Antitrust Suit May Result if News Closes

MIAMI —  The Justice Department said Friday that closing the Miami News could trigger an antitrust suit if investigators determine that its owner did not make a serious effort to sell the newspaper.

The 92-year-old News is due to close today if a buyer is not found.

Meanwhile, a federal judge on Friday dismissed efforts by local groups trying to force the News to stay open, saying the government could not compel a newspaper to publish.

The News is owned by Cox Enterprises Inc. and since 1966 has been published under a joint operating agreement between Cox and Knight-Ridder Inc., which owns the rival Miami Herald.

Cleaning Out Desks

Cox had been conducting sale negotiations with a Chicago consultant representing a group of investors, but David Easterly, who heads Atlanta-based Cox’s newspaper division, said Friday no deal was made.

“It’s over,” Easterly said.

In the newsroom, News staffers were cleaning out desks while keeping ears open for the latest efforts to halt the closing.

“It’s been real stressful,” said Bonnie Anderson, a former NBC-TV foreign correspondent who became a News columnist 15 months ago. “This is a very dignified 92-year-old woman and she deserves to die with some honor, not to keep her on life-support systems.”

Many staffers planned to gather in the early morning hours Saturday for the final press run.

In Washington, the Justice Department found that an amendment to the joint operating agreement allowing Cox to share Herald profits even if the News is shut down means the deal “would likely lose its antitrust immunity,” said Charles F. Rule, head of the antitrust division.

Studying Memo

“That amendment would make it financially beneficial to both parties if the News goes out of business,” Rule wrote. “Therefore the investigation deals not only with how vigorous a search was made for potential buyers by Cox, but how seriously negotiations were conducted once a potential buyer was found.

“A conclusion that serious efforts by Cox would have resulted in the sale of the Miami News could provide the basis for an antitrust suit,” his memo said.

Knight-Ridder officials said they were studying Rule’s memo.

“We and our lawyers are reviewing it and we have no comment at the moment,” said James K. Batten, president and chief executive of Knight-Ridder.

Easterly refused to comment on Rule’s statement, saying only, “Press releases are not law.”

Easterly was attending a hearing in Miami on the federal suit filed by officials from a dozen community newspapers who claim closing the News will result in a monopoly for the Herald. The plaintiffs included readers and distributors of the News.

After the two-hour hearing, U.S. District Judge Stanley Marcus rejected their arguments.

“The question is whether the government has the power to compel a newspaper to publish if it wishes to be silent,” Marcus said, ruling that he had no such right. He also questioned whether the plaintiffs could show they stood to lose because of the sale.

Negotiations for the paper’s sale snagged earlier in the week when Easterly rejected the investors’ proposal that Cox support the paper’s losses for six weeks while the potential buyers obtained a loan.