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Owner of Vegas paper takes part in Zell’s gamble

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Los Angeles Times Staff Writer

Sam Zell may have found his newspaper guru in an unexpected place: Las Vegas.

In what could be the first in a string of surprises for Tribune Co., the parent of The Times, it emerged Thursday that Brian L. Greenspun, the owner and editor of the Las Vegas Sun, has made a “significant” investment in the newly private company -- the only outside investor that Tribune’s new chief, Sam Zell, permitted to participate.

He is also the only newspaper executive Zell appointed to the new Tribune board. That’s an intriguing role, given Greenspun’s professed commitment to the civic responsibilities of the news business and to finding ways to keep information flowing to a public that may be losing the taste for reading it on paper.

“If you believe that the media has a responsibility to educate the public about the issues of the day, then we have to figure out a way to reach people,” he said in an interview Thursday.

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Greenspun, 61, has also been remarkably successful as a Web entrepreneur: His company collects a commission on every flight, hotel room and concert ticket booked through its Vegas.com, which he claims is the largest city website in the world.

That’s an achievement that may have piqued the interest of Zell, who has suggested that expanding Tribune’s offerings in interactive media will be a key to its growth.

Zell did not disclose the size of Greenspun’s stake in the newly private Tribune beyond indicating that it was a “significant” minority share of his own $310-million equity investment. Greenspun said in a telephone interview that it was “significant enough to command a good portion of my time and attention, but not so large that it will in any way interfere with what Sam Zell wants to do.”

He also disavowed any formal role as an advisor to the new Tribune chairman and chief executive. “I hope he asks me my opinion,” he said of Zell. “But more often than not I may be asking for his opinion.”

Still, the investment catapults the owner of a Las Vegas daily with circulation of 170,000 into the national media spotlight. The Las Vegas Sun has a long and colorful history but an economically checkered one. It was bought by Greenspun’s father, Hank, in 1950 a few months after its founding by striking union press operators from the Las Vegas Review-Journal. Hank Greenspun, a legendary character in a city populated by oddballs, picked fights with many of the biggest powers in town -- the FBI and Howard Hughes among them. The Sun still proudly claims to have been the first newspaper to expose Sen. Joseph McCarthy as a demagogue.

Starting in the 1980s, the Sun was propped up by a joint operating agreement with the larger Review-Journal. The Sun would have “ceased to exist in 1990” had it not been for the arrangement, said Sherman Frederick, the publisher of the Review-Journal, who regularly trades potshots with Greenspun in editorials and columns. “So as a daily newspaper operator it is impossible to evaluate Brian Greenspun’s acumen.”

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The Sun’s circulation had fallen to a meager 24,000 in 2005, when the joint operating agreement was renegotiated. Under the new arrangement, the Sun became a 10-to-12-page section inserted into the daily Review-Journal. That effectively increased its circulation sevenfold. The deal further provided the Sun with a reliable income stream that it deployed into a hiring binge -- rare in this era of newspaper budget cuts -- and into a thorough redesign of its website, to be rolled out next month. People who have seen a prototype say it will be heavy on interactive features.

It also allowed Greenspun to devote his newspaper exclusively to features, investigations and other in-depth reporting while ceding day-to-day breaking news to its rival. In his view, that makes the Sun a model of the newspaper of the future.

“The printed newspaper will have more enterprising, substantial writing,” he said, “and the Internet will look more like the daily newspaper of today -- breaking news will go online in minutes. But the combination of the two will better serve the community.”

The new Sun has garnered mixed but largely positive reviews. “The Sun has become a remarkably good newspaper,” said Steve Sebelius, the editor of Las Vegas CityLife, an alternative newspaper owned by the Review-Journal’s parent company. “It’s undergone a pretty remarkable transformation.”

But critics also accuse Greenspun of using the Sun to support and protect his friends and business associates, who include real estate developers and casino operators.

“Probing questions and divergent thought -- especially when it comes to friends and foes of the Greenspun family and business interests . . . [are] strictly forbidden,” Frederick said. “All this goes to credibility.”

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Critics point to the Sun’s championing of a 2006 real estate deal concocted by Billy Walters, a friend of Greenspun’s and a local golf course developer, which the Sun characterized as a gold mine for the city and a sacrifice for Walters; opponents said the opposite was the truth.

In another episode, Greenspun used his Sun column to attack an investigative story in his own newspaper about a Nevada Supreme Court judge who raised a $500,000 campaign fund despite running unopposed. He wrote that the article was unfair to the judge, a “dear and old friend” who had raised the money before learning he would have no opponent.

Asked about the incidents, Greenspun said, “I look at people who get pounded by the press and sometimes take their side.”

Sun Managing Editor Michael J. Kelley called the case of the judge “touchy” but said Greenspun does not interfere with news coverage. “He believes really strongly in good journalism and is willing to support it with money,” he said. “He’s on the side of the angels journalistically.”

How much influence Greenspun will have with Zell remains unclear. He said he has known Zell for 15 or 20 years but that their relationship was “very casual until this year.” He said the investment in Tribune did not originate as his initiative but was vague about how he ended up as the only investor whom Zell allowed in the door. “We kind of see eye-to-eye on what the media’s role needs to be in the future,” he said.

michael.hiltzik@latimes.com

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