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October 18, 2017

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Review-Journal’s attorneys say ending deal with Sun wouldn’t create monopoly

Attorneys for the Las Vegas Review-Journal and its owner say the termination of a business agreement in which the R-J prints and distributes the Sun would not create a media monopoly.

The claim was filed in response to a lawsuit by Sun Editor and Publisher Brian Greenspun, who says R-J owner Stephens Media's efforts to dissolve a joint operating agreement between the two papers would effectively kill the newspaper his father, Hank Greenspun, started in 1950 and make Las Vegas a one-newspaper city.

A federal judge has temporary halted the attempt to dissolve the JOA. Stephens Media's response comes in advance of a hearing Friday to argue whether the Arkansas-based company can move forward with its plans.

Stephens’ response, filed Friday, points to a written declaration by Stephens Media President and CEO Michael Ferguson, claiming the Greenspun family could continue working in the local news market if the JOA were terminated. However, the family would have to do it without the financial support of Stephens Media, which now supplies the Sun with an annual $1.3 million profits payment under the agreement.

Stephens attorneys Donald J. Campbell and Colby Williams argue that Brian Greenspun’s lawsuit has no legal merit, saying the “case represents a poorly camouflaged attempt to transform a long-simmering family feud between the owners of the Las Vegas Sun newspaper.”

Greenspun’s lawsuit stems from a joint operating agreement approved by the Justice Department in 1989. The business agreement, which was renegotiated in 2005, guaranteed Las Vegas would have two independent newspapers with differing editorial voices. Greenspun Media Group, which publishes the Sun, receives a share of the R-J’s advertising revenue under the JOA.

But in an agreement made Aug. 7 with Stephens Media, Brian Greenspun’s three siblings voted to terminate the JOA in exchange for ownership of the URL, which the Greenspun company currently leases from Stephens Media for $2.5 million a year. The negotiations between Stephens Media and Brian Greenspun’s three siblings began in June without Brian Greenspun’s knowledge, according to his lawsuit.

The severance of that agreement would unburden Stephens Media from printing and delivering the Sun, which would effectively push the Sun out of business and create a media monopoly in favor of Stephens Media, according to court papers filed in support of Brian Greenspun’s lawsuit.

In his Aug. 21 lawsuit, Greenspun says the termination of the joint operating agreement, which was to expire in 2040 and renew every 10 years, would be a violation of antitrust laws.

“There can be no antitrust violation for an additional reason: the printed Las Vegas Sun is a failing newspaper, and its termination in the 2005 JOA cannot, therefore, harm competition,” the Stephens filing says. “A failing JOA newspaper is one which would be failing ‘if operated outside the JOA.’”

Brian Greenspun’s attorney, Joseph Alioto, says the response is ill-informed. The point of a joint operating agreement and the Newspaper Preservation Act is to maintain two independent papers with the understanding that one of them is struggling financially, he said.

Alioto said the response from Stephens Media is just the next chapter of its attempt to squeeze the little guy out of the picture.

“They’re afraid of a competitor growing. It’s like Richard III: Get rid of all the kids!” Alioto said. “It’s an ancient story. The kids will grow up. … The Sun is growing up financially. Its editorial voice is already grown up.”

In their filing, the Stephens attorneys later argue Brian Greenspun’s lawsuit “is predicated on multiple, material mischaracterizations.”

They target Brian Greenspun’s claim that he qualifies for relief from the courts under the Newspaper Preservation Act, the Sherman Act and the Clayton Act on the foundation that he “is a subscriber to the LVRJ/Las Vegas Sun and plans to continues to purchase a newspaper subscription” in the future.

Williams and Campbell claim that’s not true, pointing to business records that show Brian Greenspun receives a “complimentary” subscription.

“Brian Greenspun is not a paid subscriber to the Review-Journal/Las Vegas Sun as copies of the newspapers are delivered to him for free,” the filing says.

The Stephens’ court filing clarifies that, while the company has not drafted a final contract, the dissolution of the joint operating agreement would effectively end the annual profits payment, pay each of the Greenspun siblings $70,000 in severance pay and give complete ownership of the URL to the Greenspuns.

A hearing has been set for Friday, at which point attorneys for Brian Greenspun and Stephens Media will present their arguments in front of U.S. District Judges James C. Mahan.

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