Las Vegas Sun

September 16, 2014

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Judge rejects Sun’s second bid to freeze plans for newspaper breakup

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Brian Greenspun

A federal judge today denied a second attempt by Las Vegas Sun Editor and Publisher Brian Greenspun to prevent what Greenspun contends is a bid by the Las Vegas Review-Journal to gain a media monopoly in Southern Nevada.

U.S. District Judge James C. Mahan rejected Greenspun’s request for a temporary restraining order to block the termination of a joint operating agreement in which Stephens Media, the parent company of the Review-Journal, prints and distributes the Sun.

Mahan ruled that the matter was “still not ripe for review” by the court because there had been “no definitive contract or legal agreement providing for termination of the JOA,” according to court documents.

Greenspun’s attorney Joseph Alioto said the case is headed for the 9th U.S. Circuit Court of Appeals in San Francisco.

“What the judge says is there has to be a signed and sealed contract,” Alioto said. “We believe that’s incorrect as a matter of law.”

Mahan’s ruling mimics his Sept. 6 decision in which he said an antitrust lawsuit filed Aug. 21 by Greenspun was “premature” since no letter of intent or contract regarding the JOA had been signed.

Greenspun and Alioto made their second request for a restraining order earlier this month after Greenspun’s three siblings signed a letter of intent to terminate the JOA. The four Greenspun siblings control both the Las Vegas Sun and the Greenspun Corporation.

Mahan, however, now says that the letter of intent is not enough to grant an order halting the dissolution of the JOA.

“Upon review of plaintiff’s motions, it appears that the only difference between the circumstances as they existed at the time of his first motions and as they stand now is that the letter has been signed by the parties,” Mahan’s ruling states. “However, the court is unpersuaded that the presence of the signatures on the non-binding letter of intent somehow transforms this matter into one ripe for review.”

Alioto and Brian Greenspun argue that dissolving the 24-year-old JOA would kill the Sun. They say it also would run counter to the Newspaper Preservation Act, the federal law that originally led to the creation of the JOA.

Stephens Media hopes to terminate the JOA by Dec. 31, as stated in the letter of intent. The agreement does not include the URL lasvegassun.com. The JOA doesn’t limit or restrict how Greenspun Media Group uses the website.

Brian Greenspun first sued Stephens Media after the company offered to transfer the URL lasvegas.com to the Greenspun family in exchange for an agreement to end the JOA, which Stephens Media has found burdensome. The Greenspun Corporation leases lasvegas.com from Stephens Media for as much as $2.5 million a year.

Brian Greenspun says he was unaware of the agreement between Stephens Media and his siblings until just before the family voted on the proposal Aug. 7. He cast the lone dissenting vote, and he has since said he is willing to buy the newspaper from siblings Danny Greenspun, Susan Greenspun Fine and Janie Greenspun Gale. Their late father, Hank Greenspun, started the Sun in 1950.

The JOA was created to ensure that Las Vegas would have two independent newspapers with differing editorial points of view.

The U.S. Justice Department approved the agreement in 1989, requiring 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, which most recently amounted to about $1.3 million a year.

Stephens Media has argued Brian Greenspun’s lawsuit to keep the JOA alive has no merit because other print and online news sources could substitute for the Sun. Stephens’ lawyers 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 argue that local television, local radio, the Internet, nonprofit and community media are not equipped to fill the reporting and editing gap left behind when a newspaper fails. They anchor their argument to the Newspaper Preservation Act, 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 Greenspun Media Group receives, pay each of the Greenspun siblings $70,000 in severance and grant the family full ownership of the lasvegas.com URL.

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

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