Sun newspaper owner makes last gasp effort to snatch cash from soon-to-be former partner

Brian Greenspun is one litigious son of a Hank.

First, he filed an anti-trust lawsuit in federal court when Stephens Media, then owner of the Las Vegas Review-Journal, persuaded his siblings to take a buyout and close down the Las Vegas Sun as an insert inside the morning paper. When that did not appear to be working, he bought out his siblings and acquired the Sun, allowing the joint operating agreement (JOA) to continue intact. That agreement with Greenspun Media Group (GMG) expires in 2040.

Now, Greenspun says he is suing in state district court because Stephens Media has been systematically underpaying him since the JOA was renegotiated in 2005. Until then, under the JOA the Sun received a percentage of whatever the R-J newsroom budget was. We called it the Sun tax, because for every dollar spent in the R-J newsroom the company had to shell out so much to the Sun for its newsroom to spend however its owners saw fit — hire reporters, buy equipment or, since Greenspun was the putative editor, pocket it.

Brian Greenspun (Sun photo)

After 2005, the Sun was contracted to receive a percentage of the profits of the R-J and both organizations would pay for their newsrooms.

“One of the important goals of the 2005 revised agreement was to ensure both the Sun and the Review-Journal independently paid for their newsrooms,” Brian Greenspun, owner of GMG, is quoted as saying in today’s Sun. “However, we have learned that contrary to the specific terms of the contract, the Review-Journal continued to pay for its newsroom from joint funds, while we paid for the Sun newsroom on our own as required by the contract.”

It is not a joint ownership agreement. It is a joint operating agreement.

Under Greenspun’s “reasoning” the R-J’s paying for its own newsroom reduced Stephens Media’s profits and reduced the amount of money he received. He estimates underpayments plus interest could top $6 million.

“The contract clearly spelled out how the newsroom costs were to be handled, and Stephens simply ignored those clauses,” Greenspun is quoted as saying. I haven’t read the contract, but why did it take 10 years for this to come up? Perhaps, because profits have slipped so far? There is scant evidence that Greenspun is expending much money for his “newsroom,” and what he does spend surely cuts his profits, if any.

I suspect Greenspun is engaging in mere creative interpretation of the contract and grasping for a sympathetic judge.

Greenspun is probably suing now because Stephens Media just sold the entire company to New Media Investment Group, who should be sure and lawyer up because they inherited the JOA and now must contend with the litigious Greenspun.

Greenspun’s attorney is still Leif Reid, one of Harry Reid’s sons, even though at one time during the federal litigation Leif Reid sought to withdraw from the case, apparently due to a conflict of interest many reasoned.

A federal judge just this past week refused to award court costs and $200,000 in attorney fees to Stephens Media due to the Greenspun anti-trust federal suit.

The Sun story said Stephens Media attorney Mark Hinueber could not be reached for comment. It will be interesting to see how this plays out since basically there will be no Stephens Media when the sale is consummated. The outcome will certainly affect New Media’s bottom line, too, since it must abide by the same contract, depending on how a judge rules, if it gets that far.

 

 

 

 

 

 

Does court filing provide a hint that the end is in sight for the Las Vegas Sun?

That federal lawsuit in which putative Las Vegas Sun editor and publisher Brian Greenspun attempted to block an agreement by his brother and two sisters to end the joint operating agreement (JOA) with the Las Vegas Review-Journal under which the Sun appears as a section in the morning newspaper has been largely moribund for a couple of months.

Brian Greenspun

But a filing on Feb. 28 might hint at some action soon. The filing relates to a motion by Leif Reid, son of Harry Reid, to withdraw as an attorney for Greenspun.

“The parties are in the process of finalizing an agreement which would moot the instant Renewed Motion to Withdraw as Counsel. … The contemplated transaction is expected to be completed within the next thirty (30) days,” the filing states.

Now, what would “moot” the motion? Perhaps a final agreement to end the JOA?

Greenspun had futilely argued that ending the JOA would be an antitrust violation. In truth, 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.

Most of the JOAs created under the Newspaper Preservation Act have since been dissolved.

No book on political ‘extortion’ could exclude Harry Reid, could it?

Of course, any book with a title like Peter Schweizer’s, “Extortion: How politicians extract your money, buy votes, and line their own pockets,” which came out about a week ago, has to have a section on Harry Reid.

Schweizer opens that section with a quote from “The Godfather” by Don Corleone, “Do you spend time with your family? Good. Because a man that doesn’t spend time with his family can never be a real man.”

The book then describes a scene at a restaurant hours after Reid was sworn in on Jan. 4, 2005, for his fourth term and became Senate majority leader. “Reid was seated in the quiet backroom of the restaurant. The lobbyists, who represented the largest and most powerful corporations in the world, took turns saying hello to the new leader. ‘It was like a scene out of “The Godfather,”’ one lobbyist told Roll Call. ‘He was in the room and people were lined up to greet him and pay homage.’”

Schweizer then proceeds to list a litany of deals and schemes involving Nevada’s senior senator along with sons Rory, Key and Joshua and son-in-law Steve Barringer. Somehow son Leif escapes scrutiny.

Not much in the book breaks any new ground for those familiar with Reid and his family. The writer leaves out a few familiar names, such as recently convicted Reid campaign cash bundler Harvey Whittemore. Reid’s manipulation of the Legislature to force the premature closure of coal-fired power plants and foist the entire cost on ratepayers was probably too recent to make the book’s deadline.

Schweizer describes Reid’s rise to power as due not to his charisma, good looks and fine speeches — that’s obvious — but to his building of a Washington and Nevada political machine known for being ruthless. He repeats a quote attributed to Reid’s one time chief of staff, Susan McCue, a woman who turned the term media relations into an oxymoron and someone with whom I’ve had the displeasure of the occasional telephonic shouting match.

McCue told a reporter Reid looks at a person’s vulnerabilities to “disarm, to endear, to threaten, but most of all to instill fear.”

The author also quoted Reid pal and former fellow senator, Richard Bryan, as saying Reid “has a memory like a political elephant. You cross him, he’ll never forget that. There will be a price to pay. Certainly there are people who paid the price.” Bryan, who works at the same law firm as most of Reid’s sons have at one time or the other, declined to name names, though I can certainly think of a few.

Schweizer concludes that “Mr. Cleanface” — a name given Reid by mobster Joe Agosto, whom the writer misidentifies as Tony Agosto — “runs the Democrat Party’s toughest family extortion syndicate …”

Newspaper exec talks to WSJ but not his own paper

The CEO of Stephens Media wouldn’t give his own newspaper a quote about attempts to dissolve the JOA, but he gives one to The Wall Street Journal. Riding for the brand? Not.

“To say that we are attempting to monopolize anything is utterly ridiculous considering the plethora of news and advertising sources available to Las Vegas residents and the realities of the modern media marketplace,” WSJ this afternoon quotes Mike Ferguson, CEO of Stephens Media. “We will vigorously contest the unfounded allegations in this action, and are confident that the courts will agree. We intend to seek reimbursement of our attorneys’ fees for this meritless action.”

And just what is the real circulation figure now? Do they still have that reader board in the lunchroom ticking down the numbers?

WSJ says the Sun board of directors voted for noncompete clause, but I think they may be assuming something.

WSJ quotes Leif Reid as saying, “The Supreme Court said in the Associated Press case that freedom to publish is guaranteed by the Constitution, but that freedom to combine to keep others from publishing is not. We believe that the Review Journal’s effort to eliminate its competition through this illegal and anticompetitive transaction will be stopped by the courts.”