Newport News Closes, Blames Rival’s Lawsuit

The 15-month-old Newport News ceased publication Friday, saying accusations of fraud by a competitor, the Daily Pilot, put it out of business.

L. Kay Schrock, publisher and owner of the weekly Newport News, said that a “sham lawsuit” filed by the Daily Pilot last November caused her publication’s revenue to fall by 57% to $7,700 a week. The Pilot’s lawsuit accused the News of inflating its circulation figures, falsely calling itself the largest circulation newspaper in Newport Beach and luring away advertisers.

The Newport News has countersued, and Schrock said she will pursue the case in court in January.

She said she decided to close the newspaper, which has a staff of seven in addition to 15 regular free-lance contributors, because she could not afford to both pay for the lawsuit and continue to do business.

Schrock would not say how much money she lost with the Newport News.

“I think we gave the community integrity in reporting, something enjoyable to read, and we never sensationalized for the sake of making a sale,” Schrock said. “That’s pretty good for 15 months.”

James Gressinger, publisher of the Costa Mesa-based Daily Pilot, which publishes six days a week, said Schrock’s chances of success were limited from the start because the paper tried to break into such a competitive market.

“The Daily Pilot operates under the weight of very heavy competition between The Times and the Register,” he said. “That drives advertising rates down, which is good for the advertisers, but not very good for us, and it was deadly for the Newport News.”

He laughed when asked whether he had driven the Newport News out of business. “I’ve attempted to settle this case on several occasions,” he said of the lawsuits.

The continuing legal battle between the Newport News and the Daily Pilot promises to be a bitter one. In addition to the lawsuits, Schrock filed a complaint with the police Oct. 6 that accuses the Pilot of defrauding advertisers by overstating its circulation by as much as 33%.

Schrock said she and her staff have no immediate plans. They are planning to use the office next week to put together resumes and portfolios, she said, to prepare for job searches.

Before starting the Newport News, Schrock said, she worked for about 18 months as general manager of two small newspapers in the San Diego area, the Beach and Bay Press and the Beacon. She said she formerly owned a business, Consultants Unlimited, out of Tempe and Tucson, Ariz., but declined to specify what that business did.