US judge won't stop Vegas newspaper buyout bid
Sep. 06, 2013
LAS VEGAS (AP) — The corporate owners of the Las Vegas Review-Journal cleared one hurdle Friday in a bid to buy out the family publishers of their cross-town rival and end a joint operating agreement with the Las Vegas Sun.
But the family member who runs the Sun promised to keep trying to block Stephens Media LLC from buying the newspaper his father started in 1950 and killing the agreement signed in 1989.
"I believe in this city. I believe in two newspapers. I don't have a choice," Sun Editor-Publisher Brian Greenspun said. "What I heard from the judge is, come back with an agreement. This is round one."
U.S. District Judge James Mahan spoke nostalgically about living in a two-newspaper town, then decided that it was too early to block Stephens Media from trying to buy Sun newspaper and Internet interests from four Greenspun family member trustees.
In a courtroom filled with Review-Journal supporters on one side and Sun backers on the other, the judge rejected a request for an injunction from Greenspun, the lone holdout among his siblings in the buyout deal.
Brian Greenspun's brother, Daniel Greenspun, sat in the back of the courtroom and declined comment.
Daniel Greenspun was one of three Greenspun siblings who agreed on Aug. 7 to preliminary terms of a deal to sell their Sun interests to Stephens Media for $10, a one-time payment of $70,000 apiece, and the lifting of an ongoing $2.5 million per year license fee for an Internet website. He was not a party in his brother's lawsuit against Stephens Media.
The sale would end publication of the Sun newspaper — which is distributed as a six-to-10 page daily insert in the Review-Journal — and give ownership of the Stephens Media website lasvegas.com to Greenspun companies that already control the travel booking website Vegas.com.
The Sun website lasvegassun.com and a bid to have Greenspun family members sign a non-compete clause were off the table, Stephens Media attorney Donald Campbell told the judge.
Campbell suggested the Sun could continue to operate as an online news source, competing with dozens of broadcast stations, websites and blogs.
"We would encourage the Las Vegas Sun to continue with their newspaper on their website," he said. "That has nothing to do with antitrust."
Greenspun and his attorneys argue that the Sun online news operation can't survive without revenue from the newspaper, and that Stephens Media wants to monopolize the Las Vegas news market. They say ending the joint operating agreement overseen by the U.S. Justice Department would lift antitrust protections afforded by the Newspaper Preservation Act of 1970 and violate federal antitrust law.
The 50-year joint agreement runs through 2039. It left the rival newspapers with separate editorial staffs, but combined advertising, printing and distribution under the Review-Journal business operation.
When the agreement went into effect, there were 21 newspaper joint operating agreements around the country, Justice Department spokeswoman Gina Talamona said.
She said six remain, in Detroit, Charleston, W.Va., Fort Wayne, Ind., York, Pa., Salt Lake City and Las Vegas.
Justice Department officials were reviewing proposed changes to the Las Vegas joint operating agreement, Talamona said.
Eric Witkowski, the Nevada state attorney general's consumer advocate, observed the proceedings and declined comment.
Greenspun attorney Joseph Alioto of San Francisco urged Mahan to stop the Stephens Media effort. The Newspaper Preservation Act clearly prohibits one partner in a joint operating agreement from buying the other, he said.
Instead, Mahan, who began the hearing lamenting the slow death of the Las Vegas Sun, ended saying that he had no dispute to decide.
"There's no contract here. There's no agreement," the judge said. "I think the suit is premature."
Mahan noted that he gave both sides advance notice of his opinions in a four-page order Aug. 27 that characterized Brian Greenspun as a dissident minority board member in the Greenspun Corp. and Las Vegas Sun Inc.
The judge outlined his reluctance to have the court oversee Las Vegas newspaper operations and noted the deaths of newspapers in cities including Seattle, Honolulu and Nashville, Tenn.
Mahan also mentioned the passage of Newsweek and U.S. News and World Report magazines, and said he thought the public preferred to get news from the Internet and television.
"I prefer a two-newspaper town. Not because of the two political parties ... but because the two newspapers emphasize different things," the judge said. "But the times are changing."
Stephens Media attorneys have called the printed Sun a financial drain that costs more than $1 million a year to produce and distribute.
Greenspun pointed in court documents to the effects of the Great Recession and said that since 2008 annual joint operation payments from Stephens Media to the Sun have dropped almost 90 percent, from about $12 million to about $1.3 million a year.
A 2005 amendment to the Las Vegas agreement ceased afternoon publication of the Sun. The combined newspapers circulate some 252,000 copies on an average weekday. The Sun no longer has a printing press.