Hearing Set on Bid to Halt Miami News Closure

A federal judge agreed Thursday to hear arguments in a last-ditch suit seeking to stop the closure of the Miami News, but the 93-year-old daily’s publisher proceeded with plans to stop the presses Saturday.

U.S. District Judge Stanley Marcus set a hearing for this afternoon on a suit by community newspapers, readers and News distributors contending that closing the News would violate antitrust laws.

The suit is based on the joint operating agreement between the News’ owner, Atlanta-based Cox Enterprises Inc., and the Miami Herald’s owner, Knight-Ridder Inc.

Under the planned shutdown, Knight-Ridder would continue to pay a share of profits to Cox, the plaintiffs said.

“It is incredible what they’ve done, which is to pay a competitor not to operate,” said Jeffrey M. Herman, one of the lawyers representing the plaintiffs. “It’s the same as GM paying Ford not to build cars.”

Meanwhile, a Chicago newspaper consultant representing a group negotiating to buy the News said he was still working on a deal with Cox.

“It’s close,” said John Malone, the consultant. “We are proceeding ahead with what Cox wants.”

Cox Newspapers President James Easterly remained cautious, however, saying: “The next move is his.”

He said Malone had failed to come up with money that Cox required to keep the paper open pending the sale.

Easterly said if the Malone deal falls through, he has no other offers and will shut the paper down Saturday as scheduled.

The antitrust suit filed Wednesday lists as plaintiffs Florida Publications Inc., which publishes more than a dozen community newspapers in Dade County; two Miami News readers, and six independent News distributors.

The suit asks for an injunction barring Cox and Knight-Ridder from shutting down the News or selling it without profit-sharing rights under the joint operating agreement.

Easterly said Cox will contest the lawsuit.

“I’d like to see a court tell a newspaper they have to continue publishing if they don’t want to, and with a particular staff . . . I can’t imagine that will happen,” Easterly said.

Knight-Ridder spokeswoman Lee Ann Schlatter said Thursday that her company feels the suit had no merit, and it incorrectly implied that Knight-Ridder was involved in the decision to shut down the News.

“The decision to close the News is a unilateral one by Cox,” she said, but added, “We agree with Cox and we support Cox in this--we think they’ve made an honest effort.”

The complaint, which seeks in excess of $500 million in punitive damages, alleges that Cox and Knight-Ridder “conspired to monopolize the market” for daily newspapers in Miami and that the plaintiffs will suffer “irreparable injury” if the News closes.

The suit contends that the deal triggering the closing of the News conflicts with the Newspaper Preservation Act, which Congress passed in 1970 to save failing newspapers and competing editorial voices by allowing the opposing papers to combine their business operations.

U.S. Justice Department officials already are independently investigating the planned shutdown or sale of the News for possible antitrust law violations. Federal officials have refused to discuss the status of their probe.