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Controversy

In March of 2006, the Argus Leader came under fire for attempting to control distribution rights within the city of Sioux Falls.
The Argus Leader through a subsidiary company, News Center Distribution (NCD), had local businesses sign contracts saying that the Argus Leader controlled the publications to be distributed in their businesses.
The agreement allowed the Argus Leader to display and give away its free publications like Live, PetMag and City Style. Other independent publishers such as Prime, Renter’s Guide, the Shopping News and others would have to pay the Argus Leader a fee to distribute their publications.
But if the independent publishers didn’t pay the Argus Leader, they threatened to physically take their competitors magazines out of contracted businesses.
The Argus Leader’s move was viewed as a violation on First Amendment rights after they gained exclusive contracts to control distribution on property managed by the city of Sioux Falls. The City of Sioux Falls called the Argus Leader’s contracts with the city owned property: “A reasonable restriction on free speech.”
City lawyers said there was legal precedent to back up the move. They cited, ironically, cases where Gannett(the parent company of the Argus Leader) had sued and lost to gain access to the same type of property.
But when the controversy was made public, the city council canceled the contract with the Argus Leader distributor. The council said such a contract was a move in the direction of limiting free speech.
As for the private businesses that signed contracts with the Argus Leader distributor, many of them weren’t aware of what they had signed and said that they were mislead or confused by what the Argus Leader distributors had told them.
And the contracts themselves were shown not to hold much weight either. A local lawyer said that if a client had brought the contract to him for review, he would tell them, “They were crazy to sign it.”