It’s been easy of late to beat up on Village Voice Media, publisher of Seattle Weekly, New York’s Village Voice, Phoenix New Times and 10 other big free alternative weeklies. Caught in the epic meltdown of print advertising and with no subscription revenue, many of the papers, after rounds of layoffs, are editorial shells or worse of what they once were. (Since becoming New To Seattle last year, I have yet to hear anyone talk about a Seattle Weekly story, whereas its direct competitor, The Stranger, this year won a Pulitzer Prize for feature writing by Eli Sanders.)

VVM’s lucrative Backpage.com website has drawn criticism and lawsuits for sex-oriented ads described as conduits for child prostitution. Washington State passed a law, clearly aimed at Backpage.com, requiring age verification in sex ads, but VVM, which denies adding to the problem, got a federal judge to block it on free-speech grounds.

Now, in what is being called damage control, VVM is selling the weeklies to a new Denver-based company, Voice Media Group, owned by certain executives of VVM. Backpage.com, its hefty cash flow and its legal battles will stay at VVM, which is owned by Jim Larkin and Mike Lacey. They are the Phoenix-based Mutt and Jeff duo who over the past four decades amassed a mini-journalism empire as much through financial maneuvering as journalistic enterprise.

Larkin, who ran the business side, and Lacey, who oversaw editorial, are both in their mid-60s. After storied careers, it looks like they are retiring from journalism for good. Now, you’ll find a big split of opinion on them among journalists; in a commentary posted this morning on the online Seattle news site Crosscut, Seattle Weekly co-founder David Brewster called Larkin and Lacey “swashbuckling renegades,” which sounds about right. But I, for one, will miss them. In their day their papers produced good copy–and they themselves were good copy.

Especially Lacey, a New Jersey construction worker’s son who went to college at Arizona State in suburban Phoenix at the height of Vietnam and in 1970 co-founded New Times as an antiwar organ. The more sedate Larkin joined him two years later. Dropping out of college, they waged a successful proxy fight to take control of the paper, which became the mother ship for a string of kick-ass newspapers.

The first paragraph of my 1991 New Times Inc. profile for Forbes (an article not on the Web)  described Lacey as an “explosive, profane fellow” who, after a few drinks, had just punched out one of his employees. As a veteran business journalist, I can tell you, color doesn’t get much better than that.

A combination of must-read journalism (more contrarian than ideological, as it turned out), borrowed money and aggressive business tactics–including settlement of an antitrust lawsuit brought by the feds–allowed Larkin and Lacey to fashion the country’s largest alternative newspaper operation. It peaked with their 2006 purchase of the legendary Village Voice, the granddaddy of all alternative newspapers. In a reverse merger, New Times Inc. became Village Voice Media. The deal brought along Seattle Weekly, which within months saw dramatic staff changes.

But the same gonzo tactics that for the longest time worked so well for Larkin and Lacey might have proved to be their journalistic undoing.

In 2008, a San Francisco jury and judge hit VVM affiliates with what became a $21 million predatory pricing verdict for selling ads for its SF Weekly below cost with the intent of ruining a competitor, the Bay Guardian. In such antitrust litigation the intent part is often hard to prove, but Lacey actually made that quite easy. From the appellate opinion upholding the judgment:

[S]oon after the acquisition the executive editor of the New Times, Mike Lacey, disparaged the content of both the SF Weekly and the Guardian at a staff meeting, and announced that he wanted “the SF Weekly to be the only game in town.” The Guardian was considered the primary competitor of the SF Weekly. Lacey stressed that the New Times had “deep pockets,” with the financial resources to “compete very aggressively” with the Guardian and use “guerilla tactics” in rate battles. Lacey also emphasized that he was interested in improving the editorial quality of the SF Weekly. To increase circulation, additional salaried journalists were hired to bring higher quality “long form journalism” to the paper. The essence of Lacey’s message was that he wanted “to put the Bay Guardian out of business.”

After the California Supreme Court declined to hear an appeal, the case was settled last year on undisclosed terms that likely required VVM to cough up and borrow serious coin. Then, earlier this year, after the Backpage.com child prostitution scandal exploded and print advertisers fled, image-conscious investment bank Goldman Sachs sold back its minority stake in VVM. I’d guess this move put additional financial demands on the company and, with the continuing print ad revenue decline, got Lacey and Larkin thinking about how to cut their burden.

Some observers are wondering if the separation of the weekly newspapers and Backpage.com is a P.R. sham. Nobody has been especially forthcoming about the financing and legal details. While I can’t imagine that a lot of money changed hands, it looks to me like this is a real deal. Larkin and Lacey are going off into the sunset with the most valuable, if tarnished, part of their enterprise they built together.

Which will suit their personalities. They never cared much what the world thought of them, anyway, which was both their boom and bane.

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