Unfair Competition

Ever since he took over the New Orleans Item three years ago, Publisher David ("Tommy") Stern has faced a double-barreled shotgun in the hands of his competition. Rival Publisher Leonard K. Nicholson used both his New Orleans morning Times-Picayune and afternoon States to keep Stern's afternoon Item in check. Two years ago Stern found an ally, when the Justice Department started an antitrust suit against Nicholson's papers. The Government's main charge: unfair competition by Nicholson, because he forced advertisers to put ads in both his papers, even if they wanted to advertise only in one.

Last week, in a precedent-making decision, Federal Judge Herbert W. Christenberry ruled that Nicholson's unit rates were indeed unfair competition. Thus, what started out as a local fight blossomed into an issue affecting more than 170 newspapers all over the U.S.; many publishers who own morning and evening papers in one city also use the unit advertising rates, i.e., advertisers must buy space in both papers to get in either one.

Judge Christenberry upheld the Government charge that the T-P and States unit rates were taking ads away from the Item, since few New Orleans advertisers could afford not to advertise in the TP, by far the biggest paper in the city. Said he: "The Times-Picayune, because of its monopoly position, has been able to force buyers of advertising space to purchase what they do not want, space in the States, in order to obtain what they require, space in the Times-Picayune."

The court rejected the Government's charge that the T-P had deliberately bought the States and run it at a loss to monopolize New Orleans' ad market. It also denied the Government's charge that the T-P forced newsstands not to sell the Item. But in knocking down the unit rate, Judge Christenberry set a precedent that may undermine the ad practices of newspaper publishers across the country. The T-P announced that it would appeal the case to the U.S. Supreme Court.

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