In 2019 here’s what I opined in this space. The fresh federal-court lawsuit brought by the Las Vegas Sun against its larger, long-time joint-operating-agreement business partner, the Las Vegas Review-Journal, claiming antitrust violations was simply absurd, given that the law allowed such restraints of trade. “Imagine,” I began, a bit in the style of Rod Sterling opening an episode of “The Twilight Zone:” “Two thieves who, after a heist, can’t agree on the division of spoils, and one of them actually sues the other in court. Outrageous, eh?
Seven years and millions of dollars in legal fees later, we know the outcome, thanks to rulings from a federal appellate court: Yes, it was outrageous. The case was tossed. And as a result the Sun is on its deathbed, at least in print.
Today, the RJ stopped printing the Sun, an ad-free one-section insert inside the RJ. The Sun likely does not have the wherewithal to print it alone.
The death of any newspaper, of course, is to be lamented, as it reduces information reaching the public. (Long before becoming New To Las Vegas, I worked for several newspapers that later went under.) Already-media-starved Nevada will be left with just three daily print newspapers. But how much that benefits the RJ in the longer run remains to be seen. Latest circulation numbers appear to show a continuing decline, and now readers will receive less of a package. And as I wrote in yet another 2019 post, “In a battle between two scorpions in a bottle, only one will survive–assuming the bottle doesn’t sink in water and also kill the victor.”
Since 1989 the two Las Vegas newspapers have been in a joint operation agreement, sanctioned by a 1970 federal law called the Newspaper Preservation Act that allows immunity from antitrust laws so long as one paper initially was in danger of failing (here, the Sun) and editorial operations remain independent. Originally, the two papers were published in separate editions, the RJ in the morning and the Sun moving to the afternoon. But in 2005 the JOA was revised to make the Sun a section of the morning RJ. The larger operation bore the complete cost of printing and distribution–everything except news and editorial. The Sun covered that from a 10% cut of the cash flow. As originally envisioned, the JOA would run until 2040.
In the year after 2005, according to court records, the agency cash flow was a whopping $120 million, yielding $12 million to the Sun. But thanks to the Internet, new media, Craigslist siphoning off classified ads, and changing consumer habits, the cash flow turned sharply negative. Yet the RJ still had to print and distribute the Sun. Despite winning the 2009 Pulitzer Prize for Public Service about construction workers deaths along the Las Vegas Strip, the Sun’s editorial product withered away. The paper managed to function with a minuscule staff that mainly edited wire copy and covered little local. But toward the end, the Sun had more lawyers than reporters, and it showed daily.
To put it bluntly, there was little trade left for the papers to restrain. So properly understood, any JOA became nothing but a stay of execution for the weaker paper. Indeed, the Vegas JOA was the last of the two dozen or so that once dotted the fruited plain. They were found in such major cities as Detroit, Miami, Pittsburgh, St. Louis, Salt Lake City, San Francisco, Seattle and Tucson. Today, some major cities, like Atlanta, Salt Lake City and Portland, Ore., don’t even have one daily newspaper in print.
Founded in 1950, the moderately liberal Sun has been owned continually by the family of its buccaneering, crusading founder, Hank Greenspun, whose name adorns the journalism school and the public affairs college at UNLV. He died in 1989. The paper’s current owner is his son, Brian Greenspun. Dating back to 1909, the conservative RJ has changed hands a number of times but since 2015 has been owned by the family of Sheldon Adelson, the casino billionaire who died in 2021.
The Sun‘s antitrust lawsuit in federal court was a response to a state-court case (still pending) by the RJ to end the JOA on contractual grounds. Indeed, the RJ used the declining market share enjoyed by newspapers to defend itself against antitrust claims. In court filings the two papers hurled a lot of invective about the failings of each other. As near as I can tell, most of this was true (and very entertaining to read!).
But, according to court records, the RJ’s real break legally came when its lawyers discovered at some point that when the JOA–under previous ownership–was revised in 2005 to make the Sun a section of the RJ, the parties failed to get the explicit written permission of the U.S. attorney general. Whereas JOAs in existence before the 1970 Newspaper Preservation Act were grandfathered in from needing such permissions–they just needed to notify Justice–a separate provision required such approval for post 1970-JOAs, like the one in Las Vegas. The lawyers even unearthed an April 2008 letter from Justice saying that its decision to not look further into the matter “was not based on a conclusion that the 2005 amendments to the parties’ Joint Operating Agreement are protected by the antitrust immunity afforded by the Newspaper Preservation Act,” and that the 2005 JOA “remains subject to antitrust scrutiny.”
Well. The RJ‘s lawyers started screaming in federal court this ended the matter once and for all. That didn’t persuade Anne R. Traum, the Las Vegas federal district court judge overseeing the case. But it was quite persuasive to a unanimous panel of the Ninth Circuit Court of Appeals in San Francisco. “Because it did not receive the required ‘prior consent of the Attorney General,’ the 2005 JOA is unlawful and unenforceable,” Judge Daniel P. Collins wrote in a 34-page opinion. The U.S. Supreme Court declined to hear the Sun‘s appeal.
In an editorial today, the RJ declared, “We just don’t want to foot the bill. It is time the Sun stood up on its own two feet.” Of course, the RJ has had the benefits of the loss-writing-off-ability and deep pockets of the Adelsons, who according to Forbes are worth $36.5 billion.
The Sun doesn’t seem to have a lot of good options left. But it wrote on its website today, “This is not over yet. And we intend to be back in print before the audience we built over many years very soon.” A federal court filing late today after a 2½-hour hearing in Las Vegas that involved 13 (!!!) lawyers either present or on remote hookups suggests the Sun and its legal team will be scrambling over the weekend to come up with a new legal theory against a deadline set for 10:00 a.m. on Monday.
One approach might be to insist–perhaps as negotiating leverage–that the original 1989 JOA agreement, which was approved by Justice, should be reinstated. But that would require publication of a separate afternoon Sun, hardly a viable economic endeavor in this environment. In 2015–the year the Adelsons bought in–the RJ’s circulation was 232,372. But according to the UK’s Press-Gazette, the RJ‘s own daily circulation now is down to a mere 27,000, a stunning 88% drop (but still enough subscribers to be the country’s 20th largest newspaper by circulation). How many would buy an afternoon newspaper? Brian Greenspun is wealthy, but not Adelson wealthy.
Another option could be to try and turn the paper into an online-only outlet like the nonprofit Nevada Independent, founded by noted Nevada journalist Jon Ralston sort of as a counterweight to the RJ. This has happened in a few ex-JOA cities. For example, the Seattle Post-Intelligencer (once owned by the man on whose land the historic Huntridge subdivision in Las Vegas was later built), which ceased print operations in 2009, has lingered on as seattlepi.com .
But whatever remaining influence The Sun had–Hank Greenspun’s editorials once helped elect Nevada governors and sink Joseph R. McCarthy–likely will go poof. Sorta like into the Twilight Zone.