John Locher / AP
This Dec. 17, 2015, file photo shows a sign outside the building housing the Las Vegas Review-Journal in Las Vegas.
Tuesday, Feb. 18, 2020 | 5:15 p.m.
A Clark County judge has confirmed an arbitrator's award ordering the Las Vegas Review-Journal to pay $1.6 million in damages, plus $261,000 in interest, to the Las Vegas Sun in the first phase of a multimillion-dollar judgment for violating terms of the joint operating agreement between the organizations.
District Judge Timothy Williams' judgment in the Sun's favor was entered into court files Tuesday. The judgment also confirmed an award of $40,666 in arbitration fees and costs to the Sun.
Late last year, Williams affirmed an arbitrator’s ruling that found the R-J’s practices deprived the Sun of millions of dollars in annual profit-sharing payments to which it was entitled under a joint operating agreement.
Williams also sided with the arbitrator’s ruling that the R-J violated the JOA by not including the Sun in promotional and marketing materials, and agreed with the arbitrator that the Sun deserved to audit the R-J to verify JOA payments made after Sheldon Adelson, the billionaire casino magnate and GOP benefactor, purchased the newspaper in late 2015.
The audit will determine the amount of further damages.
The $1.9 million is for the R-J’s improper inclusion of editorial costs, said Leif Reid, the Sun’s attorney.
“This is a confirmation that the Review-Journal committed financial improprieties intended to bleed the Sun dry and deprive it of resources necessary for its continued existence,” Reid said. “This is just another step in the Sun showing the R-J’s scheme to deprive it of the money it’s entitled to. This judgment shows that an arbitrator wasn’t buying what they were selling and a district court agreed. This is a requirement to pay up for something you did wrong.”
Benjamin Lipman, general counsel and vice president of legal affairs for the R-J, downplayed the award in an email Tuesday.
“As both parties know, the entry of the judgment is a mere technical formality,” Lipman said. “The judge already ruled on the arbitration issues, and each party has already filed its appeal challenging the portions of the judge’s ruling with which it disagrees.”
Lipman hinted that further appeals would be forthcoming, writing that “when this case is ultimately resolved, the Review-Journal will of course honor the final ruling.”
The JOA was created under the Newspaper Preservation Act, approved by Congress in the 1970s. That legislation provides limited antitrust protection for newspapers to combine business functions while remaining editorially independent.
The R-J last year filed a counterclaim attempting to dissolve the JOA under which the R-J and the Sun have operated since 1989. The counterclaim was in reaction to the Sun’s suit accusing the R-J of changing its front page and diminishing the Sun’s presence on it in a manner not allowed under the JOA.
When the R-J announced its plans, the Sun went to federal court and filed suit saying this effort and other R-J actions constituted an attempt to create an illegal monopoly in Clark County. The antitrust action alleges Adelson is attempting to stop the Sun from publishing and silence its countering editorial voice in Southern Nevada.
A federal magistrate judge is considering several motions, including one by the R-J to dismiss the case and one by the Sun for Adelson to be deposed. The suit won’t be affected by the state court judgment, Reid said.
The sides are scheduled to come before Williams again during a March 11 hearing.
