US judge to hear arguments in Vegas newspaper case

LAS VEGAS (AP) -- Las Vegas' position as a two-newspaper town was on the line Friday in a Nevada federal court, where a judge was hearing claims by the family publisher of the Las Vegas Sun that the parent company of the rival Las Vegas Review-Journal is trying to kill their joint operating agreement.

Sun Publisher and Editor Brian Greenspun wants a court order to block an offer from Stephens Media LLC to buy Sun newspaper and Internet interests from Greenspun and other family member trustees.

The deal would end publication of the print edition of the Sun, which is distributed as a six-to-10 page insert 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.

An early offer for Stephens Media to also buy the rights to the Sun website lasvegassun.com was off the table, company CEO Mike Ferguson said in recent court documents suggesting the Sun could continue to operate as an online news source.

Greenspun and his attorneys argue that the Internet news operation can't survive without revenue from the printed newspaper.

"The loss of the JOA and the loss of the printed Las Vegas Sun would, by extension, affect lasvegassun.com to the point that it would unable to exist," Greenspun said in August.

Greenspun alleges in his Aug. 20 civil lawsuit that ending a 1989 joint operating agreement overseen by the U.S. Justice Department would put Stephens Media in violation of federal antitrust law.

Ferguson denied Stephens Media was trying to form a monopoly.

There are dozens of other ways to get news in Las Vegas, he said, noting that three of four trustees of the Greenspun family trust that controls the Sun newspaper accepted a Stephens Media buyout offer on Aug. 7. Brian Greenspun voted no.

It wasn't clear if U.S. District Judge James Mahan would issue an immediate ruling Friday.

In a four-page order setting Friday's hearing, Mahan characterized Brian Greenspun as a dissident minority board member of the Greenspun Corp. and Las Vegas Sun Inc., "who disagrees with the business decision of the majority."

The judge expressed reluctance to oversee continuing newspaper operations in Las Vegas, and observed that other U.S. newspapers have ceased publication.

"The public seems to prefer the Internet as its source of information," Mahan said, pointing to cities including Seattle, Honolulu and Nashville, Tenn., that used to have two newspapers.

In court documents, Stephens Media attorneys called the printed Sun a financial drain that costs more than $1 million a year to produce and distribute.

They maintained that Brian Greenspun didn't have standing to sue in federal court because he doesn't subscribe but receives a complimentary edition of the newspaper.

Greenspun's lawyers said his lawsuit aimed to prevent the loss of competition and editorial voice, not collect damages.

The complaint invokes the federal Newspaper Preservation Act of 1970, the Sherman and Clayton antitrust acts and Nevada's state Unfair Practice Act. It seeks unspecified damages, a preliminary court order to block the Stephens Media deal with Greenspun's sibling trustees and a permanent injunction to prevent termination of the 50-year joint operating agreement. It is scheduled to run through 2039.

Everyone involved agrees the battle points to the future of the news business in an era in which newspapers are struggling and readers are turning to Internet sources for information.

Greenspun pointed to the effects of the Great Recession and said that since 2008 the amount the Sun receives in annual joint operations payments from Stephens Media has dropped almost 90 percent, from about $12 million to about $1.3 million a year.

"Elimination of the Las Vegas Sun would result in the loss of one of only two editorial and reportorial voices in the Las Vegas market," Sun attorneys said.

The joint agreement of June 1989 left the rival Las Vegas newspapers with separate editorial staffs, but combined advertising, publishing and distribution under the Review-Journal business operation.

At the time, there were 21 newspaper joint operating agreements around the country, Justice Department spokeswoman Gina Talamona said. She tallied six today, in Detroit, Charleston, W.V., Fort Wayne, Ind., York, Pa., Salt Lake City and Las Vegas.

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.

Talamona said federal Justice Department officials were reviewing the proposed changes to the Las Vegas joint operating agreement, but weren't involved in Friday's hearing.