Sara Lee "Rape" Memo Returns to Haunt News Corp.

An infamous memo in which a Sara Lee marketing executive compared News Corp. (NWS) to a "rapist who enjoys it" has reared its head again -- this time, prior to a new upcoming trial on the issue of whether News uses anti-competitive practices in its supermarket-coupon agency. News wants the memo excluded from the trial on the grounds that it is irrelevant and/or prejudicial.

Most people don't know that in addition to owning Fox TV, the Wall Street Journal, MySpace and a raft of other media properties, Rupert Murdoch's News Corp. also owns an obscure but lucrative grocery-coupon ad agency, News America Marketing, that for years has dominated its field. Historically News America provided $350 million in annual operating income to its parent company (News no longer breaks out those numbers). The grocery-coupon category is a bare-knuckled business.

The undated memo, written by Sara Lee's former director of business services procurement Debra Lucidi (pictured), describes the fury that News America generated within Sara Lee over its pricing of grocery coupons. She uses words like "pissed," "livid," "intolerable" "unforgivable," "ludicrous," and "ridiculous" to describe dealing with News, which allegedly raised its prices for in-store advertising because Sara Lee did not let them keep a separate contract for newspaper coupons. The memo first emerged in a different case that News settled, preventing testimony about it. The most memorable sentence in the note describes what it is like being a News America client: "Feels like they are raping us and they enjoy it--"

(Click to enlarge.)

In the case, Insignia Systems (ISIG), a small grocery-coupon agency, is alleging that News uses price-gouging tactics to force advertisers to use both its newspaper coupon and its in-store advertising service. Clients who wanted one and not the other got exorbitant prices, Insignia claims.

In a pretrial motion, News argues that:

... even if Lucidi's notes were of any relevance and were otherwise admissible, which they are not, a reference therein to News America as a "rapist who enjoys it" should still be excluded ...
Given the "rape" statement's manifest potential for unfairly prejudicing News America and its lack of any probative value to the issues in this business dispute between two "in-store" advertising competitors, it should be excluded from the evidence
Insignia has yet to file a response. Lucidi is named as a potential witness by Insignia. Among the other potential witnesses are:
The trial is set for Jan. 3 in a Minnesota federal district court.


Images: Ruper Murdoch courtesy of Flickr user World Economic Forum, CC; Lucidi from Linkedin; Carlucci from Fordham University's media site.