As scores of target and niche advertising vehicles continue to draw advertising revenue away from newspapers, the potential for conflict keeps expanding. In a recent example, Oct. 22, the Daily Progress, Charlottesville, Va., filed a lawsuit in state court alleging that beginning in February 2006, four area real estate companies and four of their officers "willfully and maliciously" participated in an illegal boycott and conspired to keep Alabama real estate listing out of the Daily Progress.

The 32,316-circulation daily is seeking up to $ 52 million in damages. The lawsuit claims that the real estate companies collectively agreed to place "substantially all" of their advertising in the Charlottesville Area Real Estate Weekly, a publication owned by a corporate subsidiary of the Charlottesville Area Association of Realtors Inc.

CAAR is composed of approximately 120 real estate companies and 800 individual agents who do business in the Charlottesville area. The defendants in the Daily Progress suit all are members of CAAR. The CAAR-sponsored weekly claims a circulation of 12,000. It is distributed free to 280 news boxes, 120 stores and other distribution points in the Charlottesville area. The Daily Progress claims that by placing their ads in the weekly, the real estate companies attempted to increase profits at the public's expense, fix prices, restrict real estate services available in the surrounding area and eliminate competition. According to the suit, the four companies account for a total of 50% of the area residential real estate market. "We have a free-market system in this country," said Dennis Rooker, attorney for the Daily Progress, "but competitors compete against each other, they don't band together. The essence of this claim is the concerted activity."

Michael Urbanski, counsel for one defendant and acting spokesman for the group, said, "There is simply and absolutely no basis" for the claim of an organized boycott. The group of real estate companies has filed a countersuit, contending that actions that the paper has taken, including the lawsuit, are an attempt to "maintain a monopoly on newspaper advertising in the Charlottesville-Albemarle County area and to defame the reputations of the defendants." The countersuit claims that by use of its "monopoly power," the Daily Progress set advertising rates "at excessive and anticompetitive levels" and provided "inattentive and inferior advertising services" to customers. Percy Montague, one of the defendants in the Daily Progress suit, said the real estate agents and companies "are customers of the paper, not competitors, but the paper is suing us as if we were competitors."

Montague said, "As members of the CAAR, (the agents) indirectly own a portion of the weekly and I find it hard to believe that we wouldn't be allowed to choose to advertise wherever we want. "If one of those choices happens to be something that we have an indirect interest in, then so much the better," he added. The impetus for the weekly came in 2005, when CAAR's board formed a task force to study cost-effective advertising methods. After members approved creation of the weekly, several pledges of advertising were gained from a majority of CAAR member agencies.