Dueling newspaper stories prove worth of Las Vegas JOA

Las Vegas JOALas Vegas JOANeed evidence the news-consuming public needs more than one source to help sort out the truth in a given contentious matter? Look no further than the December 5 editions of Las Vegas’s two suing-each-other daily newspapers, the Las Vegas Review-Journal and the Las Vegas Sun.

The papers were reporting on a hearing the day before in state court on litigation concerning contract issues arising from the 30-year-old joint operating agreement under which the Sun is published as an ad-free section of the RJ.  In the RJ, the headline was “RJ-Sun JOA lawsuit stayed.” The Sun‘s headline was, “Judge affirms arbitrator’s decision favoring Sun in dispute with R-J.”

Were they even covering the same hearing?

The answer is yes–sort of.

In my view the Sun‘s headline and story far better captured the main news element–the RJ got caught in an arbitration cooking the books on miscalculating how cash flow is divided between the two papers under the JOA and is going to have to pay up big-time. But the RJ headline and story weren’t incorrect. District Judge Timothy Williams did halt the other parts of the litigation pending resolution of a somewhat similar lawsuit the Sun filed in federal court, which arguably has jurisdiction because JOAs operate under an exemption from federal antitrust laws. That lawsuit contends the RJ is unfairly trying to put the Sun out of business and silence a opposite viewpoint.

The RJ disclaims such motivation, saying that JOAs are obsolete and the Sun would be free to publish on its own–if it could. In effect, the RJ is arguing greed–not editorial differences–drives it. Not a good look.

Of course, the RJ story didn’t mention the arbitration matter until the sixth paragraph and never got around to fully explaining it. This is not surprising, since it also is not a terribly good look for the conservatively inclined paper owned since 2015 by conservative casino billionaire mogul Sheldon Adelson. The liberal-leaning Sun has been owned since its founding in 1950 by the Greenspun family.

Indeed, the sharp contrast in how the two papers covered the same hearing may well cut against the RJ and in favor of the Sun, which argues that the purpose of the federal law granting JOAs antitrust exemption was precisely to allow competing editorial voices. Were I a lawyer for the Sun, I would put both articles into the court record and say “See what I mean?”

Under the Vegas JOA, the RJ bears all costs of producing the two papers except for the Sun‘s editorial expenses. The RJ is supposed to give the Sun what looks to be 10% of the operating cash flow, a payout that less than 15 years ago topped $12 million a year. But cash flow for daily newspapers in the ad-sucking Internet era is in short supply, and the Sun says it hasn’t gotten a cash flow payment in nearly three years. But in court papers complaining the Sun is required by the JOA to produce a better news product, the RJ somehow has left out the fact the Sun isn’t getting the resources to do that from the RJ.

Frankly, none of this is surprising. In 2015, perhaps hoping to buy some reputational insurance in his hometown, Adelson wildly overpaid even then for a property that since has lost 69% of its circulation. I suspect the RJ now, too, is wallowing in more red ink than a wounded octopus. This is not how Adelson became the world’s 24th richest person (net worth $35 billion), according to Forbes.

In previous posts I have made fun of this litigation for any number of reasons. The Sun‘s claim of antitrust violations against the RJ after having enjoyed the benefits of antitrust immunity for three decades is rather rich, like a robber filing a lawsuit against his partner to contest the division of spoils. I have likened the parties to two scorpions fighting in a sinking bottle; both eventually will die. I have pointed out the hypocrisy of such ardent foes of government secrecy filings page after page of documents with courts under seal, meaning they can’t be seen by non-parties such as moi. This is in the public interest?

In the past few weeks there have been new filings in the federal court lawsuit. From those that haven’t been sealed, my amusement continues unabated.

Adelson, the Sun said, seeks “to chill free speech and silence those that would speak out against him.”  Replied the RJ, “The Sun’s litigation gamesmanship (not to mention name calling) has reached a staggering level.”

The RJ rolled out what to me is an amazing claim: When the papers amended their 1989 JOA in 2005 to change the Sun from a separately delivered newspaper to a section of the RJ, the U.S. Department of Justice never gave explicit approval and as a result the JOA is invalid, so the Sun has no case. The Sun replied decisively with an affidavit from Alan L. Marx, a former antitrust lawyer for Justice who represented the Sun when the JOA was changed. Marx wrote that Justice never approves changes to existing JOAs so long as the changes are sent to Justice, which they were.

It would be sexy to call this a great newspaper war. Sexy–and dead wrong. Prior to my New To Las Vegas days I was involved in such epic battles during the 1970s and 1980s on century-old papers of quality in Philadelphia and Dallas that eventually went out of business. Few today would call either Las Vegas paper outstanding, especially the Sun, which now has has more lawyers (eight are listed as being of record in the litigation) than news reporters (about five, according to the Sun website.).

But the better analogy may be the gritty Russian occupation of part of Ukraine–a giant lumbering force (the RJ) pitted against a scrappy tiny opponent (the Sun) with wholly inadequate resources. Hardly a fair fight at all.

Still, it remains a cheeky one. In recent weeks the Sun–guerilla style–has changed the banner across the top of its section from “A Pulitzer Prize-Winning Newspaper” to “Las Vegas’s Only Pulitzer-Prize Winning Newspaper.” This is really twisting the knife. The explicit reference is to the Sun‘s 2009 public service Pulitzer–the top one–for a series of stories highlighting the high death rate among construction workers on the Las Vegas Strip. The implicit reference is to the RJ, which despite its far greater resources has never come close to capturing a Pulitzer.

On December 8, an RJ editorial carried this headline: “Law not meant to burden viable publications.” The editorial preached argued that the Newspaper Preservation Act, the 1970 law signed by President Richard Nixon that gave JOAs their antitrust exemption, was “surely never intended to burden viable publications as they strive to meet the challenges of a dynamic media marketplace.”

I beg to differ. Nothing in that law comes remotely close to suggesting papers in a JOA should be protected from the folly of what becomes a bad deal–in the case of Las Vegas, until the JOA expires in 2040. If in Las Vegas both papers end up failing–and the 11.2% RJ/Sun circulation drop in the past 12 months hardly inspires long-lasting confidence–well, that’s capitalism. The JOA was created several owners before Adelson, but he bought the RJ with full knowledge of and subject to it.

But meantime, we need both papers around to get at the whole truth of hot local matters. As well as provide more entertainment.

Follow William P. Barrett’s work on Twitter by clicking here.

So what's your take?

This site uses Akismet to reduce spam. Learn how your comment data is processed.