The hearings have been held and almost all the briefs are in. It will be up to a federal judge in Nevada to decide if the Las Vegas Sun will ever see the light of print again. A ruling could come soon. In my view, it’s a loooong shot for the 76-year-old daily newspaper.
To recap: In 2019 the Sun, owned by founder kin Brian Greenspun, sued its business partner, the Las Vegas Review-Journal, owned by the mega-multi-billion-dollar Adelson family, claiming violations of federal antitrust laws. In 1989 the two papers had entered into a Joint Operating Agreement under which the RJ would handle advertising, printing and circulation for both papers while sending the Sun a small cut of cash flow to cover its editorial costs for an separate publication. In 2005 JOA arrangements were changed to make the Sun a daily ad-free section within the RJ. The JOA was set to expire in 2040.
All this happened amid the meltdown in newspaper revenues thanks to online sources like Craigslist, which siphoned away lucrative classified ads. In 2020 I estimated in this space that the Las Vegas JOA was losing $10 million a year. Remarkably, that figure was later confirmed by an RJ executive in open-court testimony. But it really was no surprise; even counting new digital subscribers, circulation of the RJ has declined 77% under Adelson ownership.
Earlier this year, Anne R. Traum, the patient federal district judge hearing the matter in Las Vegas (although she is based in Reno), gave the Sun the latest in a series of injunctions requiring the RJ to continue printing the Sun pending outcome of the federal litigation. But the RJ won a ruling from the Ninth Circuit Court of Appeals in San Francisco voiding the injunction as well as the JOA. The reason: That 2005 change in the JOA required permission of the U.S. Attorney General, which was never given. After the U.S. Supreme Court declined to hear the Sun‘s appeal, the RJ daringly stopped printing the Sun on April 3. That led to the present flurry of legal activity in which the Sun, which is still online, seeks another must-print injunction. Two days of hearings took place last month. Greenspun testified he doesn’t have the wherewithal to finance the print product on his own.
A JOA is an exemption to federal antitrust laws and it allows formerly competing newspapers to combine non-editorial activities and jack up prices so long as one is in danger of failing. There was little question that in 1989, when founder and owner Hank Greenspun died, the Sun was at death’s door before the JOA deal. As it turned out, Las Vegas became the last remaining of the two dozens JOAs around the country, all done in by changing economic circumstances and media landscapes.
Readers of this blog know that I long have thought very little of the Sun’s case on antitrust grounds. In 2019, shortly after it was filed, I noted the JOA with that government-sanctioned monopoly had made $121 million in 2005. “Imagine,” I wrote then, “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?” The headline: “In Las Vegas, no honor among newspaper co-monopolists.”
As a journalist who worked for dying newspapers in competitive markets and as a consumer of news who values diverse viewpoints, I, of course, would like the Sun’s print product to continue. But that’s not the issue here. I have read the Sun‘s recently filed 25-page post-hearing brief, signed by four lawyers (two more than the total number of Sun reporters). In my view, the filing is wholly unconvincing from a legal standpoint. While making the undeniable point that the Sun‘s need for injunctive relief mandating printing is immediate pending a trial, the Sun does not make a persuasive case it would prevail at any trial–a requirement for injunctive relief now.
“The RJ has Willfully Acquired and Possessed Monopoly Power in the Newspaper Market,” one bold-faced section heading reads. Oh boo hoo. For years the Sun was a party to that monopoly and all too glad to pocket substantial earnings with minimal effort.
Live by the hoard, die by the hoard, I say.
Even though it was sort of swatted down by the Ninth Circuit, the best argument the Sun probably has is that with the 2005 version of the JOA void, the original 1989 JOA should spring back into effect. That might require publication of a separate Sun as an afternoon newspaper. This would defy all economic realities of today’s environment. Another option would be a slimmed down Sun, maybe two pages, within the RJ.
The Sun also trotted out the First Amendment and the need for competing voices in the marketplace. Indeed, the Sun’s editorial page–often the only part of its section with staff-produced copy, or the striking lefty cartoons of ex-Sun staffer Mike Smith—is indeed liberal while that of the RJ is as conservative it gets. Moreover. diversity of editorial-page viewpoints was specifically cited as crucial in the legislative history leading to the Newspaper Preservation Act, which legalized and immunized JOAs.
But from a legal standpoint, the problem with invoking the First Amendment here is that it acts only as a restraint against the government. The RJ is not the government.
The Sun’s case and the advocacy of its legal team reminds me of that old lawyer bromide: If pounding the law and pounding the facts don’t work, pound the table.
In its own 24-page just-filed post-hearing brief, the RJ essentially agreed with my long-ago suggestion of long-term joint monopolists: “The Sun and the Review-Journal do not compete to sell newspapers.” The brief pointedly said that Greenspun himself testified that after the Adelsons bought the RJ in 2015, he “was willing to take money and ‘exit the JOA and ‘be out of the newspaper business'” One text message cited in the case from Greenspun suggested a price “close to 100 million.” This conflicts mightily, to say the least, with Greenspun’s declarations at other times of his long-term commitment to journalism and the Sun as a differing voice.
In any event, the RJ argues, Greenspun’s grievances can be satisfied with a money judgment if the case ever gets the far. The implication here is that the print version of the Sun in the RJ’s view is nearly worthless as a business proposition.
The Sun gets to file one more brief, due next week. Then it’s Here Comes The Judge time. Traum is a former UNLV law professor with a background of liberal causes. She was appointed to the federal bench by President Joseph R. Biden in 2022 and confirmed after a contentious U.S. Senate committee hearing by a narrow 49-47 margin. What to do? The RJ surely will immediately appeal to an unsympathetic Ninth Circuit any immediate injunction she issues requiring publication. But Traum also has the option of simply denying the Sun‘s request for an injunction while letting the case–already seven years old–grind forward toward a possible trial on money damages. That, of course, wouldn’t bring back the printed Sun.
After reviewing the record, that’s where I would put my bet. Feel free, all, to comment below.
