HENDERSON, Nev, (Las Vegas Sun) -- Sun Publisher and Editor Brian Greenspun today sued Stephens Media, owner of the Las Vegas Review-Journal, in an effort to derail Stephens’ proposal to dissolve a long-standing business agreement in which it prints and distributes the Sun and shares advertising revenues with the Sun.
The agreement, known as a Joint Operating Agreement, was sanctioned by the Justice Department in 1989 to ensure that Las Vegas would have two independent newspapers with differing editorial points of view.
Stephens has offered to terminate the agreement in exchange for transfer of an Internet domain name. Three members of the Greenspun family agreed to accept the offer, according to court papers filed in support of Brian Greenspun’s lawsuit.
The Sun was founded in 1950 by Hank and Barbara Greenspun, the parents of Brian Greenspun. Brian Greenspun said the Joint Operating Agreement ensures a mix of editorial voices in a community that demands it.
Brian Greenspun’s lawsuit seeks a temporary restraining order and an injunction to halt the severing of the business agreement.
"The marketplace of ideas is as important to the United States as the marketplace of business," Leif Reid, one of Brian Greenspun's attorneys, said in a statement. "This is an effort to suppress both by the Las Vegas Review-Journal. The Review-Journal is attempting to eliminate the Las Vegas Sun's alternative editorial voice — not just in print, but also on the Internet. Paying to eliminate a competitor is clearly monopolistic and illegal."
Brian Greenspun also is represented by San Francisco attorney Joseph Alioto, whose specializes in antitrust and JOA issues.
"We consider there to be a substantial likelihood of success in light of the law, the facts of this case and the efforts of the Review-Journal to establish a monopoly in Las Vegas," Alioto said in a phone interview with the Sun.
Review-Journal Publisher Bob Brown, reached this afternoon, declined to comment.
The Sun signed the Joint Operating Agreement with Donrey of Nevada, Inc., then owner of the Review-Journal, "because the Las Vegas Sun was routinely unprofitable and operated at a substantial loss," the complaint says.
The agreement required the Review-Journal to print the Sun and handle all advertising operation for both publications, eliminating all of the Sun's significant expenses.
The Sun has not been in control of its print revenues since 1989.
In 2005, Brian Greenspun renegotiated the 1989 agreement, making the paper more profitable. The Sun receives an annual profits payment of $1.3 million.
The current agreement is set to expire Dec. 31, 2040, renewing itself for succeeding periods of 10 years.
But on June 23, 2013, Stephens Media made an offer to Las Vegas Sun Inc. to terminate the Joint Operating Agreement effective Sept. 1, 2013.
The deal would include Stephens Media's acquisition of the URL of the Las Vegas Sun’s website (lasvegassun.com) and the outright transfer of the URL lasvegas.com to the Greenspun family. The family had been paying an average annual fee of $2.5 million to Stephens Media for the use of the lasvegas.com URL.
Stephens Media also requested that Susan Fine, Janie Gale, Danny Greenspun and Brian Greenspun enter into a five-year noncompete agreement, in which every sibling would be paid $25,000 for staying out of the news business.
Fine, Danny Greenspun and Gale said they would be interested in terminating the agreement.
In court documents, Brian Greenspun said terminating the business agreement would violate state and federal antitrust laws and threaten the Sun's existence.
"The termination of the 2005 JOA will substantially lessen competition in the local newspaper market in the Las Vegas area by giving the LVRJ a monopoly in the Las Vegas local newspaper and newspaper website market," the complaint says. "The termination of the 2005 JOA, and impending closure of the Las Vegas Sun and its website, will have adverse effects on competition by, among other things, reducing output (both quantity and quality) of newspapers, increasing subscribers' costs to purchase a newspaper, and reducing the opportunities available for online advertisers."
-- Las Vegas Sun Staff