Helping Hand

When David ("Tommy") Stern bought the New Orleans Item eleven months ago, he had high hopes of uprooting the morning Times-Picayune and the evening States from their dominating position in the New Orleans newspaper field. But Northerner Stern found that Southerner Leonard Kimball Nicholson * had rooted his two newspapers as firmly as sugar cane; Meanwhile Stern's heavy investments in a bigger staff and a new Sunday edition failed to make the expected handsome payoff: in recent weeks, Stern fired or dropped 13 staffers, was reportedly losing heavily on his Sunday paper. Last week the Item (circ. 99,658) got a helping hand against the Times-Pic (circ. 180,584) and the States (circ. 99,339) from an outside party: the U.S. Government.

In a Louisiana federal court, the Department of Justice filed a civil antitrust suit against the two Nicholson newspapers, Publisher Nicholson and three top executives. Specifically, the Times-Pic and the States were accused of unfairly attempting to eliminate their only competitor by 1) forcing advertisers to buy space in both Nicholson papers at a special combined rate, 2) giving advertisers unreasonably low rates in the States based on their ad volume in the Times-Pic, 3) persuading newsstands to stop selling the Item by threatening to withdraw the Times-Pic and the States. Publisher Nicholson's only comment was to warn other publishers that they were also, by implication, parties to the suit: "A substantial part of the charges ... are incorrect. Those which are true involve practices followed by many newspapers ... for years . . ."

* No kin to Ralph Nicholson, who owned the item for eight years, sold it to Stern.

This file is automatically generated by a robot program, so reader's discretion is required.