Newspaper faces off against well-established family

October 29, 2007
In Canada, a New Newspaper Faces Off Against a Well-Established Family
By IAN AUSTEN

OTTAWA, Oct. 28 — Between its oil refineries, service stations, trucking companies, building supply stores, food processing plants, shipyards, radio stations, timberlands and sawmills, it is hard to escape the Irving family’s influence in its native Canadian province, New Brunswick.

That is particularly the case for newspaper readers. All of the area’s English-language daily newspapers are Irving owned, and the family dominates the province’s weekly publications.

William Kenneth Langdon, a newspaper publisher, has now found that the Irvings’ dominance is not easily broken. When he begins publishing The Carleton Free Press on Tuesday to compete against an Irving-owned, twice-weekly publication, Mr. Langdon will be unusually constrained. A court order bars him from contacting readers, advertisers, employees, contractors, suppliers and distributors of Brunswick News, an Irving holding company, let alone making business deals with them.

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Leisure Society said...

October 29, 2007
In Canada, a New Newspaper Faces Off Against a Well-Established Family
By IAN AUSTEN

OTTAWA, Oct. 28 — Between its oil refineries, service stations, trucking companies, building supply stores, food processing plants, shipyards, radio stations, timberlands and sawmills, it is hard to escape the Irving family’s influence in its native Canadian province, New Brunswick.

That is particularly the case for newspaper readers. All of the area’s English-language daily newspapers are Irving owned, and the family dominates the province’s weekly publications.

William Kenneth Langdon, a newspaper publisher, has now found that the Irvings’ dominance is not easily broken. When he begins publishing The Carleton Free Press on Tuesday to compete against an Irving-owned, twice-weekly publication, Mr. Langdon will be unusually constrained. A court order bars him from contacting readers, advertisers, employees, contractors, suppliers and distributors of Brunswick News, an Irving holding company, let alone making business deals with them.

The injunction is part of a lawsuit that Brunswick News says is only about the misappropriation of confidential information that was available to Mr. Langdon when he worked for the company.

“I respect the right of an individual in starting a newspaper,” said Victor S. Mlodecki, the vice president and general manager of Brunswick News. “What I object to is using my information to start something to compete against my publication.”

But in court filings and through his lawyer, Mr. Langdon argues that the litigation is simply a move by the Irving family to maintain what he sees as its virtual monopoly.

“This is an attempt to carve out a significant portion of the advertising market for themselves,” Peter Mockler, a lawyer for Mr. Langdon, said in court on Friday, the Canadian Press news agency reported. “It’s like saying to Mr. Langdon: ‘You can play hockey, but you can’t have any skates.’”

Last month, Mr. Langdon quit as publisher of The Bugle-Observer, a Brunswick News paper based in the town of Woodstock. After that, Brunswick News obtained an unusual private search warrant. It allowed representatives of KPMG, the accounting firm, to go through Mr. Langdon’s home, office and truck. The searchers, who even examined the lingerie belonging to Mr. Langdon’s wife, ultimately seized several data CDs and copied the contents of several computer hard drives.

In an affidavit filed with the Court of Queen’s Bench of New Brunswick, Mr. Mlodecki said he was “astounded at the scope and extent of Brunswick News’s confidential and proprietary information which KPMG has identified in Mr. Langdon’s possession.” He added that Mr. Langdon’s retention of it “will have an irreparably damaging impact upon the operations of The Bugle.”

The information that concerns Mr. Mlodecki is mostly financial statements from The Bugle-Observer, as well as information about employees and advertisers. “He, in effect, downloaded our server onto his computer,” Mr. Mlodecki said in an interview.

Mr. Langdon declined to be interviewed until the lawsuit is resolved. But he said in an affidavit that he had deleted most of the information later recovered by KPMG immediately after resigning to avoid any allegations of theft. He did not realize, he said, that he had only moved the material to a recycling folder and did not eliminate it from the hard drive.

As for the rest of the data, Mr. Langdon said he retained some for a possible lawsuit, while other documents contained information that could easily be found in the local telephone directory. None of the information, he said, was used to develop The Carleton Free Press. Mr. Mlodecki said that his company had no evidence that Mr. Langdon did, in fact, use the information.

The real issue, Mr. Langdon testified, is competition.

“I verily believe that this is part of a concerted effort by the plaintiff to ‘crush me in the shell’ and keep me out of the newspaper business so that no competition will arise in the area,” he said.

The media domination in New Brunswick by the Irving family’s privately held companies has often been examined in Canada. When a Senate committee in Canada issued an extensive report on the country’s news media in 2006, it took particular note of the situation in New Brunswick.

“The Irvings’ corporate interests form an industrial-media complex that dominates the province,” the committee wrote. “This situation is, as far as the committee could determine, unique in developed countries.”

Mr. Langdon will be back in court on Friday. A judge is expected to rule on modifications to the injunction that would limit the ban on Mr. Langdon’s business dealings to The Bugle-Observer’s correspondents, carriers and delivery contractors, and 15 newspaper advertisers who, Mr. Mlodecki said, “would perhaps be most susceptible to lower rates.” No trial date for the lawsuit has been set.