National Newspaper Association disappointed with Court's ruling on Valassis NSA

Nov 15, 2013

National Newspaper Association Robert M. Williams Jr, expressed his disappointment today with a decision by the Court of Appeals for the District of Columbia Circuit that affirmed the Postal Regulatory Commission’s (PRC) handling of the Valassis postage discounts last year.

“The Court did not say it agreed with the Postal Service’s decision to grant special discount rates to this large direct mailer. It simply said it would not disrupt the expertise of the PRC,” Williams said. “That is the posture federal courts normally take in regulatory matters. But we believed, and still believe, that the Commission’s analysis of the antitrust issues in this case was flawed.”

NNA joined the Newspaper Association of America last year in appealing the PRC’s grant of deeply discounted rates through a Negotiated Service Agreement (NSA) to Valassis for launching of a weekend direct mail program intended to pull advertising out of newspapers and into the direct mail stream. Vigorous industry protest against the decision resulted in heavy litigation at the PRC and the courts, and objections on Capitol Hill, where many members of Congress raised concerns about the deal.

The Postal Service has not yet provided a report to the PRC on the status of the Valassis NSA.

"We believe this unfair alliance will still not be successful," said Williams, noting that plans by Valassis have not materialized as planned. "Valassis has long been one of the newspaper industry's largest customers themselves and I believe they will find no better vehicle for retailers than newspapers."

In an earnings call with investors in October, Valassis CEO Robert Mason declined to comment on the success of the weekend program, branded as Spree. He said “we have packages in markets… (W)e’ll make a determination where it goes in terms of rollout by the end of this year.”

Williams said the next step is up to Congress.

“Many members of Congress have told our member newspapers that they do not want the nation’s postal system to play off one private industry against another in the advertising marketplace,” he said. “NNA certainly believes USPS owes it to newspapers not to intentionally attack our businesses. We have maintained an effective partnership with the Postal Service for more than 100 years. This Valassis deal tarnished that relationship. We hope USPS now understands how deeply newspapers feel about fair play in the advertising markets. ”