Former newspaper rivals in three-year legal dispute come together to form new media publishing group
Two media companies involved in a nearly three-year legal battle put down their swords and formed a new media partnership, the parties announced late Wednesday afternoon.
Ending a long and costly legal dispute over the right to publish legal advertisements, owners of Santa Clarita Valley Signal and Gazette Free Classifieds formed a new partnership named SCV Publications LLC.
A deal approved in the U.S. federal courts on Wednesday means the Gazette and Canyon Country Magazine will be able to continue publishing with the new ownership structure that has been put in place.
Ownership of newly formed SCV Publications LLC is comprised jointly of Gazette owners Doug and Jeannie Sutton, and Signal newspaper owners Chuck Champion, Gary Sproule and Russ Briley.
Under the new partnership agreement, The Signal and Gazette each continue to operate as separate businesses. And the Gazette will continue to operate with full editorial independence.
Employees at both companies were informed by the new group of five media owners at the end of the day on Wednesday. The Suttons and Signal owners jointly made the in-person, back-to-back announcements to the staff at each publication.
“The three years of legal wrangling could have gone on for another three years,” said Champion, one of the new owners who acquired The Signal from Morris Multimedia on Jan. 1 of this year. “This is a great day for all of us and for journalism. We both play critically important roles in the community, but come at them from two different directions.”
At the Signal staff meeting, Sutton said that over the years the battle got nasty at times. But, after an especially heated meeting one recent day – one in which Sutton said his wife and lawyer put him a “big boy timeout” – Champion came back three hours later and asked if Sutton would consider going into business together.
“When we started to talk face-to-face, it was clear we as owners had a lot in common,” Sutton said in a statement. “In particular, we shared a real fervor for the Santa Clarita Valley and, more importantly, community news.”
The joint resolution appears to be a win-win for both parties.
The 97-year old Signal protects its legal advertising revenue, and the Gazette continues to publish and operate as it has before. The deal also brings an end to the three years of court costs, and a close to the Sutton’s bankruptcy motion.
“The Gazette will retain its existing staff; there are no layoffs,” Champion said. “And ‘Doug’s Rant’ will continue. They have editorial independence.”
The Gazette, however, will benefit from sharing some joint operations with The Signal which will bring significant savings, particularly in terms of distribution costs, he said.
Also creditors from the Sutton’s bankruptcy filing will be dealt with individually, Champion said. And a contract with the Gazette’s largest creditor, Valley Printers, is being negotiated.
The lengthy legal dispute between The Signal and Gazette often spilled over into the pages of both newspapers and became a source of much public attention in other local media, the two papers admitted in a joint press release. The Signal carried editorials on the subject and Sutton featured this dispute in his blog “Doug’s Rant.”
Despite amicably settling the long dispute, The Signal was asked why it pursued a joint agreement that would operate more than one publication in the Santa Clarita Valley. Champion and Sproule said both papers offered readers in the community something very different.
“We’ve always seen and appreciated the value of the Gazette,” Champion said. “It has a different editorial voice, different readers, different advertisers and different distribution.”
Working with the Gazette is similar to many community newspaper groups today wherein they own multiple dailies and weeklies, he said.
“We also own The Signal and Santa Clarita Valley Business Journal,” Champion said. “And we’ll likely have other publications in the future.”
As for the new partnership from the Gazette’s point of view, Sutton has had a change of heart, he said, and is now excited about the possibilities – something he never expected to happen when and in the midst of the battle, he said.
“I had an absolute anger for these guys from the legal dispute and unfortunately I took it personally,” Sutton said. “Remarkably it’s now turned into a newly found friendship.”
And the contrast between how he felt during the legal battle compared to now is much more relaxing, he said. He’s actually looking forward to the future.
Champion agreed saying that the two parties always had more in common than their differences reflected. By settling the differences and working together as business partners, he believes a “critical voice in the community is being preserved.”
“I am looking forward to picking the newspaper-brain of my new friends,” Sutton said. “I’m also excited about the possibility of expanding our newly formed company down the road.”