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Time Inc. Strikes Deal with Source Interlink

Mega-publisher reaches distribution agreement with wholesaler.



Bill Mickey By Bill Mickey
02/19/2009

Time Inc. announced today that it has reached an agreement with Source Interlink to distribute its magazines. The agreement effectively settles Source's antitrust lawsuit with Time Inc. and Time Warner Retail.

The publisher was one of the first companies to publicly state that it would stop using Source to distribute its titles as a result of the wholesaler's decision to increase per-copy distribution fees by 7 cents. Anderson News, which has since ceased its magazine distribution operation, also threatened publishers with a 7-cent surcharge.

Last week, Source Interlink was awarded a temporary restraining order in its anti-trust lawsuit against several major magazine publishers and rival wholesalers, including Time Inc. The order, granted by the U.S. District Court for the Southern District of New York, prohibited publishers and national distributors from denying shipments to Source.

Under the new, multi-year agreement, Time Inc. will not have to pay the per-copy fees.

"This agreement is effective immediately and assures that we can continue to supply all our mainstream, specialty and international customers with the popular Time titles," said Source chairman and CEO Greg Mays in a statement.

RELATED STATEMENTS: Time Inc. | Source Interlink

American Media, Bauer, Curtis, Hachette, Hudson News, Kable Distribution and News Group were also named in the Source suit, which a spokesperson said is continuing.

A request for comment from Curtis was not immediately returned.

One factor that may have contributed to the quick settlement between Time Inc. and Source was retailer resistence to change. Wal Mart, for one, had stood behind Source Interlink as its wholesaler of choice. "The retailers basically bought the argument from Source that it was a plot to divide the country into two wholesalers which would set the terms for the business," said one newsstand source. 

Check FOLIOmag.com throughout the day for updates to this story.

Bill Mickey By Bill Mickey
02/19/2009




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