Want to Sue Rupert Murdoch? You'll Need $11M in the Bank, Even if You Win
If you want to sue News Corp. (NWS) and win, how much money do you need to pay your lawyers before Rupert Murdoch's company capitulates and signs on the dotted line? About $11.1 million per year, for at least four years, according to an SEC disclosure by grocery-coupon outfit Valassis (VCI).
Valassis recently won a $500 million settlement from News after alleging that its grocery coupon division, News America Marketing Group, had used predatory pricing tactics to maintain an unfair monopoly on supermarket advertising.
It's no secret that since the suit was filed Valassis has burned a major portion of its profits on lawyers dedicated to fighting Murdoch (pictured). In some quarters, its legal bills were greater than its net income. Even in profitable periods, lawyers took the equivalent of 23 percent of its profit. That gamble appears to have paid off in spades, of course.
In its Q4 2009 earnings statement, Valassis said it spent $2 million on legal fees. In Q3 it spent $2.5 million, and in Q1 and Q2 it paid $6.6 million. That totals $11.1 million. It's the same story at Insignia Systems (ISIG), a company with a similar claim against News that is chugging through $1.3 million in legal bills per quarter. That agency also fluctuates in and out of profit.
The litigation was hard fought. In all these cases, News either went to trial and lost or settled on the eve of a trial, or even during a trial. One witness was bankrupted by the proceedings, even though his lawyers' bills were paid for him.
The message from Murdoch seems to be: Legally, you may have a case. But you won't be able to make it unless you're willing to risk everything.
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