I’m seeing talk on blogs and on twitter that the New Times paper is in financial trouble based on a court case in San Francisco. I think the reports are overstated.

New Times went into SF in 1996 or so, buying a small local weekly and going up against an established paper, the Bay Guardian. The Guardian eventually sued, saying, essentially, that New Times was deliberately selling its ads at a low price to try to put the Guardian out of business. The papers have been locked in a debilitating (and costly) range war for nearly 15 years.

I used to work at SF Weekly but was fired after some editorial disagreements; I find the muddy, unattractive battle between the two papers over the ensuing decade interesting, but won’t bore you with the details.

New Times lost the case, and a $15 million or so judgment has now increased with interest to some $21 million. As you can imagine, the Guardian is saying “Pay us the money” and New Times is saying, “Screw you, we’re appealing.”

You can make the case that New Times’ prospects aren’t good: A jury heard the case and ruled for the Guardian, and a judge doubled the penalties. On the other hand, to a lot of people, the ruling doesn’t make sense. Newspaper advertising is a different commodity than widgets, and I can testify from having worked there that the main plan for success involved putting out a better paper.

Whatever. In any case, after a recent hearing, stories have come out suggesting that New Times was about to be forced to pay or at least post as a bond the entire judgment. Locally, the Espresso Pundit has jumped on it. New Times has posted this response.

(Over the years New Times has bought up most of the major alternative weeklies in the U.S. and ultimately changed its name to Village Voice Media, after its most famous acquisition. Most people in the industry still call it New Times, and the company is run out of the New Times building downtown.)

New Times’ contention is that if the judgment were to be affirmed on appeal, it would in any case be held against the holding company of the San Francisco paper, which the company says doesn’t have much in the way of assets. In other words, it’s saying that its legal structure would prevent the Guardian from collecting its money.

This may all just be a fiercely argued lie, or maybe after the company loses the appeal a judge will say, “Oh, that’s just a financial facade”—I"m not a lawyer. But it’s also true the company lost the case two years ago, and nothing has changed in the years since to make a potential bankruptcy an issue. The hatred of the Guardian inside the company runs so deep that it’s hard to believe the case will be resolved any time soon.