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Las Vegas Sun publisher sues, alleges family conspired with Stephens Media


The publisher and editor of the Las Vegas Sun filed a lawsuit in U.S. District Court on Tuesday alleging his own family members conspired with Stephens Media, operator of the Las Vegas Review-Journal, to end a Joint Operating Agreement that has been in place for 24 years and governs publication of the two newspapers.

In a separate motion, attorneys for Brian Greenspun are seeking a temporary restraining order and injunction to set aside several votes that took place Aug. 7 during a special meeting of Greenspun family members, who are Las Vegas Sun stockholders and the directors of Greenspun Media.

Court documents said negotiations between Stephens Media and the Greenspun family have been taking place since early summer.

According to the lawsuit, Greenspun Media directors voted 3-1 during the special meeting to accept ownership of the URL lasvegas.com. The website, which is owned by Stephens Media, is leased to a company owned by Greenspun Media. The URL is being used by the Las Vegas Convention and Visitors Authority.

At the same meeting, stockholders of the Las Vegas Sun voted to end the Joint Operating Agreement.

The move could effectively end the print edition of the of the Las Vegas Sun, although the Greenspuns could attempt to print the newspaper on their own. The Greenspuns would still control the LasVegasSun.com website.

Brian Greenspun voted against both moves.

His sisters, Susan Greenspun Fine and Janie Greenspun Gale, with his brother Danny Greenspun, supported the motions.

In a letter of intent dated Monday between Stephens Media and Greenspun Media Group CEO Paul Hamilton, the Joint Operating Agreement would be terminated for a cost of $10, and the website URL would be transferred to the Greenspuns. Stephens Media would pay each Greenspun sibling $70,000 as a closing price.

According to the lawsuit, the Greenspun siblings, minus Brian, voted to move forward with the letter of intent to terminate the Joint Operating Agreement.

Hamilton declined comment. Danny Greenspun could not be reached for comment.

Stephens Media CEO Mike Ferguson and company general counsel Mark Hinueber both declined comment on the lawsuit and motion.

In the lawsuit, Brian Greenspun said terminating the Joint Operating Agreement would violate federal antitrust laws and could leave Las Vegas as a single-newspaper community.

Leif Reid, the attorney for Brian Greenspun, said the “focus of the lawsuit was to prevent the creation of a monopoly by the Review-Journal.”

When asked why Brian Greenspun didn’t name his siblings in the lawsuit, Reid said, “That has no bearing on this matter. What is being proposed violates U.S. antitrust laws.”

According to the letter of intent, the U.S. Department of Justice, which governs newspaper Joint Operating Agreements, would have to approve the deal.

The Joint Operating Agreement was established in 1989, shortly after the death of Las Vegas Sun patriarch Hank Greenspun. The agreement was established because the Sun “was routinely unprofitable and operated at a substantial loss.”

Under the agreement, all business operations of the Sun, including advertising, sales, printing, and distribution, would handled be handled by the Review-Journal. The newspapers had separate and independent news and editorial operations.

The Sun was published as an afternoon newspaper and the Review-Journal was the morning publication.

In 2005, the Joint Operating Agreement was renegotiated. The Sun was reduced to an eight- to 12-page section without advertising and was to be distributed as part of the morning Review-Journal.

According to the lawsuit, the Sun receives an annual profits payment of $1.3 million. The current Joint Operating Agreement expires at the end of 2040.

“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,” according to the lawsuit.

Hank Greenspun began the Las Vegas Sun when he acquired the remnants of a newspaper started by the International Typographical Union. First published in May 1950 as the Las Vegas Free Press, the paper’s name was changed to Las Vegas Sun in July of that year.

Over the years, the Greenspun family moved beyond publishing into other businesses that have been hit hard by the recession and housing bust.

The family launched American Nevada Co. in 1974. The real estate development arm was responsible for the 8,400-acre Green Valley in Henderson, Southern Nevada’s first master-planned community.

The Greenspuns partnered in several gaming projects with Station Casinos, including ownership in Green Valley Ranch Resort and Aliante Station. That investment was lost through Station Casinos’ 2011 bankruptcy reorganization.

The Las Vegas Sun was a part owner in Las Vegas 1, a failed cable television channel, and the Greenspuns invested heavily in the Las Vegas Sun’s website and have been criticized for winning awards with it while producing little revenue.

The Las Vegas Sun produced the short-lived 702.tv, a nightly television show on the Las Vegas entertainment scene that was created for Las Vegas 1. The plug was pulled on the show after just a few months.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871. Follow @howardstutz on Twitter.

 

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