Las Vegas Is Blase About Plan to Merge Newspapers

Usually, a proposal to merge two newspapers into a monopoly evokes all kinds of protests.

But so far in this desert city, the plan to merge the Las Vegas Sun and Review Journal, while keeping separate news and editorial staffs, has barely generated so much as a spark amid the local neon.

Sergio Lalli, managing editor of the Nevada Casino Journal, a trade magazine covering the gaming industry, has taken out small ads in both papers trying to raise a protest.

After some trepidation, the local chapter of the Society of Professional Journalists is meeting to discuss the plan.

The affected unions have complained about the jobs that will be lost in the consolidation of the business and printing side, but other unions have remained silent. And one state senator has offered criticism, though the congressional delegation is in favor.

In contrast, in such cities as Seattle or Detroit, citizens’ groups have demanded and won public hearings and have sued when the local papers proposed similar so-called newspaper joint operating agreements, which grant special exemptions to federal antitrust laws under the Newspaper Preservation Act.

Enormous Sway

Still, the concerns raised quietly here are the usual ones: that one newspaper agency will have the power to dictate advertising rates; that it will smother potential competition, and that, despite assurances to the contrary, two newspapers that are business partners cannot truly be editorial rivals.

Some evidence suggests that the papers already have enormous sway over advertisers, particularly in the absence of much suburban competition. For instance, both papers already have enough clout to charge hotels a higher rate for ads than other businesses. And Donrey Media Group owns so much in Nevada--from the papers in Carson City, Las Vegas and Ely, to one of the country’s biggest outdoor billboard companies, to radio stations and a Reno TV station--that it already is a force with advertisers.

Smothering competition may be less of a concern. At present, neither paper does much specialized coverage of suburban areas and thus may be vulnerable to suburban upstarts. Already since the merger was announced, one suburban weekly has started up.

As for preserving the editorial spunk of the Sun, some evidence suggests things could be different from now on. Even Sun President Brian Greenspun admits that he no longer feels the same animus toward his newspaper rival, nor does he expect to refer in print to Donrey Chairman Donald Reynolds as “Uncle Piggy,” as his father did.

“Honestly, that’s changed,” Greenspun said. “He’s saving this newspaper for whatever his motives.”

Studying Plan

One reason for the quiet here is that the Sun is not owned by a large chain, as the so-called failing paper is in Detroit. Chains, with their great wealth, usually have a hard time persuading the public that one of their newspapers is failing, which is what is legally required under the Newspaper Preservation Act.

Readers in Las Vegas may also be more likely to believe that the Sun is really in trouble. In a wrinkle that analysts say is unprecedented in the history of such mergers, the Sun is giving Donrey Media Group $20 million worth of cable company stock and is taking only 10% of the combined newspaper profits. Usually, the profit sharing is more equitable.

The Justice Department’s antitrust division is now studying the merger plan.