Stephens Media LLC, the owner and publisher of the Review-Journal, contend in court papers filed Friday that a proposed deal to stop printing and distributing the Las Vegas Sun would not crimp media competition in the Las Vegas Valley.
Countering contentions raised in a federal lawsuit filed by Sun publisher and editor Brian Greenspun to preserve the current arrangement, known as a joint operating agreement, Stephens Media President and CEO Michael Ferguson stated in a written declaration that members of the Greenspun family could start any local news venture they choose. In addition, they could continue printing the Sun and operating its website, but without Stephens Media’s long-standing financial support.
Stephens Media attorney Donald Campbell depicted Greenspun’s case as invalid because he has no legal standing to bring it.
The Aug. 20 lawsuit alleges that ending the joint operating agreement would violate anti-trust laws, but only the federal government can file such a suit, Campbell notes in court papers.
Moreover, in reply to Greenspun’s argument that he has status for a lawsuit as a paying subscriber to the Review-Journal, Campbell points to business records showing Greenspun has only a complimentary subscription.
Under the joint operating agreement, first put into effect 24 years ago and substantially rewritten in 2005, the Review-Journal assumed most business functions of the financially faltering Sun. The printing and distribution of the Sun as a section of the Review-Journal costs more than $1 million a year in paper, electricity, labor and other hard costs, Campbell said in court papers.
The Sun, owned by Greenspun and three siblings, also receives an annual profits payment based on an undisclosed formula. The effects of recession and the general decline of the newspaper industry reduced this sum from $12 million in 2005 to $1.3 million last year.
While the Review-Journal in court papers said a final contract is not yet in place, termination of the agreement would involve:
• Ending the annual profits payment.
• Paying each of the Greenspun siblings $70,000. A proposal early in negotiations to require each to sign a non-compete agreement was dropped as the deal evolved. There would also be a nominal $10 payment for ending the joint operating agreement.
• Turning ownership of the lasvegas.com domain name to the Greenspuns, relieving them of the obligation to pay Stephens Media from $1 million to $2.5 million per year in licensing fees.
On Aug. 7, the Greenspuns voted 3-to-1 to accept the agreement in principle, with Brian Greenspun the sole dissenter.
“Even if closing down the Las Vegas Sun is not expressly contemplated, the termination of the 2005 JOA will effectively destroy the Las Vegas Sun and its website” by stripping it of all infrastructure and other support, Brian Greenspun attorney E. Leif Reid wrote in court papers.
But Campbell called this argument “a poorly camouflaged attempt to transform a long-simmering family feud” into a matter of anti-trust law. Instead, he added, Brian Greenspun “now seeks an end-run around the business judgement” of his three siblings.
Brian Greenspun’s lawsuit does not name his siblings, however.
U.S. District Court Judge James Mahan will conduct a hearing on Sept. 6 on whether to stop the deal through a temporary injunction.
Contact reporter Tim O’Reiley at email@example.com or 702-387-5290.