LOS ANGELES Feb 9 Magazine wholesaler and
publisher Source Interlink Co Inc SORC.O on Monday asked a
New York federal court to stop rivals from trying to drive it
out of business, according to court papers.
Source Interlink, controlled by billionaire Ron Burkle,
said it needs emergency court intervention to stop the
defendants, including publishers Time Inc and Hachette
Filipacchi, distributors, and rival wholesalers from
monopolizing the U.S. wholesale magazine distribution market.
Source accused the defendants of cutting off its access to
People, Sports Illustrated, Entertainment Weekly, Time and
other magazines, and spreading "disparaging rumors" about its
financial condition to its retailer clients, the filing said.
Source said the scheme arises from its efforts to charge a
7 cent per copy distribution fee to recoup costs of retrieving
unsold inventory from retailers, tabulating and destroying it.
Source tried to impose the fee in January but had to
rescind it when publishers and distributors resisted, the
A short time later, the magazines "cut Source off from its
supply of magazines" and told its customers that it was in
"deep financial trouble", the filing said.
The "conspirators" wanted to force Source to sell its
distribution infrastructure at a steep discount to rivals
Hudson and News Group, which were colluding to take over
Source's west coast, mid-Atlantic and midwestern territories,
the filing said.
Source accused its rivals of charging retailers higher
prices for the same products as the competitive market shrinks,
the filing showed.
The defendants named in the case were American Media Inc,
Bauer Publishing Co, Curtis Circulation Co, Distribution
Services Inc, Hachette Filipacchi Media U.S., Hudson News Co,
Kable Distribution Services Inc, the News Group LP, Time Warner
Inc's (TWX.N) Time Inc and Time/Warner Retail Sales & Marketing
Representatives for Bauer and Kable had no immediate
comment. The remaining defendants could not be reached for
comment after hours.
(Reporting by Gina Keating; editing by Richard Chang)