Gazette's Purchase Under Review

Gazette's Purchase of Chesapeake Papers Under Antitrust Review

Maryland’s attorney general is reviewing allegations that the Gazette Newspapers, a division of The Washington Post Co., violated antitrust laws with its recently completed acquisition of publications from Chesapeake Publishing’s Southern Maryland Division.

Ellen Cooper, chief of the antitrust division in the office of the Maryland attorney general, said "We are looking into the latest purchase."

In addition, Cooper’s office has asked to be kept informed about an antitrust lawsuit filed in federal court by two Maryland newspaper publishers. The lawsuit alleges that The Post Co. and its Gazette unit are using their combined market power to buy up local rivals and force others out of business, specifically by offering advertising at rates below their cost.

In late February, a federal district judge in Baltimore rejected the two publishers’ request for an emergency petition to block the sale.

That request and the lawsuit were filed by Kenneth C. Rossignol, the owner of St. Mary’s Today, a weekly newspaper, and Berlyn, Inc., which publishes the Prince George’s Sentinel and the Montgomery County Sentinel, both weeklies.

Separately, The Washington Times also has asked the U.S. Justice Department to investigate the acquisition.

Post Co, spokesman Guyon H. Knight said the antitrust lawsuit is without merit.

Industry analysts say Gazette Newspapers’ acquisition is the latest example of a major daily newspaper buying out community newspapers in an effort to expand its advertising base.

Under the agreement, Gazette will add 10 non-daily publications and a Waldorf printing operation to its group of 45 community and military publications.

Chesapeake will still own 20 newspapers, including two dailies, The Star Democrat in Easton and The Cecil Whig in Elkton, as well as four printing facilities on the Eastern Shore.

- from reports in The Washington Post