It turns out that the Santa Barbara News-Press may not be the only "paper of rancor" in town. Over at The Independent, the weekly that has a circulation of about 40,000, Marianne Partridge, the Editor in Chief and a co-owner of the paper has sued co-owner Randy Campbell.
The lawsuit was filed on Thursday, February 11 in Santa Barbara Superior Court. It is basically a breach of contract case based on Campbell's alleged refusal to follow through on a promise to sell his 51 percent majority interest in the paper to Partridge and one of the other co-owners.
Ever since what is now the Independent rose from the ashes of its predecessor, The News & Review nearly 25 years ago, it has been owned by four people. Randy Campbell, Marianne Partridge and two investors from the east coast. Campbell owns a 51 percent stake in the publication. Partridge and the two other owners each hold a 16.5 percent stake. Partridge and Campbell have basically been the two "hands-on" owners with the two individuals from the east coast basically being silent partners.
Although Campbell was the majority owner, he pretty much stayed out of the office. In fact, according to an often repeated rumor around town, for many years he was paid a salary of $50,000, to do just that: Stay out of the office.
However, when former publisher George Thurlow left in the spring of 2006 to take over as head of the UCSB Alumni Association, Campbell came back and took charge of the business side of the paper. The arrangement was that Partridge, whose resume includes stints with The Village Voice, Look magazine and Rolling Stone, had total control over the creative side of the paper, which of course included all of the editorial content of the weekly. Campbell was in charge of the business side, including the advertising sales staff and, he also oversaw the Indy's website, which was his own personal pet project.
Some sources say, he spent too much time tinkering with the website, which generates much less revenue than the weekly print edition, which of course, has been very popular and only seemed to grow in popularity in the wake of the News-Press Mess.
According to the allegations of the complaint that was filed Thursday, Campbell, sometime last fall, notified his three other partners that he wished to sell his stake in The Independent to an individual in Los Angeles, who also happened to be the owner of the printing facility where the paper is produced each week. Pursuant to the Indy's ownership agreement, any owner who wished to sell, was obligated to offer his or her share to the other co-owners first. Only if they refused to buy him out, could he sell to a third party. It was basically a "right of first refusal" clause.
The price the co-owners had to match to buy out Campbell's share is reputed to be over $1 million. Partridge and one of the east coast investors were willing to do so, although you can imagine it was tough to raise the money in the present economic environment. Nevertheless, they succeeded in doing so and formally accepted Campbell's offer to sell. Campbell then allegedly backed out of the deal allegedly telling Partridge that he would not sell to her at any price.
Reportedly, Campbell's purchase and sale agreement with the printer in L.A. allowed Campbell to remain on as publisher at a much larger salary than he was currently getting and which would more than make up for his share of the annual profits that he would no longer receive as a co-owner. The fact that he didn't initially inform his co-owners of that part of the deal forms the basis of an allegation in the complaint that he breached his fiduciary duties to his co-owners.
Campbell reportedly has not been seen in the Independent's west Figueroa Street offices since last November. I do recall seeing him at the Indy's annual holiday bash which was held at SoHo back on December 10. He also has reportedly not been responsive to inquiries from his co-owners. According to my source, morale on the business side of the paper has declined and is reflected in part, by less advertising being sold in recent months.
I have called Campbell and e-mailed him for purposes of getting his response to the filing of the lawsuit, but I have not yet heard back.
Times are tough for newspapers. Nevertheless, the Indy has seemed to thrive. But how will it weather what portends to be a bitter legal battle between its two highest profile owners remains to be seen.
Let's hope they can at least salvage that annual holiday bash the paper throws.
© 2010 by Craig Smith and www.craigsmithsblog.com
