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Source Interlink Settles Suit Against AMI

Wholesaler agrees to terms with second publisher in antitrust case.



By Jason Fell
02/27/2009

Embattled magazine wholesaler Source Interlink said late Friday it has reached an agreement with American Media Inc. and its distribution service, effectively ending Source’s antitrust lawsuit against the publisher.

The agreement assures Source access to AMI’s publications, including National Enquirer, Shape and Star, the company said.

“We will now be able to restore the full line of AMI product to magazine racks across America,” Source chairman and CEO Greg Mays said in a statement. “We are happy to have concluded this legal process through an amicable settlement that ensures Source can continue to supply all our mainstream and specialty distribution clients with these popular titles.”

Source last week came to a similar agreement with Time Inc. and Time Warner Retail.

Source Alleges 'Conspiracy'

Earlier this month, Source filed a lawsuit in U.S. District Court in the Southern District of New York alleging that several major magazine publishers and rival wholesalers “conspired” to force the company to sell its distribution business at a steep discount to rivals Hudson News and News Group. Two days later, on February 11, the court awarded Source a temporary restraining order prohibiting publishers and national distributors from denying shipments to its magazine distribution business.

In January, Source and fellow wholesaler Anderson News announced separate 7-cents-per-copy price hikes. Publishers largely balked at the surcharge and refused to pay, upset at the wholesalers' sudden and "unilateral" decision to boost costs. Anderson has since ceased "normal business activity."

Also named as defendants in Source's suit are Bauer, Curtis, Hachette, Hudson News, Kable Distribution and News Group.

By Jason Fell
02/27/2009




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