Two rival newspapers duke it out in Surry County

by Amy Kingsley

In the TV town of Mayberry, every kind of small-town crisis received the same treatment: Attention by leading man Andy Griffith and a swift, tidy resolution.

But this summer, Mount Airy, the real life Mayberry at the foot of the Blue Ridge Mountains, is the setting for an unlikely newspaper drama that’s spawned more subplots than a season of “24.”

It began when Heartland Publications, a Connecticut media company, purchased 16 newspapers and several niche publications from Mid-South, a company based in Spartanburg, SC. Several papers in northwest North Carolina were included in the sale, including the Mount Airy News, Laurinburg Exchange, Elkin Tribune and On the Vine, a specialty wine publication.

At the time of the purchase, Heartland was a relatively young company, formed in 2004 with the acquisition of 24 newspapers in small and medium markets. Mid-South had been publishing more than a dozen papers in North Carolina for three generations.

After the sale, according to a complaint filed in Surry County Superior Court by Heartland Publications, several of the publishers became unhappy with the new arrangement and conspired to undermine their new boss.

In their initial meetings with Heartland representatives, publishers Mike Milligan of Mount Airy, Rebel Good of The Tribune in Elkin and Kevin Milligan – Mike’s son – of Laurinburg, appeared excited about coming to work for the new company. Heartland encouraged publishers to look for ways to trim expenses and the three happily complied.

In the complaint, Heartland said the publishers acknowledged they would have to either take a pay cut in their current positions or transfer to another branch of the company. They also agreed to cut their staffs. The publishers made lists of employees Heartland should not rehire when the company closed the deal in June.

Heartland operates its papers within geographical clusters by sharing editorial content within a defined region. On a recent weekday, that meant the front page of the Mount Airy News led with a story about a raid on a puppy mill in nearby Hillsville, Va.

All the Surry County publishers accepted jobs with Heartland Publications. According to the plaintiff, they agreed to cut their staffs and streamline operations within the cluster.

At the same time, according to Heartland, the publishers told their employees that the new owners would reduce their pay and increase their workload.

“If you think you’ve been working hard now, just wait,” Good said, according to the complaint. “It is going to get worse.”

Good and Mike Milligan didn’t just turn their staff against the new company, Heartland alleges, they also alienated their advertisers. Good, in particular, began to run the Tribune tight, refusing to add pages for content or authorize new projects.

At the same time the publishers in North Carolina undermined their papers’ viability, a publisher in Georgia acting in concert with the three in North Carolina e-mailed the new owners, demanding a non-compete contract worth $700,000.

On June 11, Heartland announced the purchase of the News, Tribune and other Mid-South assets, and Mike Milligan and Rebel Good told the employees they had handpicked for termination that they would not be hired by the new company.

Two days after the sale, The Tribune ran a story about a controversial vote to allow alcohol sales by the glass. According to Heartland, Good changed the headline to a large-font “YES!” The headline was intended to offend the Tribune’s conservative readers, Heartland said.

A week after the sale, Milligan and Good implemented the last stage of their dastardly plot, according to the complaint. Good ran the Tribune exceptionally short and deleted the circulation list for On the Vine, according to the complaint. Later that same day – a Monday – Good announced his resignation effective immediately, citing concerns with some of the policies in Heartland’s employee handbook. Special Sections Director Sara Byrd, reporter Brook Corwin and Neil Brown, manager of the composing department, followed him out the door.

Fifteen minutes after Good announced his resignation to Heartland, Mike Milligan sent an e-mail to Heartland declaring that he, too, was quitting. Fifteen employees, including Mike Milligan and Good, walked out that Monday evening. Two days later, Heartland officials discovered the password to one of the printing units in Mount Airy had been changed and the IT manager’s notebook taken.

Those resignations, coupled with the 15 terminations Heartland made in the Mount Airy cluster, effectively crippled the company’s operations in northwest North Carolina.

Around the same time, the publisher in Thomaston resigned, and Kevin Milligan, who was being transferred to Tennessee, quit. The younger Milligan had encouraged Heartland to consolidate some of its printing operations in Laurinburg, according to the complaint. After his resignation, the paper’s new owners discovered the printing press was already running at maximum capacity.

Kevin and Mike Milligan and Rebel Good did not just quit their jobs at Heartland Publications. Soon after the former publishers turned in their notice, they organized Surry Publishing Group, financed in part by Richard Vaughn of John S. Clark Co., a local construction giant. The articles of incorporation date the birth of the new company to June 21. In early July, Milligan and company introduced the first issue of the Messenger, a free Mount Airy daily. The masthead of the new publication featured a number of names familiar to readers of the Mount Airy News, including reporter Brook Corwin.

That is when Heartland filed its lawsuit in Surry County Superior Court. The company alleges that Surry Publishing Group engaged in unfair competition and seeks an injunction against the upstart newspaper and damages on the order of $10,000.

Mike Milligan, Kevin Milligan and Rebel Good denied engaging in any sort of monkey business before they left their brief employ with Heartland Publications. Instead they depict the decision to form Surry Publishing as an experiment in good old-fashioned corporate competition. Never mind the fact that all but the biggest American cities have reverted to one newspaper towns, they wanted to prove that little Mount Airy – pop. 8,000 – could support two daily newspapers. Several other employees who walked out of the Mount Airy News and The Tribune found work at The Messenger.

The defendants, who are represented by Ron Davis, claimed in their response that they were not bound to Heartland by any sort of contract. The former publishers also denied allegations they handpicked employees for termination. Heartland aggressively attacked costs by firing employees who had spent years at the newspapers, they said.

Mike Milligan, Kevin Milligan and Rebel Good cited standing Heartland policies that included forbidding employees’ spouses from visiting the office without clearance and permitted searches of vehicles and personal belongings.

It was such rules, and Heartland’s abrupt termination of longtime employees, that drove the defections and subsequent formation of Surry Publications, the defendants said. Throughout the legal proceedings, the defendants have argued their right to seek satisfying work. The lawsuit, they argued, is just a ploy to shut down an unwelcome competitor.

The lawsuit moved a step closer to resolution last week when Heartland agreed to drop its demand that Surry Publishing not employ former Mid-South employees for 30 days in exchange for the return of circulation and advertiser lists. The principals of Surry Publishing have argued all along that the lists are public record, not protected trade secrets.

The parties are still at odds over the issues at the heart of the lawsuit, which is likely to drag on until at least next summer, Davis said.

In the meantime, both papers are publishing on the same schedule. The News has resuscitated its staff and the Messenger continues to plug along, reporting the news from Mayberry, as the lawsuit lurches slowly to resolution.

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