction. If within the 30-day period after notification, 
representatives of the Antitrust Division make a written request for 
additional information, defendants shall not consummate the proposed 
transaction or agreement until 20 calendar days after submitting all 
such additional information. Early termination of the waiting periods 
in this paragraph may be requested and, where appropriate, granted in 
the same manner as is applicable under the requirements and provisions 
of the HSR Act and rules promulgated thereunder. This section shall be 
broadly construed and any ambiguity or uncertainty regarding the filing 
of notice under this section shall be resolved in favor of filing 
notice.
    (F) For any employee involved in the publication of the Cleveland 
Free Times as of October 1, 2002, any non-compete provision imposed by 
Village Voice Media shall be null and void. For a period from the 
filing of the complaint to one year from the divestiture of the 
Cleveland Free Times assets, defendants shall not enforce any other 
non-compete contractual provisions against any of their former or 
current employees of the Cleveland Free Times or the Cleveland Scene in 
the Greater Cleveland area. Defendants shall notify in writing all 
affected former and current employees that such non-compete contractual 
provisions will not be enforced.
    (G) For any employee involved in the publication of the New Times 
LA as of October 1, 2002, any non-compete provision imposed by New 
Times shall be null and void. For a period from the fling of the 
complaint to one year from the divestiture of the New Times LA assets, 
defendants shall not enforce any other non-compete contractual 
provisions against any of their former or current employees of the New 
Times LA or LA Weekly in the Greater Los Angles area. Defendants shall 
notify in writing all affected former and current employees that such 
non-compete contractual provisions will not be enforced.

V. Divestitures

    (A) Defendants are ordered and directed, within 30 calendar days 
after the filing of the complaint in this matter, to divest the 
divestiture assets in a manner consistent with this final judgment to 
an acquirer or acquirers acceptable to the United States in its sole 
discretion, after consultation with the State Attorneys General. The 
United States, in its sole discretion, after consultation with the 
State Attorneys General, may agree to an extension of this time period 
for any divestiture of up to 30 additional calendar days, and shall 
notify this court in such circumstances.
    (B) Defendants agree to use their best efforts to divest the 
divestiture assets in a manner consistent with this final judgment to 
an acquirer or acquirers acceptable to the United States in its sole 
discretion, after consultation with the State Attorneys General, and to 
effect such divestitures as expeditiously as possible.
    (C) In accomplishing the divestitures ordered by this final 
judgment, each defendant promptly shall make known, by usual and 
customary means, the availability of the divestiture assets under it 
possession, custody or control. Defendants shall inform any person 
making inquiry regarding a possible purchase of the divestiture assets 
that such assets are being divested pursuant to this final judgment and 
provide that person with a copy of this final judgment. Defendants 
shall offer to furnish to all prospective acquirers, subject to 
customary confidentiality assurances, all information and documents 
relating to the divestiture assets customarily provided in a due 
diligence process except such information or documents subject to the 
attorney-client privilege or attorney work-product doctrine. Defendants 
shall make available such information to the United States and the 
State Attorneys General at the same time that such information is made 
available to any other person.
    (D) Village Voice Media shall provide the acquirers, the United 
States, and the State Attorneys General information relating to the 
personnel that were involved in any way in the publication of the 
Cleveland Free Times to enable the acquirer to make offers of 
employment. Defendants will not interfere with any negotiations by the 
acquirer(s) to employ any current or former Village Voice Media 
employee that was involved in the publication of the Cleveland Free 
Times.
    (E) New Times shall provide the acquirers, the United States, and 
the State Attorneys General information relating to the personnel that 
were involved in any way in the publication of the New Times LA to 
enable the acquirer to make offers of employment. Defendants will not 
interfere with any negotiations by the acquirer(s) to employ any 
current or former New Times employee that was involved in the 
publication of the New Times LA.
    (F) Defendants shall permit prospective acquirers of the 
divestiture assets to have reasonable access to personnel and to make 
inspections of the physical facilities of the divestiture assets. To 
the extent that defendants continue to maintain any environmental, 
zoning or other permits pertaining to the publication of the Cleveland 
Free Times or the New Times LA, defendants shall permit prospective 
acquirers access to any and all documents and information associated 
with those permits. Defendants shall permit prospective acquirers of 
the divestiture assets to have access to any and all financial, 
operational, or other documents and information customarily provided as 
part of a due diligence process.
    (G) Defendants shall warrant to the acquirer(s) of the divestiture 
assets that each asset will be operational on the date of sale.
    (H) Defendants shall not take any action that will impede in any 
way the permitting, operation, or divestiture of

[[Page 7139]]

the Cleveland Free Times assets or the New Times LA assets.
    (I) To the extent that Defendants continue to maintain any 
environmental, zoning or other permits pertaining to the publication of 
the Cleveland Free Times or the New Times LA Defendants shall warrant 
to the Acquirer(s) that there are no material defects in those permits. 
Following the sale of the Cleveland Free Times and/or the New Times LA 
Assets, defendants will not undertake, directly or indirectly, any 
challenges to the environmental, zoning, or other permits relating to 
the publication of the Cleveland Free Times and/or the New Times LA.
    (J) Unless the United States, in its sole discretion, after 
consultation with the State Attorneys General, otherwise consents in 
writing, the divestiture pursuant to section V, or by trustee appointed 
pursuant to section VI, or this final judgment, shall include the 
Divestiture assets, and shall be accomplished in such a way as to 
satisfy the United States, in its sole discretion, after consultation 
with the State Attorneys General, that the Cleveland Free Times or the 
New Times LA can and will be published by the acquirer(s) as viable, 
ongoing alternative newsweeklies. Divestiture of the divestiture assets 
may be made to one acquirer or to two acquirers, provided that (1) all 
the Cleveland Free Times assets are sold to one acquirer, (2) all the 
New Times LA assets are sold to one acquirer, and (3) in each instance 
it is demonstrated to the sole satisfaction of the United States, after 
consultation with the State Attorneys General, that the Cleveland Free 
Times assets and the New Times LA assets will remain viable and that 
the divestiture of the divestiture assets will remedy the competitive 
harm alleged in the complaint. The divestitures, whether pursuant to 
section V or section VI of this final judgment,

    (1) Shall be made to an acquirer (or acquirers) that, in the 
United States's sole judgment, after consultation with the State 
Attorneys General, has the intent and capability (including the 
necessary managerial, operational, technical and financial 
capability) of competing effectively in the publication of 
alternative newsweeklies; and
    (2) Shall be accomplished so as to satisfy the United States, in 
its sole discretion, after consultation with the State Attorneys 
General, that none of the terms of any agreement between an acquirer 
(or acquirers) and defendants give defendants the ability 
unreasonably to raise the acquirer's costs, to lower the acquirer's 
efficiency, or otherwise to interfere in the ability of the acquirer 
to compete effectively.

    (K) With respect to copyrights or trademarks associated 
specifically with the New Times LA that New Times employs in the 
publication of other New Times Alternative Newsweeklies, the 
divestiture pursuant to section V, or by a trustee appointed pursuant 
to section VI, of this Final Judgment shall be accomplished by means of 
an exclusive, perpetual, royalty-free, assignable license to those 
copyrights or trademarks for use by the acquirer and its successors in 
connection with publishing an alternative newsweekly in the Greater Los 
Angeles area. New Times is enjoined from using, or granting rights to 
persons other than the acquirer or its successors to use, such 
copyrights or trademarks in the publication of an alternative 
newsweekly in the Greater Los Angeles area. New Times, consistent with 
the purpose and intent of this final judgment, may include, as part of 
the license for any valid registered trademark used specifically with 
New Times's other alternative newsweeklies and New Times LA, the 
requirement on the acquirer and its successors to take the minimum 
reasonable measures necessary to prevent New Times from being deemed to 
have abandoned such shared registered trademarks under the Lanham Act.

VI. Appointment of Trustee

    (A) If defendants have not divested the Cleveland Free Times assets 
within the time period specified in section V(A), they shall notify the 
United States and the State Attorneys General of that fact in writing. 
Upon application of the United States, the court shall appoint a 
trustee selected by the United States in its sole discretion and 
approved by this court to effect the divestiture of the Cleveland Free 
Times assets.
    (B) If defendants have not divested the New Times LA assets within 
the time period specified in section V(A), they shall notify the United 
States and the State Attorneys General of that fact in writing. Upon 
application of the United States, the court shall appoint a trustee 
selected by the United States in its sole discretion and approved by 
this court to effect the divestiture of the New Times LA assets.
    (C) After the appointment of a trustee becomes effective, only the 
trustee shall have the right to sell the divestiture assets. The 
trustee shall have the power and authority to accomplish the 
divestiture to an acquirer(s) acceptable to the United States, after 
consultation with the State Attorneys General, at such price and on 
such terms as are then obtainable upon reasonable effort by the 
trustee, subject to the provisions of sections V, VI, and VII of this 
final judgment, and shall have such other powers as this court deems 
appropriate. Subject to section VI(E) of this final judgment, the 
trustee may hire at the cost and expense of the defendant whose 
divestiture assets the trustee is to divest any investment bankers, 
attorneys, or other agents, who shall be solely accountable to the 
trustee, reasonably necessary in the trustee's judgment to assist in 
the divestiture.
    (D) Defendants shall not object to a sale by the trustee on any 
ground other than the trustee's malfeasance. Any such objections by 
defendants must be conveyed in writing to the United States, the State 
Attorneys General and the trustee within five calendar days after the 
trustee has provided the notice required under section VII of this 
final judgment.
    (E) The trustee shall serve at the cost and expense of the 
defendant whose divestiture assets the trustee is to divest, on such 
terms and conditions as the United States approves, after consultation 
with the State Attorneys General, and shall account for all monies 
derived from the sale of the assets sold by the trustee and all costs 
and expenses so incurred. After approval by this court of the trustee's 
accounting, including fees for its services and those of any 
professionals and agents retained by the trustee, all remaining money 
shall be paid to the defendant whose divestiture assets the trustee 
divested and the trust shall then be terminated. The compensation of 
the trustee and any professionals and agents retained by the trustee 
shall be reasonable in light of the value of the divestiture assets and 
based on a fee arrangement providing the trustee with an incentive 
based on the price and terms of the divestiture and the speed with 
which it is accomplished, but timeliness is paramount.
    (F) Defendants shall use their best efforts to assist the trustee 
in accomplishing the required divestiture. The trustee and any 
consultants, accountants, attorneys, and other persons retained by the 
trustee shall have full and complete access to the defendants' 
personnel, books, records, and facilities, and defendants shall develop 
financial and other information relevant to such businesses as the 
trustee may reasonably request, subject to reasonable protection for 
trade secrets or other confidential research, development, or 
commercial information. Defendants shall take no action to interfere 
with or to impede the trustee's accomplishment of the divestiture.

[[Page 7140]]

    (G) After its appointment, the trustee shall file monthly reports 
with the United States, the State Attorneys General and the court 
setting forth the trustee's efforts to accomplish the divestiture 
ordered under this final judgment. To the extent such reports contain 
information that the trustee deems confidential, such reports shall not 
be filed in the public docket of this court. Such reports shall include 
the name, address, and telephone number of each person who, during the 
preceding month, made an offer to acquire, expressed an interest in 
acquiring, entered into negotiations to acquire, or was contacted or 
made an inquiry about acquiring, any interest in the divestiture assets 
the trustee is to divest, and shall describe in detail each contact 
with any such person. The trustee shall maintain full records of all 
efforts made to divest the divestiture assets.
    (H) If the trustee has not accomplished such divestiture within 
three months after its appointment, the trustee shall promptly file 
with this court a report setting forth: (1) The trustee's efforts to 
accomplish the required divestiture, (2) the reasons, in the trustee's 
judgment, why the required divestiture has not been accomplished, and 
(3) the trustee's recommendations. To the extent such reports contain 
information that the trustee deems confidential, such reports shall not 
be filed in the public docket of this court. The trustee shall at the 
same time furnish such report to the United States and the State 
Attorneys General who shall have the right to make additional 
recommendations consistent with the purpose of the final judgment. The 
court thereafter shall enter such orders as it shall deem appropriate 
to carry out the purpose of the final judgment, which may, if 
necessary, include extending the trust and the terms of the trustee's 
appointment by a period request by the United States.

VII. Noticke of Proposed Divestiture

    (A) Within two business days following execution of a definitive 
divestiture agreement. Village Voice Media, New Times, or the trustee, 
whichever effected the divestiture, shall notify the United States and 
the State Attorneys General of any proposed divestiture required by 
section V or VI of this final judgment. If the trustee is responsible, 
it shall similarly notify the defendant whose divestiture assets the 
trustee divested. The notice shall set forth the details of the 
proposed divestiture and list the name, address, and telephone number 
of each person not previously identified who offered or expressed an 
interest in or desire to acquire any ownership interest in the 
divestiture assets, together with full details of the same.
    (B) Within five calendar days of receipt by the United States and 
the State Attorneys General of such notice, the United States, after 
consultation with the State Attorneys General, may request from 
defendants, the proposed acquirer or acquirers, any other third party, 
or the trustee (if applicable) additional information concerning the 
proposed divestiture, the proposed acquirer or acquirers, and any other 
potential acquirer. Defendants and the trustee shall furnish any 
additional information requested within five calendar days of the 
receipt of the request, unless the parties shall otherwise agree.
    (C) Within fifteen calendar days after receipt of the notice or 
within five calendar days after the United States and the State 
Attorneys General have been provided the additional information 
requested from defendants, the proposed acquirer or acquirers, any 
third party, and the trustee (if applicable), whichever is later, the 
United States, after consultation with the State Attorneys General, 
shall provide written notice to the defendant whose divestiture assets 
are at issue, and the trustee (if applicable), stating whether or not 
it objects to the proposed divestiture. If the United States provides 
written notice that it does not object, the divestiture may be 
consummated, subject only to defendants' limited right to object to the 
sale under section VI(D) of this final judgment. Absent written notice 
that the United States does not object to the proposed acquirer or upon 
objection by the United States, a divestiture proposed under section V 
or section VI shall not be consummated. Upon objection by either 
defendant under section VI(D), a divestiture proposed under section VI 
shall not be consummated unless approved by this court.

VIII. Financing

    Defendants shall not finance all or any part of any purchase made 
pursuant to section V or VI of this final judgment.

IX. Affidavits

    (A) Within fifteen calendar days of the filing of the complaint in 
this matter, and every thirty calendar days thereafter until the 
divestiture(s) has been completed under section V or VI, defendants 
each shall deliver to the United States and the State Attorneys General 
an affidavit as to the fact and manner of its compliance with section V 
or VI of this final judgment. Each such affidavit shall include the 
name, address, and telephone number of each person who, during the 
preceding thirty days, made an offer to acquire, expressed an interest 
in acquiring, entered into negotiations to acquire, or was contacted or 
made an inquiry about acquiring, any interest in the divestiture 
assets, and shall describe in detail each contact with any such person 
during that period. Each such affidavit shall also include a 
description of the efforts defendants have taken to solicit buyers for 
the divestiture assets, and to provide required information to 
prospective purchasers, including the limitations, if any, on such 
information. Assuming the information set forth in the affidavit is 
true and complete, any objective by the United States, after 
consultation with the State Attorneys General, to information provided 
by defendants, including limitation on information, shall be made 
within five calendar days of receipt of such affidavit.
    (B) Defendants shall keep all records of all efforts made to 
preserve and divest the divestiture assets until one year after such 
divestiture has been completed.

X. Compliance Inspection

    (A) For the purposes of determining or securing compliance with 
this final judgment, or of determining whether the final judgment 
should be modified or vacated, and subject to any legally recognized 
privilege, from time to time duly authorized representatives of the 
United States Department of Justice or the State Attorneys General, 
including consultants and other persons retained or designated thereby, 
shall, upon written request of a duly authorized representative of the 
Assistant Attorney General in charge of the Antitrust Division, or duly 
authorized representatives of the State Attorneys General, and on 
reasonable notice to defendants, be permitted:
    (1) Access during defendants' office hours to inspect and copy, or 
at the United States' or State Attorneys General's option, to require 
defendants to provide copies of, all books, ledgers, accounts, records 
and documents in their possession, custody, or control relating to any 
matters contained in this final judgment; and
    (2) To interview, either informally or on the record, defendants' 
officers, employees, or agents, who may have their individual counsel 
present, regarding such matters. The interviews shall be subject to the 
reasonable convenience of the interviewee and without restraint or 
interference by defendants.
    (B) Upon the written request of a duly authorized representative of 
the Assistant Attorney General in charge of

[[Page 7141]]

the Antitrust Division, or upon written request of duly authorized 
representatives of the State Attorneys General, defendants shall submit 
written reports, under oath if requested, relating to any of the 
matters contained in this final judgment as may be requested.
    (C) No information or documents obtained by the means provided in 
this section shall be divulged by plaintiffs to any person other than 
an authorized representative of the executive branch of the United 
States, or of the State Attorneys General, except in the course of 
legal proceedings to which the United States or State Attorneys General 
is a party (including grand jury proceedings), or for the purpose of 
securing compliance with this final judgment, or as otherwise required 
by law.
    (D) If at the time defendants furnish information or documents to 
the United States, they represent and identify in writing the material 
in any such information or documents to which a claim of protection may 
be asserted under Rule 26(c)(7) of the Federal Rules of Civil 
Procedure, and mark each pertinent page fo such material, ``Subject to 
claim of protection under Rule 26(c)(7) of the Federal Rules of Civil 
Procedure,'' then the United States shall give defendants ten calendar 
days notice prior to divulging such material in any legal proceeding 
(other than a grand jury proceeding).

XI. No Reacquisition

    Defendants may not reacquire any part of the divestiture assets 
during the term of this final judgment.

XII. Retention of Jurisdiction

    This Court retains jurisdiction to enable any party to this final 
judgment to apply to this court at any time for further orders and 
directions as may be necessary or appropriate to carry out or construe 
this final judgment, to modify any of its provisions, to enforce 
compliance, and to punish violations of its provisions.

XIII. Expiration of Final Judgment

    Unless this court grants an extension, this final judgment shall 
expire ten years from the date of its entry.

XIV. Notice

    For purposes of this final judgment, any notice or other 
communication shall be given to the persons at the addresses set forth 
below (or such other addresses as the United States or State Attorneys 
General may specify in writing to New Times or Village Voice Media):
    For the United States: James R. Wade, Chief, Litigation III 
Section, U.S. Department of Justice, Antitrust Division, 325 Seventh 
Street, NW., Suite 300, Washington, DC 20530.
    For the Ohio Attorney General: Alan C. Witten, Antitrust Section, 
Ohio Attorney General's Office, 140 East Town Street, 12th Floor, 
Columbus, Ohio 43215.
    For the California Attorney General: Winston H. Chen, Deputy 
Attorney General, Office of the California Attorney General, 300 South 
Spring Street, Los Angeles, California 90013.

XV. Public Interest Determination

    Entry of this final judgment is in the public interest.

Dated:-----------------------------------------------------------------

    Court approval subject to procedures of Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16.

United States District Judge.

Competitive Impact Statement

    The United States, pursuant to section 2(b) of the Antitrust 
Procedures and Penalties Act (``APPA''), 15 U.S.C. 16(b), files this 
competitive impact statement relating to the proposed final judgment 
submitted for entry in this civil antitrust proceeding.
    On January 27, 2003, the United States filed a civil antitrust 
complaint pursuant to section 4 of the Sherman Act, as amended, 15 
U.S.C. 4, against defendants Village Voice Media, LLC, (``Village Voice 
Media'') and NT Media, LLC, (``New Times''), the nation's two largest 
chains of alternative newsweeklies. The compliant alleges that 
defendants entered into and engaged in a combination and conspiracy to 
suppress and eliminate advertising and editorial competition by 
allocating the markets for advertising in, and readers of, alternative 
newsweeklies in Cleveland, Ohio and Los Angeles, California. 
Defendants' market allocation agreement, as the complaint further 
alleges, is an unreasonable restraint of interstate trade that is per 
se illegal under section 1 of the Sherman Act, 15 U.S.C. 1.
    The compliant seeks an order to terminate defendants' illegal 
agreement, to enjoin future conduct in furtherance of any such 
agreement, and to obtain such other equitable relief necessary to 
restore competition for the benefit of advertisers and readers in 
Cleveland and Los Angeles.
    The United States filed simultaneously with the complaint a 
proposed final judgment and a hold separate stipulation and order, 
which constitute the parties' settlement.
    This proposed final judgment, as explained more fully below, (i) 
enjoins Village Voice Media and New Times from taking any actions in 
furtherance of, or required under, their per se illegal market 
allocation agreement; (ii) requires defendants to divest all the assets 
used in connection with the publication of the New Times Los Angeles 
(``New Times LA''), New Times's alternative newsweekly in Los Angeles, 
and the Cleveland Free Times, Village Voice Media's alternative 
newsweekly in Cleveland, for the purpose of establishing a viable 
competitive alternative newsweekly in both geographic markets; (iii) 
permits any advertiser that entered into an advertising or promotion 
contract after October 1, 2002, with Village Voice Media's alternative 
newsweekly, the LA Weekly, or New Time's alternative newsweekly, the 
Cleveland Scene, for a specified time and solely at the advertiser's 
option, to terminate such contract without penalty or threat of 
retaliatory action; (iv) requires Village Voice Media and New Times to 
notify the United States for the next five years of any future 
acquisitions or sales of alternative newsweeklies; (v) prevents both 
defendants from enforcing any non-compete contractual provisions 
against any current or former employees involved in their Cleveland or 
Los Angeles alternative newsweeklies; and (vi) prevents each defendant 
and its officers, directors, agents, and employees, from entering into, 
continuing, maintaining, or renewing any market or customer allocation 
agreement.
    The hold separate stipulation and order, which were filed with this 
Court on January 27, 2003, and the proposed final judgment require New 
Times and Village Voice Media to maintain and preserve the assets to be 
divested under the proposed final judgment to ensure that the assets 
remain economically viable until divested.
    The United States, New Times, and Village Voice Media have 
stipulated that the proposed final judgment may be entered after 
compliance with the APPA, unless the United States withdraws its 
consent. Entry of the proposed final judgment would terminate this 
action, except that this court would retain jurisdiction to construe, 
modify, and enforce the proposed final judgment and to punish 
violations thereof.

[[Page 7142]]

1. Description of the Events Giving Rise to the Alleged Violation of 
the Antitrust Laws

A. Defendants

1. Village Voice Media
    Village Voice Media, LLC, is a limited liability company organized 
and existing under the laws of the State of Delaware, with its 
principal place of business in New York, New York. Prior to its 
agreement with New Times to shut down its Cleveland Free Times 
alternative newsweekly, Village Voice Media owned alternative 
newsweeklies in New York City, Minneapolis-St. Paul, Cleveland, 
Seattle, Nashville, Orange County, and Los Angeles. Village Voice 
Media's revenues in 2001 were approximately $92 million.
    Village Voice Media's Cleveland Free Times, launched in 1992, grew 
to become Ohio's largest alternative newsweekly, with an average weekly 
circulation that tripled in recent years to over 80,000. With a decade 
of covering news, arts, and music in Northeast Ohio, the Cleveland Free 
Times was popular with local retailers, concert promoters, clubs, and 
national advertisers, who sought to reach the weekly's demographic of 
active, young adults. Until its sudden closing on October 2, 2002, it 
directly competed against New Times's alternative newsweekly, the 
Cleveland Scene.
    Village Voice Media's LA Weekly was launched in 1978 with the 
mission, according to Village Voice Media, to cover political, 
cultural, and social issues often overlooked by the mainstream daily 
newspaper, and provide readers with each week's most comprehensive 
events listing. With a weekly circulation of approximately 215,000 and 
an average 200 pages per issue, Village Voice Media's LA Weekly has the 
highest page count of any alternative newsweekly in the United States. 
Until October 3, 2002, its direct competitor was New Times's 
alternative newsweekly, the New Times LA.
2. New Times
    NT Media, LLC, is a limited liability company organized and 
existing under the laws of the State of Delaware, with its principal 
place of business in Phoenix, Arizona. Prior to its agreement with 
Village Voice Media to shut down its New Times LA alternative 
newsweekly, New Times published 12 award-winning alternative 
newsweeklies (nine of which New Times had acquired since 1991) in 
Phoenix, Cleveland, Los Angeles, San Francisco, Oakland-Berkeley, 
Broward-Palm Beach, Miami, Denver, St. Louis, Kansas City, Dallas, and 
Houston. New Times's revenues in 2001 were approximately $104 million.
    New Times in the summer of 1996 purchased two established 
alternative newsweekies, the LA Reader and LA View, for approximately 
$4 million, and consolidated and renamed them the New Times LA. To 
better compete against the LA Weekly, New Times grew its newsweekly's 
circulation to approximately 120,000 copies, aggressively discounted 
its advertising rates, and offered award-winning journalism.
    In August 1998, New Times acquired the Cleveland Scene, a local 
music publication established in 1970. New Times repositioned and 
reformatted the Cleveland Scene to compete directly and aggressively 
against Cleveland's other alternative newsweekly, Village Voice Media's 
Cleveland Free Times.

B. The Alternative Newsweekly Industry

    As the name suggests, alternative newsweeklies provide an 
alternative perspective to the established news-gathering 
organizations. In 1955, Village Voice Media's predecessors launched the 
first alternative newsweekly, The Village Voice, in New York City. 
Since then, the popularity of alternative newsweeklies has increased 
dramatically, fueled by the typically ``anti-establishment'' 
perspective of these publications which emerged during the 1960's and 
1970's. Today over 125 alternative newsweeklies are published 
throughout the United States. Their popularity with readers continues 
to be driven largely by a unique editorial mix of politics, 
investigative reporting, and entertainment issues, often presented with 
a somewhat controversial or highly opinionated slant, and all of which 
is focused on decidedly local issues.
    The local nature of these alternative newsweeklies, with their in-
depth coverage of local happenings in the arts, music, politics, and 
entertainment fields, makes them particularly attractive to advertisers 
hoping to reach a young, educated, and urban audience in a cost-
effective manner. Between 1990 and 2000, the collective weekly 
circulation of alternative newsweeklies has more than doubled to 7.8 
million. Likewise, advertising expenditures in alternative newsweeklies 
have jumped, exceeding $500 million in the United States in 2000.
    Two major chains dominate the alternative newsweekly industry: 
defendants New Times and Village Voice Media. New Times, the leading 
chain, distributes each week over 1.1 million copies of its various 
alternative newsweeklies. Village Voice Media operates on a similar 
scale, with a weekly circulation of over 800,000 for its alternative 
newsweeklies.

C. The Competition Between Village Voice Media and New Times

    Prior to the defendants' per se illegal market allocation 
agreement, the only two geographic markets in which defendants competed 
head-to-head for readers and advertisers were Cleveland, Ohio and Los 
Angeles, California. This competition between the defendants' 
alternative newsweeklies provided both readers and advertisers with 
better editorial coverage, heavily discounted advertising rates, and 
higher quality service.
    In Cleveland, New Times's alternative newsweekly, the Cleveland 
Scene, fought against the newly matched Village Voice Media's 
newsweekly, the Cleveland Free Times. From 1998 (when New Times 
purchased the Cleveland Scene) until October 2, 2002, the competition 
between the Cleveland Scene and the Cleveland Free Times was fierce. It 
resulted in steep discounts off the defendants' published advertising 
rate cards, better customer service, increased promotions, and a host 
of value-added services offered at little cost to the advertiser, such 
as ``buy one ad get one free'' deals, larger ads for the same price, or 
free upgrades of ads from black and white to color.
    After New Times reformatted the Cleveland Scene to compete directly 
and aggressively against the Cleveland Free Times, the editorial 
competition between the defendants' alternative newsweeklies was 
similarly intense. The Cleveland Scene and the Cleveland Free Times 
responded to the other's editorial changes and improvements by 
introducing new or better features or increasing investigative 
journalism to recapture the readers' attention to its publication, both 
of which were distributed each Wednesday throughout Cleveland.
    Likewise, from 1996 until October 3, 2002, advertisers benefitted 
from the competition between New Times LA and Village Voice Media's LA 
Weekly with lower advertising rates, better advertisement placement and 
improved service. Even if they did not advertise in the New Times LA, 
advertisers could leverage that alternative newsweekly in their 
negotiations with the older, entrenched LA Weekly. Moreover, the New 
Times LA discounted significantly off of its published rate cards--
which benefitted smaller advertisers that could not afford the LA 
Weekly's higher advertising rates.

[[Page 7143]]

    Both the LA Weekly and New Times LA, which were distributed each 
Thursday throughout Los Angeles, aggressively competed for readers. The 
different, and at times opposing, views and positions of the 
defendants' competing alternative newsweeklies provided readers with 
alternative viewpoints of important local events affecting social, 
political, esthetic, and moral issues. Since 1997, the New Times LA 
garnered numerous journalism awards--including over 30 awards from the 
Greater Los Angeles Press Club--for its investigative and news 
reporting.

D. The Illegal Market Allocation Agreement

    In July 2002, New Times proposed to Village Voice Media to end 
their competitive war by agreeing to ``swap'' markets: New Times would 
close its New Times LA publication, making Village Voice Media's LA 
Weekly, in the words of Defendants' executives, the ``only alternative 
weekly in LA.'' Likewise, Village Voice Media would close its Cleveland 
Free Times, leaving New Times's Cleveland Scene ``the only alternative 
weekly in Cleveland.'' By August 12, 2002, Defendants agreed in 
principle to swap markets. Over the next two months, New Times's and 
Village Voice Media's senior executives and attorneys negotiated the 
terms of their contracts to effectuate their proposed market swap. As 
part of this agreement, Village Voice Media would compensate New Times 
for withdrawing from the larger Los Angeles market by paying New Times 
$9 million in cash. The proposed deal ended all competition between 
defendants, and created an opportunity for the remaining alternative 
newsweekly in each market to raise advertising rates.
    On October 1, 2002, Village Voice Media's and New Times's senior 
executives signed two written contracts, each expressly contingent on 
the other, which sealed their per se illegal market allocation 
arrangement. Village Voice Media paid New Times a net amount of $9 
million in cash at closing ($11 million to New Times less $2 million 
paid to Village Voice Media). The defendants' written contracts did not 
involve the transfer or integration of any meaningful economic assets 
associated with those shuttered papers. New Times shifted the New Times 
LA's accounts receivable, customer lists, and advertising contracts to 
Village Voice Media, who, in exchange, shifted the Cleveland Free 
Times's accounts receivable, customer lists, advertising contracts, and 
street boxes to New Times. These advertisers were already well known to 
defendants because each defendant had attempted in the past to sign up 
the other's advertisers. Moreover, the net assets (primarily the 
accounts receivable) actually transferred in Los Angeles accounted, 
according to the defendants' calculations, for only seven percent of 
their $11 million sale price in Los Angeles, and 24 percent of their $2 
million sale price in Cleveland.
    The defendants' written contracts specifically excluded from the 
sale most of the assets associated with the actual operations and 
goodwill of the two shuttered newsweeklies, notably: (i) The 
advertising personnel, writers, editors, and other employees, (ii) 
leases, offices, and computer equipment, (iii) back issues and archived 
materials of the closed publications, including editorial articles, 
photos, and art work, and (iv) the logos, trade names, trademarks, and 
copyrights associated with the closed publications. New Times 
specifically retained the rights to its New Times LA logo or ``flag,'' 
and Village Volice Media specifically retained the rights to its 
Cleveland Free Times logo or ``flag,'' but both defendants were 
contractually prevented from using, or letting anyone else use, these 
logos.
    As defendants acknowledged in their internal documents, the goal of 
their agreement was to end their competitive war and to give one 
another a monopoly in each market. Consequently, the defendants' 
written contracts were designed to ensure that neither defendant would 
face competition in its ``protected'' market. To further that end, the 
defendants' contracts contained:
    [sbull] Essentially identical ``non-competition'' clauses in which 
each defendant agreed not to publish an alternative newsweekly in the 
other defendant's market for at least ten years;
    [sbull] Commitments by each defendant not to solicit or attempt to 
induce any advertiser to advertise in a competing publication over the 
next decade;
    [sbull] Requirements that each Defendant redirect any traffic on 
its closed weekly's website to the other defendant's website for a 
period of one year, and to prominently state on its website that its 
alternative newsweekly was no longer in circulation;
    [sbull] Provisions to deter any new competitive entry into each 
defendant's protected market. For example, over the next decade, 
Village Voice Media agreed not to use, and to prevent anyone else from 
using, the name ``Cleveland Free Times'' in connection with any current 
or future publication in the greater Cleveland area. Similarly, over 
the next decade, New Times agreed not to use, and to prevent anyone 
else from using, the name ``New Times LA'' or any variant containing 
``New Times'' in connection with any current or future publication in 
the greater Los Angeles area; and
    [sbull] Prohibitions on selling or otherwise making available any 
of the fixed assets associated with each defendant's closed publication 
to any of its former employees, consultants, or independent contractors 
in the affected markets.
    After defendants executed their written contracts on October 1, 
2002, defendant Village Voice Media closed down its Cleveland Free 
Times alternative newsweekly the next day, leaving New Time's Cleveland 
Scene the only alternative newsweekly in Cleveland, Ohio. Likewise, on 
October 2, 2002, New Times informed its New Times LA staff that it was 
shutting down immediately, leaving Village Voice Media's LA Weekly the 
only alternative newsweekly distributed throughout the greater Los 
Angeles area.

E. Competitors' Allocation of Geographic Markets Is an Unreasonable 
Restraint of Trade That is Per Se Illegal

    The Supreme Court has long held that territorial allocation schemes 
among direct competitors are naked restraints of trade with no purpose 
except stifling competition. United States v. Topco Assoc., 405 U.S. 
596, 608 (1972) (citations omitted); see also Addyston Pipe & Steel Co. 
v. United States, 175 U.S. 211 (1899), modifying and aff'g 85 F. 271 
(6th Cir. 1898) (Taft, J.); Citizen Publ'g Co. v. United States, 394 
U.S. 131, 139-40 (1969)(applying per se standard where defendants' 
``market control'' agreement comported neither with antitrust laws nor 
with First Amendment). As recently as 1990, the Supreme Court repeated 
that such market allocation agreements are classic examples of a per se 
violation of the Sherman Act. Palmer v. BRG of Georgia, Inc., 498 U.S. 
46 (1990).
    Accordingly, these market allocation agreements--whereby 
competitors agree to divide or allocate among themselves certain 
geographic areas--are condemned as per se violations of section one of 
the Sherman Act. Given their pernicious effect on competition and lack 
of any redeeming virtue, these market allocation agreements are 
conclusively presumed to be unreasonable, without the need for an 
elaborate inquiry into the precise harm that they caused or the 
potential business justification for their use. Topco, 405 U.S. at 607 
(quoting Northern Pacific Ry. Co. v. United States, 356 U.S. 1, 5 
(1958)). Consequently, competitors cannot agree to split or ``swap'' 
markets.

[[Page 7144]]

    This is not a case in which the territorial restraints were 
ancillary to a lawful business transaction. Such ancillary restraints 
are not illegal when reasonably necessary to protect the purchaser of 
the full enjoyment of the legitimate fruits of the contract. Addyston 
Pipe & Steel, 85 F. at 283. The Antitrust Division examines the 
substance, rather than the form, of the parties' agreement in 
evaluating its potential effect. When the restraints of trade are 
reasonably ancillary to the agreement's central pro-competitive 
purposes, then the Division will analyze the restraints under the rule-
of-reason standard. Where the central purpose of the parties' 
agreement, however, is to unreasonably restrain competition by 
allocating territories and terminating competition among themselves and 
by preventing any significant entrant from competing, then the entire 
agreement will be treated as per se illegal. As Judge (later Mr. Chief 
Justice) Taft noted over 100 years ago, ``[t]here is in such contracts 
no main lawful purpose, to subserve which partial restraint is 
permitted, and by which its reasonableness is measured, but the sole 
object is to restrain trade in order to avoid the competition which it 
has always been the policy of the common law to foster.'' Id.
    That is the case, here, where the central purpose and effect of the 
defendants' agreement were to unreasonably restrain competition, by 
allocating the only two markets in which they compete, so that after 
swapping these markets, defendants would face no significant direct 
competitor. Five factors support this conclusion.
    First, this was not a case where the underlying agreement created a 
distinctive product, and thereby increased competition in the 
alternative newsweekly industry generally, or in Cleveland or Los 
Angeles, specifically.\1\ The defendants' restraints on competition 
were not essential for, or even beneficial to, the products, which in 
this case are alternative newsweeklies, to be made available in the 
first place. After all, before their market allocation agreement, 
defendants vigorously competed through their own alternative 
newsweeklies. As a direct result of the defendants' agreement to 
withdraw from each other's market, advertisers and readers were left 
with fewer meaningful options and the prospect of higher advertising 
rates. Consequently, the defendants' agreement on its face did not 
promote enterprise and productivity at the time it was adopted.
---------------------------------------------------------------------------

    \1\ See, e.g., Broadcast Music, Inc. v. Columbia Broad, Sys., 
Inc., 441 U.S. 1 (1979)(challenged agreement created distinctive 
product of access to vast musical repertoire).
---------------------------------------------------------------------------

    Second, the clear intent and explicit design of the defendants' 
contractual provisions were to eliminate competition in these markets 
and prevent others from meaningfully entering. Village Voice Media 
agreed to shut down its Cleveland alternative newsweekly, solely on the 
condition that New Times shuts down its newsweekly in Los Angeles. The 
contracts' essentially identical ``non-competition'' clauses prevented 
each defendant from publishing an alternative newsweekly in the other 
defendant's market for at least 10 years. Each defendant also agreed 
not to solicit or attempt to induce any advertiser to advertise in a 
competing publication over the next decade. Defendants restrained each 
other from meaningfully using the closed papers' logos and prevented 
anyone else from using these valuable assets in connection with any 
current or future publication in the Los Angeles or Cleveland areas. 
Furthermore, each defendant agreed not to sell or otherwise make 
available the fixed assets associated with its closed publication to 
any of its former employees, consultants or independent contractors, 
who might seek to rejuvenate the closed alternative newsweekly, and 
restore competition in the marketplace.
    Third, The anticompetitive restraints at issue cannot be said to be 
ancillary to the sale of assets, given that so few assets were actually 
transferred. None of the assets associated with the actual operations 
and goodwill of the defendants' two shuttered newsweeklies were sold or 
integrated into the other defendant's newsweekly. The assets defendants 
actually transferred (which were mainly the accounts receivable of the 
shuttered paper) were of little value, even by defendants' own 
calculations.
    Fourth, the anticompetitive purpose of the defendants' agreements 
is evident from the defendants' documents, which confirm that they 
entered into this agreement to end their competitive war, and grant 
each another a monopoly in the respective markets. The defendants' 
documents are replete with evidence that shows--and the testimony of 
the defendants' former employees and current advertisers confirms--that 
the defendants' market allocation agreement will end all meaningful 
competition, and enable each remaining alternative newsweekly, as the 
``only game in town,'' to raise advertising rates by a significant, 
non-cost based, amount.
    Fifth, the fact that defendants planned to, and in some cases did, 
implement such rate hikes after allocating markets on October 2, 2002, 
confirms that the defendants' agreement was formed for the purpose, and 
with the effect, of raising advertising rates.

II. Explanation of the Proposed Final Judgment

    The proposed final judgment requires divestiture that will restore 
the editorial and advertising competition in alternative newsweeklies 
published an distributed in Cleveland, Ohio and Los Angeles, 
California. Within 30 calendar days after January 27, 2003, the date 
the complaint was filed, defendants must divest the assets used in the 
publication of New Times's alternative newsweekly, the New Times LA, 
and Village Voice Media's alternative newsweekly, the Cleveland Free 
Times, to an acquirer or acquirers that, in the United States' sole 
judgment, has the intent and capability (including the necessary 
managerial, operational, technical, and financial capability) of 
competing effectively in the alternative newsweekly business.\2\ This 
relief has been tailored to ensure that the ordered divestitures 
restore the competition that has been eliminated as a result of the 
defendants' market allocation agreement and further prevent either 
defendant from exercising market power in the Cleveland of Los Angeles 
markets.
---------------------------------------------------------------------------

    \2\ The assets to be divested are defined and described in 
section II of the proposed final judgment as the ``New Times LA 
Assets'' and ``Cleveland Free Times Assets.'' Defendants in essence 
must divest all assets that were formerly employed in the 
publication of the New Times LA and Cleveland Free Times alternative 
newsweeklies, including, but not limited to, all rights to the New 
Times LA, LA Reader, LA View and Cleveland Free Times names 
(including any derivations thereof); all rights to the New Times LA 
and Cleveland Free Times website; all rights to the print and 
electronic archives of New Times LA and Cleveland Free Times 
publications and articles on a non-exclusive basis; and all other 
tangible and intangible assets used in the publication of the New 
Times LA and Cleveland Free Times.
---------------------------------------------------------------------------

    Given that defendants has closed the Cleveland Free Times and New 
Times LA in October 2002, a quick and effective remedy was necessary to 
reestablish competition. Consequently, defendants must use their best 
efforts to divest assets within 30 days. The proposed final judgment 
provides that the assets be divested in such a way as to satisfy the 
United States, in its sole discretion, that the acquirer can and will 
use the assets as part of a viable, ongoing business engaged in the 
publication of an alternative newsweekly in Cleveland, Ohio and Los 
Angles, California. Until the ordered divestitures take place, 
defendants must

[[Page 7145]]

cooperate with any perspective purchasers.
    If defendants do not accomplish the ordered divestitures within the 
prescribed 30-day time period, then section VII of the proposed final 
judgment provides that this court will appoint a trustee, selected by 
the United States, to complete the divestitures.
    If a trustee is appointed, the proposed final judgment provides 
that defendants must cooperate fully with the trustee and pay all of 
the trustee's costs and expenses. The trustee's compensation will be 
structured to provide an incentive for the trustee based on the price 
and terms of the divestiture and the speed with which its is 
accomplished. After the trustee's appointment becomes effective, the 
trustee will file monthly reports with the United States, the State 
Attorney General of Ohio and California, and this Court setting forth 
the trustee's efforts to accomplish the required divestiture. If at the 
end of three months after that appointment, the divestiture has not 
been accomplished, then the trustee, the United States, and the State 
Attorneys General of Ohio and California will make recommendations to 
this court, which shall enter such orders as appropriate to carry out 
the purpose of the final judgment.
    In addition to ordering the divestiture of the assets used in the 
publication of the Cleveland Free Times and New Times LA, the proposed 
final judgment places several additional requirements on defendants.
    First, Village Voice Media and New Times are enjoined under the 
proposed final judgment from taking any actions in furtherance of, or 
required under, both their written and oral market allocation 
agreements.
    Second, for a period of two years commencing from January 27, 2003, 
Village Voice Media and New Times must allow advertisers that entered 
into certain written or oral contracts to advertise in, or engage in a 
promotion with, the LA Weekly or Cleveland Scene, solely at the 
advertiser's option, the right to terminate such contract without 
penalty, retaliatory action, or threat of retaliatory action. The 
advertising or promotion contracts that may be terminated are those 
entered into beginning October 1, 2002, and for the Cleveland 
advertisers, ending 30 days after the assets of the Cleveland Free 
Times are sold, and for the Los Angeles advertisers, 30 days after the 
assets of the New Times LA are sold.
    Third, for a period of five years commencing from January 27, 2003, 
each defendant cannot directly or indirectly enter into any merger, 
sale, or joint venture involving any of its alternative newsweeklies or 
national advertising networks or acquire any assets of any alternative 
newsweekly without first notifying the United States 30 days in 
advance. If within this 30-day period, the United States requests 
additional information, defendants cannot consummate the proposed 
transaction or agreement until 20 days after submitting all such 
additional information.
    Fourth, for any employee who was involved in the publication of the 
Cleveland Free Times or the New Times LA as of October 1, 2002, any 
non-compete provision imposed by defendants on such employee shall be 
null and void. Moreover, from the date the complaint was filed, January 
27, 2003, to one year from the divestiture of the Cleveland Free Times 
assets, neither Village Voice Media nor New times can enforce any other 
non-compete contractual provisions against any of their former or 
current employees in the greater Cleveland area. Likewise, from January 
27, 2003, to one year from the divestiture of the New times LA assets, 
defendants cannot enforce any other non-compete contractual provisions 
against any of their former or current employees in the greater Los 
Angeles area.
    Fifth, the final judgment enjoins each defendant, and its officers, 
directors, agents, and employees from entering into, continuing, 
maintaining, or renewing this, or any other, market or customer 
allocation agreement, or from engaging in any other conspiracy, 
agreement, or understanding having a similar purpose or effect, and 
from adopting or following any practice having a similar purpose or 
effect.

III. Remedies Available to Potential Private Litigants

    Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suite in Federal district court to recover 
three times the damages the person has suffered, as well as the costs 
of bringing a lawsuit and reasonable attorneys' fees. Entry of the 
proposed final judgment will neither impair nor assist the bringing of 
any private antitrust damage action. Under the provisions of section 
5(a) of the Clayton Act, 15 U.S.C. 16(a), the proposed final judgment 
has no effect as prima facie evidence in any subsequent private lawsuit 
that may be brought against defendants.

IV. Procedures Available for Modification of the Proposed Final 
Judgment

    The parties have stipulated that the proposed final judgment may be 
entered by this court after compliance with the provisions of the APPA, 
provided that the United States has not withdrawn its consent. The APPA 
conditions entry of the decree upon this court's determination that the 
proposed final judgment is in the public interest.
    The APPA provides a period of at least 60 days preceding the 
effective date of the proposed final judgment within which any person 
may submit to the United States written comments regarding the proposed 
final judgment. Any person who wishes to comment should do so within 60 
days of the date of publication of this competitive impact statement in 
the Federal Register. The United States will evaluate and respond to 
the comments. All comments will be given due consideration by the 
Department of Justice, which remains free to withdraw its consent to 
the proposed final judgment at any time prior to entry. the comments 
and the response of the United States will be filed with this court and 
published in the Federal Register.
    Written comments should be submitted to: James R. Wade, Chief, 
Litigation III Section, Antitrust Division, United States Department of 
Justice, 325 Seventh Street, NW., Suite 300, Washington, DC 20530.
    The proposed final judgment provides that this court retains 
jurisdiction over this action, and the parties may apply to this court 
for any order necessary or appropriate for the modification, 
interpretation, or enforcement of the final judgment.

V. Alternatives to the Proposed Final Judgment

    The United States considered, as an alternative to the proposed 
final judgment, a full trial on the merits against defendants. Given 
the inherent delays of a full trial and the appeals process, the United 
States is satisfied that the prompt divestiture of the Cleveland Free 
Times assets and New Times LA assets, coupled with the other relief 
contained in the proposed final judgment, will quickly establish, 
preserve and ensure a viable competitor in the publication of 
alternative newsweeklies in Cleveland, Ohio and Los Angeles, 
California. Thus, the United States is convinced that the proposed 
final judgment, once implemented by the court, will present

[[Page 7146]]

defendants from illegally benefitting from their market allocation 
agreement.

VI. Standard of Review Under the APPA for Proposed Final Judgment

    The APPA requires that proposed consent judgments in antitrust 
cases brought by the United States be subject to a 60-day comment 
period, after which the court shall determine whether entry of the 
proposed final judgment is ``in the public interest.'' In making that 
determination, the court ``may consider''--

    (1) The competitive impact of such judgment, including 
termination of alleged violations, provisions for enforcement and 
modification, duration or relief sought, anticipated effects of 
alternative remedies actually considered, and any other 
considerations bearing upon the adequacy of such judgment;
    (2) The impact of entry of such judgment upon the public 
generally and individuals alleging specific injury from the 
violations set forth in the complaint including consideration of the 
public benefit, if any, to be derived from a determination of the 
issues at trial.

15 U.S.C. 16(e)(emphasis added). As the Court of Appeals for the 
District of Columbia has held, the APPA permits a court to consider, 
among other things, the relationship between the remedy secured and the 
specific allegations set forth in the government's complaint, whether 
the decree is sufficiently clear, whether enforcement mechanisms are 
sufficient, and whether the decree may positively harm third parties. 
See United States v. Microsoft Corp., 56 F.3d 1448, 1458-62 (D.C. Cir. 
1995).
    In conducting this inquiry, ``the court is nowhere compelled to go 
to trial or to engage in extended proceedings which might have the 
effect of vitiating the benefits of prompt and less costly settlement 
through the consent decree process.''\3\ Rather,

    \3\ 119 Cong. Rec. 24,598 (1973). See United States v. Gillette 
Co., 406 F. Supp. 713, 715 (D. Mass. 1975). A ``public interest'' 
determination can be made properly on the basis of the competitive 
impact statement and response to comments filed pursuant to the 
APPA. Although the APPA authorizes the use of additional procedures, 
15 U.S.C. 16(f), those procedures are discretionary. A court need 
not invoke any of them unless it believes that the comments have 
raised significant issues and that further proceedings would aid the 
court in resolving those issues. See H.R. Rep. No. 93-1463, 93rd 
Cong. 2d Sess. 8-9 (1974), reprinted in 1974 U.S.C.C.A.N. 6535, 
6538-39.
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absent a showing of corrupt failure of the government to discharge 
its duty, the court, in making its public interest finding, should * 
* * carefully consider the explanations of the government in the 
competitive impact statement and its responses to comments in order 
to determine whether those explanations are reasonable under the 
circumstances.\4\

    \4\ United States v. Mid-America Dairymen, Inc., 1977-1 Trade 
Cas. (CCH) ]61,508, at 71,980 (W.D. Mo. 1977); see also United 
States v. Loew's Inc., 783 F. Supp. 211, 214 (S.D.N.Y. 1992); United 
States v. Columbia Artists Mgmt., Inc., 662 F. Supp. 865, 870 
(S.D.N.Y. 1987).
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    Accordingly, with respect to the adequacy of the relief secured by 
the decree, a court may not ``engage in an unrestricted evaluation of 
what relief would best serve the public.'' United States v. BNS, Inc., 
858 F.2d 456, 462 (9th Cir. 1988) (quoting United States v. Bechtel 
Corp., 648 F.2d 660, 666 (9th Cir.), cert. denied, 454 U.S. 1083 
(1981)); see also Microsoft, 56 F.3d at 1458. ``Indeed, the district 
court is without authority to `reach beyond the complaint to evaluate 
claims that the government did not make and to inquire as to why they 
were not made.' '' United States v. Microsoft Corp., 231 F. Supp. 2d 
144, 154 (D.D.C. 2002) (quoting Microsoft, 56 F.3d at 1459). Precedent 
requires that:

The balancing of competing social and political interests affected 
by a proposed antitrust consent decree must be left, in the first 
instance, to the discretion of the Attorney General. The court's 
role in protecting the public interest is one of insuring that the 
government has not breached its duty to the public in consenting to 
the decree. The court is required to determine not whether a 
particular decree is the one that will best serve society, but 
whether the settlement is ``within the reaches of the public 
interest.'' More elaborate requirements might undermine the 
effectiveness of antitrust enforcement by consent decree.\5\

    \5\ United States v. Bechtel Corp., 648 F.2d at 666 (emphasis 
added); see also United States v. BNS, Inc., 858 F.2d at 462-63 
(district court may not base its public interest determination on 
antitrust concerns in markets other than those alleged in 
government's complaint); United States v. Gillette Co., 406 F. Supp. 
at 716 (court will not look at settlement ``hypercritically, nor 
with a microscope''); United States v. National Broad. Co., 449 F. 
Supp. 1127, 1143 (C.D. Cal. 1978) (same).
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    The proposed final judgment, therefore, should not be reviewed 
under a standard of whether it is certain to eliminate every 
anticompetitive effect of a particular practice or whether it mandates 
certainty of free competition in the future. Court approval of a final 
judgment requires a standard more flexible and less strict than the 
standard required for a finding of liability. A ``proposed decree must 
be approved even if it falls short of the remedy the court would impose 
on its own, as long as it falls within the range of acceptability or is 
within the reaches of public interest.'' \6\
---------------------------------------------------------------------------

    \6\ Microsoft, 231 F. Supp. 2d at 153 (quoting United States v. 
American Tel. & Tel. Co., 552 F. Supp. 131, 151 (D.D.C. 1982) 
(citation omitted), aff'd sub nom. Maryland v. United States, 460 
U.S. 1001 (1983)); see also United States v. Alcan Aluminum, Ltd., 
605 F. Supp. 619, 622 (W.D. Ky. 1985) (standard is not whether 
decree is one that will best serve society, but whether it is within 
the reaches of the public interest); United States v. Carrols Dev. 
Corp., 454 F. Supp. 1215, 1222 (N.D.N.Y. 1978) (standard is not 
whether decree is the best of all possible settlements, but whether 
decree falls within the reaches of the public interest).
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    Moreover, the court's role under the APPA is limited to reviewing 
the remedy in relationship to the violations that the United States has 
alleged in its complaint, and does not authorize the court to 
``Construct [its] own hypothetical case and then evaluate the decree 
against that case.'' Microsoft, 56 F.3d at 1459. Since the ``court's 
authority to review the decree depends entirely on the government's 
exercising its prosecutorial discretion by bringing a case in the first 
place,'' it follows that the court ``is only authorized to review the 
decree itself,'' and not to ``effectively redraft the complaint'' to 
inquire into other matters that the United States might have but did 
not pursue. Microsoft, 56 F.3d at 1459-60.

VII. Determinative Documents

    There are no determinative materials or documents within the 
meaning of the APPA that were considered by the United States in 
formulating the proposed final judgment.

    Dated: February 3, 2003.

    Respectfully submitted,

Maurice E. Stucke,
Carol A. Bell,
Matthew J. Bester,

Attorneys for the United States, U.S. Department of Justice, 
Antitrust Division, Litigation III Section, 325 7th Street, NW., 
Suite 300, Washington, DC 20530. (202 305-1489 (telephone). (202) 
514-1517 (facsimile). [email protected].

Jon Smibert,

Attorney for the United States, U.S. Department of Justice, 
Antitrust Division, Cleveland Field Office, 55 Erieview Plaza, Suite 
700, Cleveland, OH 44114-1816.

Certificate of Service

    I hereby certify that I served a copy of the foregoing competitive 
impact statement via first class United States mail, this 3rd day of 
February, 2003, on:

Melanie Sabo,

Preston Gates Ellis & Rouvelas Meeds LLP, 1735 New York Avenue, NW., 
Suite 500, Washington, DC 20006-5209. Counsel for Defendant Village 
Voice Media, LLC.

Joseph Kattan, P.C.

Gibson, Dunn & Crutcher LLP, 1050 Connecticut Avenue, NW., 
Washington, DC 20036. Counsel for Defendant NT Media, LLC.

Matthew Bester,


[[Page 7147]]


Attorney for the United States, U.S. Department of Justice, 
Antitrust Division, 325 Seventh Street, NW., Suite 300, Washington, 
DC 20530. (202) 353-4391.

[FR Doc. 03-3441 Filed 2-11-03; 8:45 am]
BILLING CODE 4410-11-M