Las Vegas Sun

April 19, 2014

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Justice Department opens probe into Stephens Media over monopoly concerns

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Brian Greenspun

The Justice Department is investigating the legality of Stephens Media’s efforts to terminate a business agreement in which its Review-Journal prints and delivers the Las Vegas Sun, according to an attorney for Sun Editor and Publisher Brian Greenspun.

Joseph Alioto, an antitrust lawyer hired by Greenspun to thwart Stephens’ efforts to end the business deal, said Thursday the Justice Department told one of his attorneys it is launching an investigation “with regard to the illegality of the termination” of the joint operating agreement.

“It pinpoints how important the issue is,” Alioto said. “I have no doubt that the attempt to eliminate the JOA is illegal on its face.”

The business agreement, in which the Review-Journal handles the Sun newspaper’s business and production matters and shares advertising revenue with the Sun, was signed in 1989 with the blessing of the Justice Department. Such agreements are intended to help struggling newspapers that provide an alternative editorial voice in a community that would otherwise be left with a newspaper monopoly.

A Justice Department investigation would prohibit any action by Stephens Media for at least 60 days, Alioto said.

Donald Campbell, an attorney for Stephens Media, was not immediately available for comment. The Justice Department declined to comment.

Greenspun sued Stephens Media after the company made a deal with Greenspun’s three siblings to transfer the website lasvegas.com to The Greenspun Corporation in exchange for their agreement to eliminate the joint operating agreement, which Stephens Media has found burdensome. The Greenspun Corporation leases the URL from Stephens Media for $2.5 million a year, but receives a share of the Review-Journal’s advertising revenue which this past year amounted to $1.3 million.

Brian Greenspun voted against the agreement. He has said he is willing to buy the newspaper from his siblings, Danny Greenspun, Susan Greenspun Fine and Janie Greenspun Gale. Their father, Hank Greenspun, started the newspaper in 1950.

Attorneys on both sides have since sparred back and forth with court filings.

Greenspun maintains that Stephens is trying to break the JOA, which was set to expire in 2040, in order to put the Sun out of business and create a media monopoly in the valley.

Stephens countered that there are other, special-topic media in the Las Vegas market to fill the void if the Sun were to stop publishing. But Greenspun attorneys Alioto and Leif Reid contend that no niche media — including ones that target dog fanciers, car buyers and brides — can replace the Sun as a vital source of news.

U.S. District Court Judge James C. Mahan granted Greenspun’s request for a temporary restraining order until the merits of his request for a permanent injunction to block the JOA’s dissolution are argued. That hearing is set for Friday.

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