South Bay Papers’ Circulation War Escalates Into Court Battle : Media: Dispute over the number of readers has resulted in a $2-million libel suit. Charges and countercharges include vandalism and crank telephone calls.

The news made the front page in Manhattan Beach. Not even the peewee soccer league got better play. The local weekly, the Beach Reporter, announced it was expanding down the coast. To Kevin Cody, it meant just one thing.

“The stage has been set for a classic newspaper war,” Cody, publisher of the competing Hermosa Beach-based Easy Reader, predicted at the time. Now, after two months of charges and countercharges, ranging from vandalized news racks to crank telephone calls, the battle between the South Bay’s leading beach city tabloids has spilled into the courts with a $2-million-plus libel suit.

The heart of the lawsuit is an article Cody wrote last month questioning the Beach Reporter’s contention that it is now the biggest community newspaper in the South Bay’s three beach suburbs--Redondo Beach, Hermosa Beach and Manhattan Beach. Because weekly newspapers survive solely on advertising revenue, circulation figures, which advertisers weigh in deciding where to buy ads, are of critical importance.

Since it was founded 20 years ago, the Easy Reader, a weekly tabloid with 60,000 circulation, has had the lead in local readership. The 13-year-old Beach Reporter, which had limited its service to Manhattan Beach, ran a distant second with 40,000 readers.

“The two papers kind of tolerated each other,” said one former Beach Reporter staffer who asked not to be named. “They were two different papers with two different tones going for two different audiences.”

The more “alternative” Easy Reader tended toward articles on local scandals and advertisements for rock concerts and tanning salons; the Beach Reporter “saw itself as God, mom and apple pie,” the ex-staffer recalled, and focused on Manhattan Beach Little League scores and real estate ads.

When the McMartin Pre-School scandal hit Manhattan Beach, the Easy Reader reported the case in such detail that not even the cut of defendant Ray Buckey’s underwear was left uncovered. The Beach Reporter, on the other hand, responded with a “Kid’s Page” to bolster their self-esteem.

Nonetheless, Richard Frank, who founded the Beach Reporter in 1977, recalled that two weeks after he opened shop, Cody dropped by his Manhattan Beach office “and basically said, ‘This town isn’t big enough for both of us.’ ”

Cody said he recalled only “stopping in to size him up,” and described his history with the Beach Reporter as “extremely cordial.”

Then last year, the Beach Reporter was bought by Baker Communications Inc., a group of community newspapers that includes such local weeklies as Beverly Hills 213, the Palos Verdes Peninsula News and the Agoura Acorn. Led by Baker Communications President Seth Baker, the Beach Reporter spiffed up its front page with full-color photographs, assigned reporters to the other two beach cities and began offering home delivery on Easy Reader turf.

Soon its masthead boasted a circulation of 65,000--and Cody took issue with that.

In a Nov. 15 article, headlined “Weekly recycles news for phantom readers,” Cody reported that circulation auditors had not yet verified the Beach Reporter’s figures, and told how he, hunkered down in his green Subaru station wagon, had tailed a Beach Reporter delivery truck the week before.

Rather than drop its papers in news racks or front lawns, he reported, the truck went directly to a recycling center. There, he reported, he watched his competitor dump 8,400 issues of what apparently was that week’s paper. (Cody had the pictures to back up his claim. The front pages, he noted, bore the telltale lead photo of Manhattan Beach Police Officer Mike Navarette and his canine partner, Alk).

Michael Bergman, the Beach Reporter’s lawyer, said the papers taken to the recycling center were not part of the weekly’s regular circulation, but extra copies that had to be discarded because of printing flaws. He added that the 65,000 number is accurate. However, the Beach Reporter’s house advertisements now bear an asterisk next to the number to indicate that a circulation audit is pending.

Bergman, who filed the libel suit against the Easy Reader Tuesday in Los Angeles Superior Court, charged that the Beach Reporter has lost at least $450,000 in advertising because of Cody’s article.

Also, he said, “There has been destruction of 200 copies of the paper by someone who threw water into a rack. And there have been phone calls to the office of the Beach Reporter by people who claim to be a particular advertiser canceling an ad, and when the (ad salespeople) call back to verify, the advertiser knows nothing about it.”

Bergman doesn’t mention those incidents in the suit, although he does take the opportunity to say that the Easy Reader accepts ads for “X-rated films and other similar material that the Beach Reporter refuses to accept.”

Cody, he charges, wrote the article “to undercut (the Beach Reporter’s) advantage by any means, including falsehood and deception.”

Cody denies the charges, saying he has simply covered the Beach Reporter’s growth as he would any other local business story.

He added that he knows nothing about vandalized news racks or trick telephone calls, and he believes the suit will be dropped before it gets to trial.

“It would be suicidal for them to go to court with this. It’s a face-saving device,” Cody said.

And yes, he acknowledged, the Easy Reader will accept ads for X-rated films, “but it was a cheap shot to put it in the suit.”