A subsidiary of Pacific Inland Bancorp may invest $1.5 million to $3 million to rescue U.S. Law News, the San Juan Capistrano legal newspaper that has been struggling since September to publish a single issue.
If the subsidiary--Pacific Inland Venture Partnership--decides to invest, it probably will provide financial backing in a joint venture with U.S. News & World Report, which would add its name, management expertise and publication resources, said Eugene Anton, vice president of the Anaheim investment concern.
"The lawyer market is strong . . . (and) there's lots of money to be made in the publications industries," Anton said. "On the other hand, there's a lot to lose, so we're being really cautious." Pacific Inland Bancorp is also the holding company for Pacific Inland Bank of Anaheim.
Since late last year, observers and former staffers have predicted that U.S. Law News must team up with a major financial backer to survive. The deal now under negotiation with Pacific Inland Venture and U.S. News & World Report would move the newspaper to Washington while infusing badly needed cash and management.
When U.S. Law News was announced last September, its backers touted it as the nation's largest-circulation law newspaper, with 250 editors putting out a 24-page paper and 20 additional specialized sections. The company projected combined advertising and circulation revenues of almost $15 million for the first year of operation.
But since then, the paper has published just three prototypes and 13 issues of Student Law News, a 12-page tabloid that was distributed to 5,000 law students.
Full-Time Staff Laid Off
While U.S. Law News has been furiously searching for a backer, its fiscal woes over the last several weeks have gotten worse.
The paper is now several months behind in its rent and reportedly has been hit with five state claims for unpaid wages totaling at least $10,000. The company has laid off every full-time employee from a staff that once numbered about 20, and it recently lost its long-distance phone lines. Last month, U.S. Law News also gave up access to Lexis and Nexis, two nationwide computer data bases that were to provide information to the paper's subscribers.
Gary H. Smith, the company's president and co-founder, confirmed that the full-time staff is now down to himself and H. Reese Butler II, editor and publisher, who developed the concept of a law newspaper that offered computer access to recent court rulings.
Smith added that U.S. Law News is "obviously trying to get financing, and when we do, we're going to publish again."
In Washington, Fred Drasner, president of U.S. News & World Report, said that negotiations with U.S. Law News are "on the back burner because of more pressing things" at the national weekly newsmagazine.
Anton said that Pacific Inland Venture should decide in six to eight weeks whether it wants to invest.