As we’ve already brought you several stories about the ongoing shenanigans of Motor Trend’s publisher and distributor Source Interlink, so we feel compelled to carry through with the unfolding events.
The latest news, as reported in the Down Jones SmartMoney wire service, is that Source has filed an antitrust suit against several publishers and competing distributors, after several publishers stopped sending their magazines (like People and Sports Illustrated) to Source for distribution.
The suit alleges that the defendants’, “indisputable goal is to destroy Source’s business so that defendants – through Hudson and News Group, the two remaining wholesalers – will monopolize the wholesale market and use that monopoly power to shift to retailers and consumers – and away from publishers – the entire financial burden resulting from worsening market conditions and publisher-induced inefficiencies in the distribution system.”
Listed as defendants are American Media Inc., Bauer Publishing Co., units of Time Warner Inc., and Hachette Filipacchi Media, which publishes major Motor Trend competitors Car & Driver and Road & Track. (We suggest you dig up your copy of The Da Vinci Code and start dreaming up conspiracy theories right away).
Other defendants listed are the competing distributors Curtis Circulation Co., Kable Distribution Services Inc., Distribution Services Inc., as well as wholesalers Hudson News Co. and The News Group LP. (For the record, AutoGuide is NOT being sued, despite a post by one of the company’s employees on our last story that we should “get ready to be served by lawyers.”)
Source claims the publishers and distributors acted to cut off Source’s supply of magazines and to spread a campaign of lies about the company’s financial situation.
“The goal of that coordinated campaign was to… put Source out of business,” the suit claims.
Either way, the suit looks like a real Catch 22 for Source. Win or lose the company has burnt its bridges with its entire customer base of publishers.
[Source: Dow Jones Newswire]