Judge Approves Settlement In Shorewest Versus Journal Sentinel Case

September 29th, 2006

A Milwaukee County Circuit Court judge on Friday approved what he called a "generous" settlement that will provide millions of dollars in discounts to advertisers in the Milwaukee Journal Sentinel in a case where the newspaper was sued for overcharging for its advertising space.

The newspaper reached the settlement in May with Shorewest Realtors of Brookfield, the largest residential real estate brokerage in the Milwaukee area. A final hearing on the settlement was held Friday morning before Circuit Court Judge Richard Sankovitz.

Shorewest sued the Journal Sentinel in April 2005 claiming the newspaper overcharged for its advertising because rates were based on inflated circulation figures.

Journal Sentinel executives said they disagreed with Shorewest's claims, but agreed to settle the case to avoid extensive legal costs of pursuing a trial.

Shorewest and the Journal Sentinel reached the agreement after several meetings with a mediator in Philadelphia earlier this year. Shorewest was the lead plaintiff in what became a class-action case.

The newspaper, which is owned by Journal Communications Inc., Milwaukee (NYSE: JRN) has stated the agreement resulted in a $5.1 million shortfall in advertising revenue earlier this year and will cost an undetermined amount into 2007. The settlement calls for the newspaper to provide discounts on future advertising for some 187,000 commercial and individual advertisers who had purchased space in the Journal Sentinel between 1999 and 2005.

Sankovitz found that the settlement met the legal requirements that it was "fair, adequate and reasonable" and that there was no collusion between the parties in reaching the settlement.
Sankovitz said during the hearing that the newspaper's inflated circulation figures justified "a generous settlement."

"The settlement is the best that can be achieved in a case like this," he said.

Sankovitz also approved the Journal Sentinel paying $640,000 in Shorewest legal fees and a $10,000 incentive payment to Shorewest for its efforts in the case.

Reprinted from the on-line version of The Business Journal of Milwaukee, September 29, 2006