Experts: Regulatory Approval Likely in Vegas Deal

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Industry and antitrust experts believe the deal to combine the Las Vegas Sun and Las Vegas Review-Journal should pass muster with federal regulators, but the arrangement also could be a step toward the newspapers consolidating.

Executives from both newspapers said when the smaller Sun appears later this year as a daily section in the larger Review-Journal, the move will not violate the terms of their 15-year-old joint operating agreement that runs until 2040. The publications already are combined on weekends.

The competitive tension between the papers will remain in their starkly contrasted editorial pages and because the Sun will have autonomy, honoring the spirit of the joint operating agreement and a 55-year-old rivalry, Review-Journal Publisher Sherman R. Frederick said.

“That’s one of the things that made this JOA work, bad blood,” Frederick said Wednesday. “That won’t change.”

The Justice Department declined to comment Wednesday on the newspapers’ plans and whether it will bring added federal scrutiny.

An exception to federal antitrust law was made with the Newspaper Preservation Act of 1970 to let competing newspapers share business operations to preserve separate editorial voices in cities where one or both were struggling. There are 12 newspaper JOAs, including in Denver, Seattle and Detroit.

Mark Burton, a visiting professor at Marshall University’s Center for Business and Economic Research, specializing in antitrust and regulatory economics, said readers unhappy with the arrangement could protest the change — but any federal holdup was unlikely.

Once the papers start publishing together by Sept. 30, ungluing them will be difficult, Burton said.

“This is Las Vegas,” Burton said. “If I had to bet, I would bet that this won’t receive any review.”

The Sun and Review-Journal call the deal a win-win, with the larger paper saving money in printing and distribution costs and the Sun, gaining almost a six-fold increase in daily readers to about 165,000 and a bigger voice from its afternoon circulation of about 28,000.

“This amended JOA will benefit Las Vegans for the next 35 years because it will give them a two-newspaper package that will provide a range of different ideas and opinions that can only help people make better decisions for themselves and their families,” Sun President and Editor Brian Greenspun said in an e-mail.

“This is not a merger or an acquisition. It is merely a better way to distribute the Las Vegas Sun,” Greenspun said.

Frederick said the amended JOA allows his newspaper to hire more reporters without the past JOA requirement of having to pay a fee to the Sun, removing a “concrete block” from around his neck.

“This gives more flexibility in increasing and leveraging staff,” he said.

Frederick conceded some in the Review-Journal newsroom and those associated with its conservative editorial page won’t be happy having the scrappy, liberal Sun included in the morning newspaper. Some would prefer a Sun death to a revival.

While Frederick and Greenspun are upbeat about the unique arrangement, some industry observers were less gleeful.

“It’s the diminution of a newspaper,” John Morton, an independent newspaper analyst, said. “I don’t care how you describe it.”

Others, like Burton, see something more on the horizon.

“I find it hard to believe that this is not a first step in an acquisitions strategy,” Burton said. “Perhaps we will live long enough to see we are wrong.”

Jay Rosen, New York University journalism professor and author of the “Pressthink” blog, said what the Review-Journal is doing happens often in publishing.

“You actually want to get rid of it but you retain the name to somehow soften the blow,” he said. “After a while, it doesn’t mean anything and then it just disappears.”

In the short-term, some Sun jobs are expected to disappear. The newspaper doesn’t plan to retain all of its approximately 80-member staff to produce 6- to 10-page sections, seven days a week.

Greenspun said he didn’t know how many jobs would be lost, but indicated the section besides an editorial page would focus more on in-depth journalism than breaking news.

“We need to figure out what kind of newspaper we will produce first,” he said.

About staff reduction, Frederick said: “We have told the Sun that we would consider any of the folks let go.”

When Greenspun broke the news to his staff during a tense meeting Tuesday, people were clearly concerned about their jobs.

“I think it was pretty stunning news,” Sun columnist Jeff German said. “You’re talking about people’s livelihoods.”

But German, who doesn’t think his job is at risk, said there was a lot of upside in the Sun getting more exposure.

“The key challenge is to preserve the Sun’s identity in what is truly a unique experiment,” said John Ralston, whose column appears in the Sun and who also produces a daily newsletter.

“Unless the Sun can find a way to be a distinctive, different kind of newspaper inside the Review-Journal, people will just assume it is another section of the Review-Journal.”

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