Ad/Sat Sues Associated Press

By Giobbe, Dorothy | Editor & Publisher, September 24, 1994 | Go to article overview

Ad/Sat Sues Associated Press


Giobbe, Dorothy, Editor & Publisher


AD/SAT, A DIVISION of Skylight Inc., has filed an antitrust suit against the Associated Press, alleging that the nonprofit cooperative is engaging in monopolistic and anti-competitive business practices through the implementation of AdSEND, the AP ad delivery service.

The suit, filed Sept. 14 in U.S. District Court for the Southern District of New York, names as defendants and co-conspirators in an "unlawful group boycott" the AP; Newspaper Association of America; Newspaper National Network; Newark Star-Ledger; Birmingham News Co.; Great Lakes Media Co., publisher of the Oakland Press in Pontiac, Mich.; News & Observer Publishing Co., publisher of the Raleigh, N.C., News & Observer; the Daily Oklahoman, Oklahoma City and Lexington Herald-Leader.

In the suit, Ad/Sat charges that the AP has a monopoly in the wire news and photo markets and is attempting to extend the monopoly to the advertising transmission market by charging advertisers below-cost transmission fees that will force Ad/Sat out of business.

Ad/Sat transmits its ads over the AP satellite system, which reaches nearly all U.S. daily newspapers. Ad/Sat pays the AP an annual rental fee for the satellite space, which accounts for about 15% of Ad/Sat's overall operating expense in a given year.

Because the AP owns and operates the satellite network, Ad/Sat contends that the AP can subsidize any losses it sustains from low ad transmission rates with AP membership dues. The AdSEND rates being offered to advertisers are lower than Ad/Sat's cost of renting the space, giving AdSEND an unfair cost advantage, according to the suit.

While Ad/Sat charges newspapers a transmission fee of $20 to $28, AdSEND transmission costs will be borne by advertising agencies that use AdSEND, the lawsuit contends.

According to an AdSEND rate card, an advertiser that contracts to send 100,000 recruitment ads annually could pay a transmission fee of as little as $1 per classified ad, per newspaper, or $4 per display ad, per newspaper, for 12-hour delivery service.

Also, AP plans to install and maintain the necessary AdSEND hardware and software at AP member newspapers at no charge, while Ad/Sat charges newspapers an annual fee of $7,500 to $12,500 to cover equipment and maintenance costs.

Ad/Sat contends that the value of the equipment AP will be giving each newspaper is $17,000.

"If AP is permitted to implement the AdSend program as announced, with free hardware, software, maintenance services, and advertising transmissions for participating newspapers, and below-cost predatory prices to advertisers, then Ad/Sat will suffer serious and irreparable harm....," the suit states.

"Ad/Sat cannot possibly compete if Associated Press predatorily charges prices below Ad/Sat's transmission costs, which are largely determined and controlled by Associated Press," the suit continues.

The suit contends that since 1987, the various owners of Ad/Sat have invested more than $30 million in the development of its business.

During 1993, Ad/Sat says it delivered more than 26,000 ads to more than 400 newspapers and those ads involved 56,000 receptions by Ad/Sat-affiliated newspapers worth an estimated $400 million in ad revenues for the newspapers served.

The court papers point to several entangling relationships among the defendants. The Associated Press provides services to Newspaper Association of America member papers, and the NAA has formed the NNN, through which it is offering advertisers the opportunity to place national ad buys at special rates.

Frank A. Daniels, president of the News & Observer Publishing Co., is also chairman of AP, and Donald Newhouse, immediate past chairman of the NAA, is the head of Newhouse Newspapers, which owns the Star-Ledger and Birmingham News. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Ad/Sat Sues Associated Press
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.