A federal judge on Friday declined to block a plan to eliminate a 24-year-old agreement governing operation of Las Vegas’ two daily newspapers, saying the two parties don’t yet have a signed contract so any action would be premature.
In denying a request by Las Vegas Sun Publisher and Editor Brian Greenspun for a temporary restraining order and preliminary injunction to halt dissolution of the newspapers’ joint operating agreement, U.S. District Judge James Mahan said it is too early for any lawsuit to be filed.
“There isn’t a contract, there isn’t an agreement,” Mahan ruled after nearly an hour of arguments by attorneys representing Greenpsun and Stephens Media LLC, owner of the Las Vegas Review-Journal.
Mahan didn’t suggest how he might rule in a challenge of an expected deal to end the joint operating agreement, but at the outset of the hearing, he expressed concern about the court becoming involved in the Greenspun family’s dealings with its own property.
“This is just the sort of case that courts have eschewed becoming involved with,” Las Vegas attorney Don Campbell, representing Stephens Media, told the judge.
Brian Greenspun sued Stephens Media last month, alleging the company conspired with his three siblings to end the joint operating agreement put in place in 1989 and amended in 2005. Under the agreement, the Review-Journal oversees all business aspects of the two newspapers, which maintain separate editorial staffs. The Sun is published daily as a 6- to 10-page insert in the Review-Journal.
While Greenspun has challenged a move to dissolve the agreement, Campbell told the court that a letter of intent is all that currently exists in the matter.
“We don’t have a fully executed letter of intent at this standpoint, let alone a signed contract,” Campbell said after the hearing. “We still have to negotiate a contract. There is still an awful lot to be done here.”
According to a proposed letter of intent dated Aug. 26 filed with the court by Stephens Media, the joint operating agreement would end no later than Dec. 31, pending final sign-offs by officers of the Greenspun Media Group and a review by the U.S. Department of Justice, which oversees newspaper joint operating agreements. Friday’s ruling allows the parties to continue negotiations that could produce a formal agreement.
Stephens Media attorneys said that a Justice Department review is customary, and that each side routinely forwards lawsuit filings to the department. Washington, D.C., attorney Gordon Lang, who is representing Stephens Media on the joint operating agreement, said a signed contract between Greenspun Media and Stephens Media would also be submitted.
Campbell said he wouldn’t characterize the review as an “investigation.”
“We’re hoping for a speedy resolution,” Campbell said.
Gina Talamona, a Justice Department spokeswoman in Washington, D.C., confirmed that a review is underway.
“The antitrust division is reviewing the proposed changes to the Las Vegas JOA,” Talamona said, adding she had no further information.
Three of the four Greenspun siblings, acting as the board of Greenspun Media, agreed on Aug. 7 to the proposal to end the joint operating agreement in exchange for a payment of $70,000 per sibling and the transfer of ownership of the website URL lasvegas.com from Stephens Media to the Greenspuns.
The Greenspuns currently pay $1 million to $2.5 million per year to lease the URL.
Campbell told Mahan the Greenspuns “would be in a better economic position” if the agreement is signed because they no longer would have to lease the website.
Brian Greenpsun was the sole no vote. He said in court filings that the Sun would fail without the $1.3 million annual subsidy it receives from Stephens Media through the joint operating agreement.
Outside of the courtroom, Greenspun said he wants to purchase the Sun from his siblings, “but you can’t do that unless you have a willing seller.”
Greenspun’s younger brother, Danny, voted to end the agreement and was in the audience for Friday’s hearing. The brothers did not appear to speak to one another.
Brian Greenspun told the Review-Journal he hasn’t been privy to his family’s negotiations.
“I haven’t been invited, but I don’t plan to let this go,” Greenspun said. “What I heard from the judge is to come back when you have an agreement. So we’ll be back.
“My issue here is to save the Las Vegas Sun and save the two-newspaper market here,” he said.
Greenspun attorney Joseph Alioto of San Francisco argued that ending the joint operating agreement would violate the Newspaper Preservation Act. He said that under the Act, a signed contract wasn’t necessary to block a merger.
“I think that’s a very interesting issue,” Alioto said. “Ordinarily, you hit before it happens.”
Alioto said Greenspun would consider his next step, which might include appealing Mahan’s ruling to the 9th U.S. Circuit Court of Appeals. According to a Justice Department spokeswoman, the number of newspaper joint operating agreements still in place when the Review-Journal-Sun deal was reached in June 1989 has dropped from 21 to six: Detroit, Charleston, W.V.; Fort Wayne, Ind.; York, Pa.; Salt Lake City and Las Vegas.
Contact reporter Howard Stutz at email@example.com or 702-477-3871. Follow @howardstutz on Twitter.