Las Vegas Sun

July 29, 2014

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Sun Lawsuit:

Sun publisher takes new action against R-J’s owner

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Brian Greenspun

Las Vegas Sun Editor and Publisher Brian Greenspun has filed a new motion for a temporary restraining order against the owners of the Las Vegas Review-Journal over what he contends is a bid by the R-J to eliminate the Las Vegas Sun and gain a newspaper monopoly.

This is the second attempt by Greenspun to block a transaction between R-J owner Stephens Media and his three siblings, who in August voted to dissolve a long-standing business pact requiring Stephens to print and distribute the Sun.

U.S. District Judge James Mahan denied Brian Greenspun’s first request for a temporary restraining order and injunction on Sept. 6, when he ruled the antitrust lawsuit was premature because there was no “definitive contract or agreement” between Stephens Media and members of the Greenspun family.

Joseph Alioto, one of Greenspun’s attorneys, argued in court papers filed today that the judge would not have to wait for a finalized contract to grant a restraining order and injunction. Alioto contended that a letter of intent — signed Sept. 10, just four days after Mahan’s denial — was enough to illustrate a threat to the Las Vegas Sun and the local media market.

“This clearly puts out their intention of eliminating the JOA,” Alioto said. “Right after the judge made his move, people got together, wrote a letter and got it signed.”

The newest motion states: “Accordingly, if this Motion is not ruled upon immediately, (Stephens Media) will be able to put the Las Vegas Sun out of business and create a monopoly. … Closure of the Las Vegas Sun will result in irreparable harm that cannot be remedied with monetary damages.”

Stephens Media wishes to terminate the JOA by Dec. 31, 2013, according to the letter of intent, included in Greenspun’s latest filing.

The new motion presents similar arguments offered in the Aug. 21 lawsuit, contending the dissolution of the 24-year agreement would kill the Sun and turn Las Vegas into a one-newspaper city. The outcome, Alioto says, would break the very federal law that led to the creation of the business partnership in the first place.

Greenspun launched the initial litigation after Stephens Media offered to transfer the website lasvegas.com to the Greenspun family for its agreement to sever the joint operating agreement, which Stephens Media has found burdensome. The Greenspun Corporation currently leases the URL from Stephens Media for as much as $2.5 million a year.

But Brian Greenspun, who has been working without a salary since 2011, was unaware of any negotiations between Stephens Media and his siblings to close the Las Vegas Sun — until the family put the agreement to a vote Aug. 7. Brian Greenspun’s was the lone dissenting vote. He has since said he is willing to buy the newspaper from siblings Danny Greenspun, Susan Greenspun Fine and Janie Greenspun Gale. Hank Greenspun, their late father, started the newspaper in 1950.

From the start, Stephens Media has argued Brian Greenspun’s antitrust lawsuit to keep the JOA alive has no merit because there are print and online news sources that could substitute for the Sun in the Las Vegas market.

The letter of intent says a termination of the JOA would have no impact on the URL lasvegassun.com. The current JOA agreement does not limit or restrict how Greenspun Media Group uses the URL.

In a written response to Brian Greenspun’s suit, lawyers for Stephens Media listed Auto Trader, Bridal Spectacular, Las Vegas Pet Scene, Construction Notebook, several apartment guides and other niche publications as adequate substitutes for the Sun.

Brian Greenspun’s lawyers contend local television, local radio, the Internet, and nonprofit and community media are not equipped to fill the reporting and editing gap left behind when a newspaper fails.

“These mediums do not serve as a competitive substitute for newspapers,” according to one filing.

That need for competition built the foundation of the joint operating agreement at the heart of Brian Greenspun’s lawsuits. The JOA was struck to ensure that Las Vegas would have two independent newspapers with differing editorial points of view.

The U.S. Justice Department approved the JOA in 1989, binding the R-J to print and distribute the Sun and share advertising revenue. Operators of both papers amended the agreement in 2005 to allow the Sun to be distributed inside the R-J. The JOA is set to renew itself in 10-year increments and expire in 2040.

Under the current agreement, Greenspun Media Group, the Sun’s publishing company, receives a share of the R-J’s advertising revenue — most recently amounting to about $1.3 million a year.

Greenspun attorneys have anchored their arguments to the Newspaper Preservation Act, which was created by Congress to maintain the publication of newspapers in any community where publishers have drafted a joint operating agreement because one of the newspapers struggled financially.

The deal Stephens Media struck with the three Greenspun siblings would end the annual profits payment the Greenspun Media Group receives, pay each of the Greenspun siblings $70,000 in severance and grant the family full ownership of the URL lasvegas.com.

Brian Greenspun’s lawyers contend it also would cause irreparable harm to the Las Vegas community by effectively shutting down the Las Vegas Sun.

“The important role newspapers continue to play in a society is not to be underestimated,” one filing says. “Thomas Jefferson considered a free press so vital that he declared, ‘Were it left to me to decide whether we should have government without newspapers or newspapers without government, I should not hesitate for a moment to prefer the latter.’”

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