News America's Carlucci Again Accused of Threatening to "Destroy" Floorgraphics

By: Jim Edwards

(MoneyWatch) George Rebh, founder of Floorgraphics, said News America Marketing CEO Paul Carlucci threatened to "destroy" his agency if he competed for clients, a Michigan state court heard. The testimony came in a case where newspaper coupon giant Valassis is trying to prove that News America used illegal monopoly practices against its competitors.

It is the second time that Rebh has told the story of his infamous meeting with Carlucci, who is also the publisher of the New York Post. Earlier this year, Rebh testified in a New Jersey federal court that he had a lunch meeting with Carlucci at which the latter had said "I will destroy you!" if Rebh's Floorgraphics made inroads into News America's in-store supermarket ad empire. Carlucci denies he said that.

In Rebh's most recent recollection of the meeting, he described how he showed up at the now defunct Dish of Salt restaurant (pictured) in New York, just blocks from News Corp's HQ. In attendance at the round table were Carlucci, News America president Dominic Porco, Floorgraphics' Rebh, his brother Richard, the CEO, and Gary Henderson. The execs talked business in which, Rebh said, he hoped to explore the possibility of working on joint promotions with News America. But Carlucci didn't like that idea. He wanted to buy Floorgraphics, Rebh said:

Question: What happened? What did he say?

Answer: At a certain point, Mr. Carlucci turned to us, but primarily Richard, and said so you are here to sell your company. And that -- because that was not the purpose we were there, that kind of took us a little by surprise and Richard said, no, that's not why we came.

... Question: What did Mr. Carlucci say in response to that?

Answer: He kind of smiled and he said, you know, when we acquired ActMedia, which was in 1997, I asked them about what they thought of floor advertising and they all thought it was a fad, that it would go away. He said, words to the effect, but, I have always liked floor advertising, so, from this point on consider us your competitor. And he said, again, words to the effect, and you should know that I work for a man who wants it all and doesn't understand anyone telling him he can't have it all. And know this, if you ever get into any of our businesses, I/we will destroy you.

That "man" is News Corp. chief Rupert Murdoch; News Corp. owns News America. News America ultimately acquired Floorgraphics in settlement of the latter's anti-competition case against it.

The trial continues.

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