For federal Judge James Mahan to grant a hearing on Las Vegas Sun editor Brian Greenspun’s antitrust lawsuit to block the dissolution of the joint operating agreement (JOA) and end the printing of the Sun is tantamount to granting a hearing to some guy standing on the side of the road with a sign that reads: “Will edit for obscenely large pay check.”
Greenspun was outvoted by his own brother and sisters, who agreed to the deal offered by Stephens Media, owner of the Las Vegas Review-Journal.
For him to demand his siblings and the R-J continue to produce his “newspaper” is like a farmer demanding that other people pick his cotton. Indentured servitude was outlawed by the 13th Amendment.
To call his lawsuit an antitrust suit is standing the law on its head and spinning it like some crazed breakdancer. It was the JOA that violated antitrust law as it stood until Congress gave newspapers an exemption under the Newspaper Preservation Act of 1970. The dozens of JOAs effectively created newspaper monopolies that retarded the potential for real competition from a viable entity by saving the bacon of failing newspapers under the pretext of preserving an alternative editorial voice.
At the time of the original JOA in 1989, the Sun was losing millions of dollars a year and would have closed down shortly had they not offered Donrey, then owner of the R-J, a bundle of cable television stock to keep the Sun alive.
In the Sun’s case that voice has devolved into largely syndicated columns and features with a local editorial appearing once in a blue moon.
Speaking of alternative voices, the R-J story reporting granting of the hearing reads in print: “U.S. judge retains pact between R-J, Sun temporarily,” while the online hed reads: “Federal judge questions newspaper lawsuit but grants temporary restraining order.”
The Sun hed in print reads: “Judge sides with Sun in granting order,” and online: “Federal judge sets hearing for Sun-Stephens dispute.” (Actually, the print hed is inaccurate. The “Sun” is not seeking a restraining order, only a the dissident editor is.)
And spinning goes on and on.
At least two dozen JOAs have been dissolved over the past decades as the economics of newspaper production and advertising have shifted dramatically. Not one dissolution has been blocked by concerns over antitrust issues, though that has been raised several times. Even the R-J and Sun JOA was renegotiated in 2005, taking the Sun from a shrinking afternoon newspaper to an insert in the R-J.
The current plan to shut down the Sun, with the assent of a majority of shareholders, is simply a negotiation that would end the contract now rather than in 2040.
According to the R-J account, Mahan wrote in his order of the majority Sun shareholders’ decision, “The court is not inclined to reverse their decision and order … that they must continue to publish the newspaper regardless of the board’s determination.”
Mahan also pointed out, “The plaintiff Brian Greenspun is a dissident minority board member who disagrees with the business decision of the majority of the board.”
Speaking of spinning, the R-J also reported that Mahan said if there is a violation of antitrust laws, the U.S. Department of Justice or the Nevada attorney general can intervene.
But the Sun story said, “If the courts find the agreement between the three Greenspun siblings and Stephens Media violated antitrust laws, as Brian Greenspun contends, the Justice Department or the Nevada attorney general could intervene and stop the effort, Mahan noted.”
A letter of intent sent from Stephens Media to the Sun’s owners, who approved going forward with the shut down, agreed to terminate the current contract for the cost of $10, plus payment of $70,000 to each of the four Greenspun siblings and the transfer of the lasvegas.com URL. Apparently a previously proposed noncompete clause was not part of the letter, suggesting to some that one or more Greenspun might continue to operate the Sun website.
But the lawsuit from Brian Greenspun said, “Moreover, the true intent and purpose of the termination of the 2005 JOA is to close the Las Vegas Sun. If the Defendants’ actions are not enjoined, and Plaintiffs later prevail, any relief that the court could afford would be inadequate because the Las Vegas Sun would no longer be a viable print of online newspaper. Once closed, the Las Vegas Sun is unlikely to be reopened due to the loss of infrastructure necessary to produce and print its newspaper , the loss of its website to disseminate news and opinions online, and the loss of future capital with which to fund operations” — namely $1.3 million a year as Greenspun’s affidavit attests.
Frankly, I wouldn’t be surprised if Mahan rules from the bench at the Sept. 6 hearing that Greenspun has no standing, no case and no chance.
I wonder if Harry Reid will return Brian’s phone calls then.