Magazine article Editor & Publisher
Judge Says Syndicate Exclusivity Is Not a Violation of Antitrust Law
EXCLUSIVITY RULES FOR syndicated features do not violate antitrust laws, a Chicago judge said in an opinion that could torpedo a major challenge to these agreements.
In the 51-page opinion, U.S. Magistrate Judge Ronald A. Guzman recommended that U.S. District Court Judge John A. Nordberg dismiss the wideranging lawsuit the Daily Herald in Arlington Heights, Ill., filed last December against Chicago's two major dailies and eight major syndicates and news services.
Guzman's recommendation is only a preliminary step in a battle that is almost certain to result in an appeal -- perhaps as far as the Supreme Court -- no matter which way Nordberg rules.
The Daily Herald suit aims at the heart of an industry practice that for decades has rankled small papers that labor in the shadow of the big metros: territorial exclusivity provisions that have the effect of denying them the most popular comics, columns and supplemental news services.
Daily Herald publisher Paddock Publications contends in the suit that its growth in the Chicago market has been stunted because the Chicago Tribune and the Chicago Sun-Times have locked up such syndicated comics as "Doonesbury," "Peanuts," "Garfield," "Calvin and Hobbes" and the Dave Barry and "Dear Abby" columns. (E&P, Dec. 18, 1993, p. 29).
Guzman concluded that even if everything the Daily Herald alleges in its suit is true, syndicate arrangements with newspapers do not violate the nation's major antitrust statutes -- the Sherman and Clayton Acts.
In essence, Guzman said that while it may be true that syndicate exclusivity hurts the Daily Herald and helps its big-city competitors, the suburban paper will find no remedy in antitrust law.
Guzman concluded that "pro-competitive effects of the exclusive licensing arrangements outweigh the competitive hurdle they place in the path of competitors in the Chicago newspaper market. …