Las Vegas newspapers battling over joint operation

AP News
Posted: Aug 21, 2013 7:01 PM
Las Vegas newspapers battling over joint operation

LAS VEGAS (AP) — The publisher-editor of the Las Vegas Sun has accused the company that owns the Las Vegas Review-Journal of trying to kill the cross-town rivalry with a bid to buy out his newspaper and Internet interests.

Sun Publisher Brian Greenspun alleged in a lawsuit filed Tuesday in U.S. District Court in Las Vegas that an offer from Stephens Media LLC violates federal antitrust law and a 1989 joint operating agreement overseen by the U.S. Justice Department.

"The Review-Journal was a monopoly in 1950 when my parents started this newspaper," Greenspun told The Associated Press on Wednesday. "They've been trying ever since to be a monopoly. My job is to keep the Las Vegas Sun as healthy as I can keep it, so southern Nevada has two competing and viable reportorial and editorial news products."

Mike Ferguson, Stephens Media CEO, scoffed at the claim that his company wants sole control of the Las Vegas newspaper market, and said it would "vigorously contest the unfounded allegations" of what he called a meritless lawsuit.

"To say that we are attempting to monopolize anything is utterly ridiculous considering the plethora of news and advertising sources available to Las Vegas residents and the realities of the modern media marketplace," Ferguson said. His statement was issued through Stephens Media and Review-Journal general counsel Mark Hinueber.

The Stephens Media buyout offer was accepted this month by a majority of the trustees of the Greenspun family trust that controls the Sun and its Internet properties. Brian Greenspun voted no.

The deal, which would be effective Sept. 1, would give ownership of the Stephens Media website to Greenspun entities that already control the travel booking website

"The terms ... contemplate that the Las Vegas Sun will cease operations as both a print and online newspaper," Greenspun's lawsuit says.

The complaint invokes the federal Newspaper Preservation Act of 1970, the Sherman and Clayton antitrust acts and Nevada's state Unfair Practice Act. It seeks unspecified damages, a preliminary court order to block the Stephens Media deal with Greenspun trustees and a permanent injunction to prevent the termination of the joint operating agreement.

A Justice Department official, Gina Talamona, declined immediate comment on the case.

Newspaper industry analyst John Morton of Jessup, Md., noted that the department will have to approve the deal.

Morton reviewed the lawsuit and said it appeared that Brian Greenspun was trying to resolve a family dispute by going after Stephens Media for making the buyout offer.

Stephens Media would pay $10 for terminating the joint operating agreement, and $70,000 each to Brian Greenspun and three other family trustees, according to the lawsuit.

"You're seeing the dominant partner in the JOA, Stephens, would much prefer not to have to print and produce the Sun," Morton said. He noted that most Stephens Media newspapers are in towns with no print competition. The company, formerly called Donrey Media Group and based in Fort Smith, Ark., was founded by Arkansas media mogul Donald W. Reynolds.

"I hate to use the word monopoly, because newspapers don't dominate the market as much anymore because of competition from the Internet," Morton said. "But all the profits still come from print."

Greenspun attorney Leif Reid said Wednesday that the lawsuit seeks to block a monopoly, and has little to do with the willingness of other trustees to accept the Stephens Media offer.

Reid, a son of Democratic U.S. Sen. Harry Reid of Nevada, noted that the newspaper operating agreement provides the Review-Journal with protection against antitrust claims.

"The JOA was a 50-year commitment that both parties benefited from," he said. "They're not keeping the deal, and all gloves are off."

"When they seek to void the JOA, they no longer have protection under antitrust laws to do what they're trying to do," Reid said.

The newspapers have separate reporting staffs in separate locations, with the Review-Journal handling combined advertising and circulation. The Sun used to publish in the afternoon, but after the operating agreement was amended in 2005 the newspapers have been printed and distributed together in the morning.

The Sun has since developed a robust online presence with its website. The disposition of that property after Sept. 1 wasn't made clear in the buyout, according to the lawsuit.

The combined Review-Journal and Sun circulate some 252,000 copies on an average weekday, according to March 31 figures from the Alliance for Audited Media.

The Sun won a Pulitzer Prize for public service in 2009.