The Vegas Notion

By: Jennifer Saba It was just over 18 months ago when Rob Curley, then vice president of product development at WashingtonPost.Newsweek Interactive, received a call from former colleague Dave Toplikar. He and Curley had worked together at the Lawrence (Kan.) Journal-World, and now Toplikar was the new media managing editor at the Las Vegas Sun. The Sun's site was in the process of revamping operations, and Toplikar reached out to Curley to come out West to conduct a seminar.

As Curley recalls, Toplikar said, "I need your help. The mind is willing, but the body doesn't know how to perform the act."

To watch Curley in action proselytizing about his passion ? newspapers and the Internet ? is like that scene at the end of Napoleon Dynamite where the gawky nerd-hero springs to life and wows his high school with unexpected, fluid dance moves. Curley knows how to hold an audience. He knows how to fire them up. He's especially adept at spreading Internet fever. Even one of his detractors ? and there are many who claim Curley is more Powerpoint svengali than digital guru ? had this to say: "He has unbelievable energy, and makes people want to charge through a brick wall."

It's certainly a desirable skill in these moribund times at newspapers, and one that didn't go unnoticed by the Sun's publisher Brian Greenspun. While lunching together after the seminar, Greenspun wanted to see whether Curley was interested in jumping ship. Curley said he was happy in D.C., leading skunk works for the Interactive division of the Post Co. and famously (or infamously) getting the Washington Post's hyperlocal site Loudoun.com off the ground. But the two kept in touch during the course of the year ? and Greenspun kept wooing.

In May 2008, Curley agreed to come on board as president and executive editor of Greenspun Interactive, the operator of LasVegasSun.com and several other properties. Says Greenspun, "I was very much impressed with the quality of work he had done and his view of the future." Curley fit the description of what Greenspun was looking for, aiming to grow his Interactive empire and, as the latter puts it, "build a newspaper from scratch."

There was still a question regarding the business operations. Says Curley, "The first thing Brian asked me was, who do you want to run the business side? I said, 'Jennewein.'"

"Jennewein" is Chris Jennewein, the former VP of Internet operations for The San Diego Union-Tribune and a well- respected new media expert with 20 years of experience going back to The Atlanta Journal-Constituion and Knight Ridder. While Curley and Jennewein knew each other, they had never worked together. Jennewein signed on as senior vice president and publisher shortly after leaving the Union-Tribune, which was subsequently put up on the auction block ? where it still sits. The hires were positioned as two "nationally known interactive publishing executives and innovators," a release stated at the time.

The emergence of these two heavyweights in Vegas, the No. 43 designated market area in the country, signaled the Sun is getting serious about the Internet. The LasVegasSun.com redesign, launched in January, coincided with the Republican caucuses in Nevada. Since then, the clean, sophisticated, and arguably one of the best-looking newspaper Web sites around has caught the attention of many Internet watchers. It was the recipient of several awards, including a 2008 EPpy for best overall newspaper Web site for its monthly unique category.

But it's certainly not the only player at the table ? and the paper is intricately linked through an unusual joint operating agreement with the dominant Las Vegas Review-Journal. The R-J is no slouch when it comes to the Web, either: It's lauded in the industry for its forward-thinking online strategies. In the R-J, the Sun is but a section. And yet, for a smallish and ? let's face it ? totally singular market, Vegas could end up being the beneficiary of two thriving online news organizations. With apologies to country-rock great Gram Parsons, instead of "Oooh Las Vegas" this is "Twooo Las Vegas."



Join hands for the plunge

As with all newspaper Web sites, this story begins with print.

The Sun started as a morning paper in 1950, owned and operated by the Greenspun family when many markets were still two-daily towns. The R-J, now owned by Stephens Media, published mornings. As the '80s were coming to a close, the Sun was bleeding money, between $3 and $5 million annually. By 1990, the two papers decided to enter into a joint operating agreement. Under the terms, the R-J printed, distributed, and sold advertising for both newspapers. The R-J and Sun would continue publishing in the morning and afternoon, respectively, as individual dailies.

As Greenspun explained in an interview with In Business Las Vegas several years ago, "All the expenses were subtracted from the revenue. To the extent there was something left, the Review-Journal got 90% of it and we got 10% of it."

The JOA worked ? for a while. By the mid-2000s, the Sun's circulation, in a market with explosive growth, was on a downward spiral. When the JOA was first hashed out, the Sun's circ was 60,000. By 2005, it had fallen to 28,000. The R-J had picked up roughly 35,000 subscribers during the same time period, with a daily circ of 165,000. In 15 years, afternoon papers had become the Mastodons of the industry ? and the Sun was no exception.

Stephens and Greenspun amended the JOA in 2005, to both their benefits. The new deal meant the Sun would become a morning publication, but with a twist: as a broadsheet section inserted inside the R-J for distribution. "We weren't losing money," Greenspun says. But the plunge in circ was disconcerting: "Together we found we could better serve the public with two independent viewpoints delivered together. My goal was to get a greater circulation for our editorial product."

The Sun is responsible for delivering eight editorial pages Monday through Friday, six on Saturday, and 10 on Sunday. The two newsrooms are separate. The R-J has the right to put advertising in the Sun, and the latter has the right to reject it within certain terms. If the R-J sells two full-page ads in the Sun, for example, the Sun gets two more pages dedicated to newshole.

But ads in the Sun are rare. "At this point we are not selling ads in the Sun," says Sherman Frederick, publisher of the R-J and chief executive of Stephens Media. "We would put ads in the Sun if we were locked out of positions in the R-J. We would do it if it were more efficient. It's just easier for us to keep them at a full eight pages."

The R-J pays the Las Vegas Sun a fee that slides depending on how well the R-J does. Given these challenging times, Greenspun says that fee has gone down significantly.

While the Sun is somewhat protected by a downturn, "they are still tied to us," says Frederick. "When we go down, they go down." He says they made the "right call" in agreeing to amend the JOA, "especially in this economic environment. The idea of supporting a full-fledged afternoon news- paper is something I haven't thought about it in a while. Now that you ask, I'm glad I'm not carrying an atrophied limb around."

It has other benefits too, Frederick notes. The R-J is known as a conservative news- paper: It was one of the few major metros to endorse John McCain for President, while the Sun backed Barack Obama. "There are a certain number of readers who get upset about one editorial stance or another," he says. When a reader complains that the R-J should have supported Obama, Frederick tells them to flip to the Sun. "We get it on the other end too. 'Can you give me the R-J without the Sun?' The answer is no."

The Web site operations for each paper are something else altogether. In other JOAs such as Seattle or Detroit, there is one department (or company) that oversees business functions, including advertising sales, for both newspaper Web sites. The newsrooms remain independent.

In Vegas, Greenspun maintains complete control over the business functions of LasVegasSun.com as Stephens does for LVRJ.com and its other online properties. When asked why the amended JOA did not include the functions of the Web sites, Greenspun says, "Frankly, it was hard enough to get the newspaper part done."



Hit the ground running

Whether by happy accident, incredible foresight, or just an impasse, the JOA revision unshackled the LasVegasSun.com from the print edition. As Greenspun explains, "1990 freed us from our press, and 2005 freed us from our obligation that newspapers have to print everything."

Foregoing that responsibility also means foregoing lucrative print ad revenue. Says Mark Glaser, executive editor of PBS' MediaShift, "On one hand, the Review- Journal has a lot more [revenue] coming in with print ads. You can also say that because it's their cash cow, they are focused on print revenues. The Sun can completely focus on online revenue and might have an advantage."

Glaser then points to the present-day reality: "We are still at a place where magazine and newspaper print ads bring in more than online ads."

The Sun exists in a much larger empire. Greenspun Interactive is part of the Greenspun Media Group, which is part of The Greenspun Corp., a wide-ranging company. Its media properties include In Business Las Vegas, Las Vegas Home & Design, Las Vegas Magazine, Vegas2Go, and Las Vegas Weekly; Niche Media Holdings, which publishes the glossy luxury mags Gotham, Hamptons, Los Angeles Confidential and magazines for the Venetian and Palazo resorts; the Web sites Vegas.com and LasVegas.com; and TV stations including KTUD. The Greenspun Corp. also controls a huge chunk of real estate in Henderson, Nev.

The company was founded by Brian's father, Hank ? a newspaper owner, casino builder, arms supplier, congressional gadfly and target of the Watergate Plumbers. The elder Greenspun worked briefly for Bugsy Siegel's Flamingo casino in 1946 as Las Vegas was getting its legs. By 1950, Hank had acquired the Sun, which was started a year earlier when printing union members of the R-J were locked out. He also was among the first to criticize Sen. Joe McCarthy.

As for Brian, he is president and editor of the Sun, chairman of The Greenspun Corp., a FOB (friend of Bill Clinton), a movie producer (National Lampoon's Lady Killers), actor (he played a reporter in Elvis and Me), and a Tribune Co. investor and board member. When asked if he regrets that investment ? a few weeks before the Chicago-based company filed for Chapter 11 ? he says, "No, I don't regret anything that my family has done in regard to better inform this country. Now, I regret the economy took such a lousy turn. I regret the bailout doesn't extend to the newspaper industry."

So while Greenspun the company has lots of revenue-generating opportunities, the industries it is involved in? especially media and real estate ? are particularly vulnerable.



Lay your money down

Frederick, meanwhile, says that the R-J is doing fine financially even though he wouldn't put a number to it, citing that the company is private. "Let me put it this way, we are still a going concern," he laughs.

Stephens invested in other media deals too, including MediaNews Group's complicated transaction to purchase the San Jose Mercury News. Frederick observes that Sin City is in a lot of pain: "Las Vegas in the past was relatively immune from recessions. Not this time. It's tougher on this place than anywhere else in the country, except maybe for Phoenix. Our housing market has virtually disappeared. That whole category is gone. Our competitors down the street" ? the Greenspuns ? "are real estate people. That's a double whammy."

The idea, then, to let a Web site take the lead from the print edition might be the best way for the Sun to exist. Greenspun's experiment was enough to tempt Curley and Jennewein, two executives who had each worked in much larger markets, to place their bets on Vegas. In their roles, they are responsible for Interactive operations for all of Greenspun Media Group, with the exception of Vegas.com and LasVegas.com. "When you ask me my vision, it's a bit blurred," Greenspun says. "I do see it as the next great opportunity for credible information and news. I can't tell you we have all the answers.

"There's a little bit of 'if you build it, they will come.' We are building a site with all the ancillary functions, whether it's streaming video, or the iPhone, or a wristwatch ? we're trying to build a content-based delivery system that will appeal to the younger generations."

That's for Jennewein and Curley to figure out ? an opportunity they are both eager to tackle.

"The only thing you have to keep about the site is the name," Curley says. "It's one of the few game plans I have ever seen and heard that might actually work. How do we become, on the Web, the paper of record? Every newspaper I've been at, if you throw out an idea and it's great if you do it well, it will kill print. We never have to have that discussion."

Jennewein was attracted to Greenspun for much the same reasons: "I saw a company that exuded journalistic principles and at the same time had an aggressive approach to online business. We are building this from scratch. It gives us an enormous opportunity do it right the first time."

That leaves both of them with two tasks: building an audience, and monetizing it.

Since the Sun runs only eight pages a day, the paper takes a more analytic approach to print stories. Curley describes it like a "daily Newsweek that focuses on Las Vegas." That lets the Web team go gangbusters breaking news. The site also covers sports, entertainment (Robin Leach is a columnist), and other Vegas-centric subjects like poker, carefully monitoring stories that yield high traffic. Curley says that affords them the luxury to cover subjects that are most popular.

The design itself is very user-friendly. Says Ryan Sholin, director of community site publishing at GateHouse Media, "When they launched, it was an incredibly slick-looking modern news site with lots of white space like NYTimes.com. They dug into a huge video player ? bigger than anyone else." He also notes the template fluidly changes. On some days the approach is to take one lead graphic, while on others it might display several links.

The lack of print ads in the Sun also is a great advantage to the site. They don't have to worry about cannibalizing from print revenue, especially with classifieds. They don't have to worry about upsells from print ? one of the main reasons why online newspaper ad revenue growth has turned south (E&P, November 2008, p. 33). They don't have to worry about retraining sales people, accustomed to pushing print, to think digitally. Jennewein is still in the process of building out a business team of about 20, with 10 to 15 of those positions in sales.

LasVegasSun.com gets about 7.5 million page views a month ? a spike started last spring ? but Jennewein hopes to see that accelerate to 15 million by the end of 2009.

Jennewein is most jazzed about the uniqueness of the Las Vegas market. Generally, local advertisers couldn't care less about traffic coming from other parts of the country; they're interested in capturing the residents in their market. Not so in Vegas. "External traffic is a plus for an advertiser," he notes, adding that the hotels and casinos want to get in front of people itching to travel to Vegas. "If we can deliver 500,000 impressions a month in the L.A. market, that is extremely sellable."

To do that, they are working with a number of networks including Centro, in order to employ rich media and video. (LasVegasSun.com is not part of the Yahoo consortium). It purchased a local job board, Recruiting Nevada, for its online help-wanted classifieds. "We want to be well positioned when [employment] comes back," Jennewein adds.

When asked about LasVegasSun.com's revenue projections, Greenspun says, "I have plans for revenue. Ask me in about a year. We made a decision to invest in what we believe is the news organization of tomorrow. It's a multi-year investment."



Not to be outdone

LasVegasSun.com may not have to worry about upsells from print, but the Review-Journal's site, LVRJ.com, has built out a recruitment site that allows them to take a somewhat similar approach. Named one of E&P's "10 that Do it Right" in 2008 for taking its recruitment Web listings and narrowly targeting them by industry, the site has about two dozen micro job sites tailored to suit specific employers and job seekers.

"A year ago we created the LVRJ job network, breaking it down by industries," says Al Gibes, executive director of Stephens Media Interactive. The site conducts quarterly live and virtual job fairs.

Peter Zollman, founding principal of the AIM Group, says he hasn't come across anything like it, at least in the newspaper world: "I don't know of any other newspaper that has been as aggressive in establishing independent niche brands as the Review-Journal has. One of the big mistakes many publishers made was to base their classified advertising online from upsells from print. The Review-Journal got around that."

LVRJ.com also hired a broadcaster, and in January plans to launch a daily video feed. Gibes says that in the past year, the newsroom is now in action 24/7 publishing and breaking news on the Web first. The site plans to expand its content by 30% this year. Its Nevadapreps.com site, which went live in August and covers high school sports, is considered a success by its parents. Traffic has been growing at 40% clips month-over-month, says Gibes. The R-J is in the process of "blowing up the newsroom," as Frederick describes it, in order to feed content to the Web as quickly as possible.

According to internal numbers, LVRJ.com and everything under its flag garners about 22 million page views a month.

While the two sites are at the same time competitive and reliant on each other, going back to the print ties, they have to contend with the local TV stations, radio stations, casinos, travel companies and the countless small-time Web dreamers and individuals who can spring out of nowhere looking for their stake in the desert.

Because in Vegas, everyone is after a piece of the action.