The Federal Trade Commission staff has launched an investigation of circumstances surrounding the purchase by the Washington Post Co. of the defunct Washington Star's printing plant, according to spokesmen for both companies.
The purchase of the plant and other Star assets, owned by Time Inc., was announced on Sept. 2 and informed sources said at the time the purchase price was between $13 million and $15 million. Since then, The Post has begun using the Southeast D.C. facility for printing.
"We have received a request from the FTC staff for information relating to the sale of certain of the Star's assets to the Post and we will respond to that request for information," said Time spokesman Louis Slovinsky, responding to a query.
A Post official issued a similar statement, saying that the company has received a "routine staff inquiry" from the agency, which shares federal antitrust authority with the Department of Justice. "We will cooperate in responding to that request for information," said Boisfeuillet Jones, the Post's vice president and counsel.
Although FTC officials refused comment, noting that the commission does not comment on pending matters, industry sources said the probe is likely to focus on the competitive consequences of the Post's purchase. One industry expert said the government might be investigating whether the purchase blocked others from using the Star facility and beginning a competitive newspaper after the Star closed in August.
One of those potential bidders was Llewellyn King, publisher of a newsletter, Energy Daily. King said that he had put together a consortium prepared to make a bid of more than $20 million for the Star plant. That consortium was within hours of putting its formal bid before Time officials when the facility was sold, he said. King said he "could not fault" the Post's action.
But John R. Malone, a Chicago based economic consultant who was a member of King's group said it was an "absolutely unnecessary closing." Malone said the group could have made a proposal of "at least $20 million" for the plant and another $5 million to $6 million for the paper itself.