What the newspaper owners said before

January 20th, 2009

As executives from E.W. Scripps (possibly in conjunction with their joint-operating partner at MediaNews) decide the fate of the Rocky, it’s worth taking another look at what company executives said around the time that the Rocky and Post merged in 2001, under the terms of their Joint Operating Agreement.

 

Then, Scripps and MediaNews executives emphasized that their decision to form a government-sanctioned monopoly was about more than money but also about serving the community.

 

Obviously, the economic situation has changed, but there’s no question that, despite the fact that the newspaper industry is being transformed, these newspaper owners should fulfill their promise to Denver by doing everything possible to preserve the Rocky. Maybe they’ll fail in the end, but they should give the Rocky its best shot, even if it means losing some money in the short term. 

 

“The bottom line is, if the battle had gone on, ultimately there might have been one newspaper left here. But I think two companies that are both very responsible companies, who really care for this community, have put the past behind and said there will be two newspapers here because we will see that there are two newspapers here. And that is the intent.” — William Dean Singleton, MediaNews Group (May 2000).

“I live here, I read the Rocky Mountain News every morning. Not everything is just business; not everything is just money. We believe it was the right thing to do for Colorado.”  — Kenneth Lowe, Scripps president and chief operating officer (May 2000)

In their application to form the JOA, Scripps and MediaNews pledged to “use all reasonable efforts to maintain the status of their respective publications as leading newspapers in the Denver area and throughout the state of Colorado.”

 

One “reasonable effort” is to keep the Rocky on the sales block long enough to exhaust all efforts to find a buyer. Another “reasonable effort” is to prevent MediaNews from rejecting a capable buyer. And there are other reasonable actions that can be taken by Scripps, MediaNews, or the U.S. Justice Department.

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A role for feds in saving the Rocky

January 17th, 2009

Rocky Mountain News Editor and Publisher John Temple described on Friday a scenario under which the government might intervene to save the Rocky Mountain News.

 

During Friday’s 5 p.m. hour of the Caplis and Silverman show on KHOW, co-host Dan Caplis asked Temple whether The Denver Post’s owner, Dean Singleton, “would have the right of first refusal on any offer on the [the Rocky]?”

 

Temple responded, “First, you know I’m not a lawyer, but my understanding is that Dean Singleton of MediaNews Group, the company that owns The Post, would have the right not only to match the offer but also to say that the proposed partner is not a viable partner. But then, as you can imagine, both the Justice Department and Scripps lawyers might argue otherwise. And so that’s one complicated scenario, if there were a buyer.”

 

This is the first time, as far as I know, that a journalist from either newspaper has identified a specific action that the Justice Department might take to save the Rocky.

 

Stephen Barnett, a law professor emeritus at the University of California at Berkeley, told me in a recent interview that if a “capable buyer” emerges for the Rocky, it would be illegal for Dean Singleton to reject the buyer, based on the intent of the Newspaper Preservation Act of 1970. He says the Justice Department could intervene to force Singleton to accept the buyer. He believes, however, that Singleton’s right to match the offer of a buyer, the so-called right of first refusal, is in fact legal.

 

It’s been widely reported (as it turns out, probably erroneously) that Singleton can reject any buyer for the Rocky. For example, The Post reported categorically Dec. 5 that Singleton “can reject a buyer it considers unsuitable.” 

Dan Caplis deserves credit for asking Temple about this “fact,” because if it were true, it makes the Rocky’s plight look completely hopeless, given that Singleton has said he wants the Rocky to fold. But it’s likely not true, which is good news for the Rocky. And the Rocky needs any good news it can get at this point.

Transcript of a portion of John Temple’s interview on the Caplis and Sliverman Show Jan. 16, 2009

 

Dan Caplis: Can we ask you about some of the eye-glazing technical stuff because it may tie in to some things. First of all, obviously there’s a joint operating agreement here. And, if I remember, I may have read this in your paper, Dean Singleton would have the right of first refusal on any offer on the paper? And beyond that don’t the feds have to step in and approve? Would the feds have to approve Scripps folding up the Rocky or just a sale of the Rocky? How does all that intersect?

 

John Temple: First, you know I’m not a lawyer, but my understanding is that Dean Singleton of MediaNews Group, the company that owns the Post, would have the right not only to match the offer but also to say that the proposed partner is not a viable partner. But then, as you can imagine, both the Justice Department and Scripps lawyers might argue otherwise. And so that’s one complicated scenario, if there were a buyer. As it relates to your other question, regarding the Justice Department, again, I don’t want to pretend I’m an expert because, as you know, with matters of legal issues, there are often differing views on the same question. But I would say that Scripps said when they came here on Dec. 4 that they could have closed the paper that day, if they had wanted but that they didn’t’ want to. They wanted to find a way for the Rocky to survive, but they felt it needed to survive with new ownership with new ideas and, frankly, with a different capital structure, you know, with more money.  So, I think what they said on Dec. 4 is the best answer to your question, Dan. I think they were saying, yes, they could close the paper.
 

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More on Rocky column

January 9th, 2009

I wrote below in my last post that I’d write more about the column situation later. I think these two recent blog posts cover the issue well enough.

Posts on Westword’s The Latest Word and SquareState.net cover the essentials.

If you have any questions, feel free to email me at jason@effectcommunications.com.

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Rocky response to my column

January 7th, 2009

Here’s Rocky Editor and Publisher John Temple’s response to my blog post below. I’ll respond to some of his arguments later.

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My rejected Rocky column

January 6th, 2009

I know I’ve written some bad columns for the Rocky Mountain News over the years. But I didn’t think the column I submitted Thursday was so bad that it would be rejected.

 

In fact, I thought the column was one of my better efforts, pointing out a serious omission in local media coverage of a major story.

 

But Rocky Editor and Publisher John Temple thought otherwise, and he rejected the piece. It was the only time that’s happened since November 2004 when I started writing the “On the Media” column every other week. My editors at the Rocky have been fair during my years of freelance service. I respect them, and Temple did not fire me.

 

After much thought, I decided I should publish the rejected column on my own blog. That’s what any self-respecting independent media critic would do.

 

Also, I want to air the ideas I wrote about in my column. These ideas, from credible sources, should not be ignored at a time when any strategy to prolong the life of the Rocky, no matter how far-fetched, should be explored.
Below is the column I submitted. Its headline might have been: “Dailies Ignore Long-Shot Government Role in Saving Rocky.”
 

When a 149-year-old institution looks like it might die, you want to know what can be done about it. You count on journalists to provide this information.


But in the case of the Rocky Mountain News, which is up for sale and facing possible closure, we’ve seen no reporting about what the government could do to help the daily. It turns out that even though the Rocky is owned by a private company, the federal government can conceivably play a role in saving the newspaper.

 

To begin with, the federal government can force the Rocky’s parent company, E.W. Scripps, to keep the Rocky on the sales block for longer than the one month currently promised.

 

One month is not enough time to find a buyer, according to, among others, a financial expert cited in the Rocky itself Dec. 25. He was puzzled by the short time frame of the sale.  What gives the feds the right to meddle in the Rocky’s business transactions?


It’s called the Joint Operating Agreement, the 2001 contract between the Denver Post and the Rocky that allows them to share business operations (printing, delivery, sales), while running independent news and editorial units.
Normally, such an arrangement would be considered an illegal monopoly, a violation of federal anti-trust law. But thanks to the Newspaper Preservation Act of 1970, the Justice Department allowed the Post and Rocky to combine their business departments, to preserve two independent newspaper voices. Similar newspaper JOA monopolies are allowed in other cities.

But the joint-operating arrangement comes with a price: oversight from the Justice Department’s anti-trust division. It can intervene to make sure that a JOA newspaper, like the Rocky, is not closed prematurely or unnecessarily.  In the past, the Justice Department has intervened with joint-operating newspapers to ensure that if one of the newspaper companies in a JOA wants to close its newspaper, it must make a real effort to find a buyer, before it simply shutters the newspaper. Again, the goal, as enshrined in the Newspaper Preservation Act, is to preserve two newspapers.

 

In 1983, for example, the owner of one of the two newspapers operating under a JOA in St. Louis wanted to close its paper. The Justice Department intervened and insisted that even though the newspaper was losing money, the company make a serious attempt to find a buyer, according to a 1999 article in the American Journalism Review. Surprisingly, a buyer emerged, and the newspaper was sold and operated for two more years.  In the past, the Justice Department’s “basic standard” on this issue has been that the “newspaper be put on the market and the price be reasonable,” according to Stephen Barnett, who’s studied JOAs extensively. He’s law professor emeritus at the University of California at Berkeley with a degree from Harvard Law.  

The Department has even taken steps to make sure that buyers aren’t discouraged, he said.  This view about the apparent obligation of Scripps to seek a buyer has not been reported, and it should be. It could answer the nagging question of why Scripps is putting the Rocky on the market for a time period that’s so short as to make a sale nearly impossible.

 

Scripps could be trying to demonstrate that a sale was attempted, to deflect possible intervention by the Justice Department.  But putting the Rocky on the market for one month over the holidays looks like it’s not a good-faith effort to find a buyer for the newspaper. If Scripps makes the decision in mid-January to close the Rocky, the Justice Department could intervene and insist the Rocky remain for sale longer.

 

“I think the Justice Department might, especially in a new Administration, require [the Rocky] to remain operating for a few months or something to see if a new buyer could be found,” said Barnett.  If a buyer were found, the widely reported JOA provision giving Post owner Dean Singleton both the first right of refusal and the right to reject the buyer may be illegal, says Barnett. In a view that’s not been reported locally, he believes a right of refusal in the JOA can’t trump a “capable buyer.”

 

He adds that the Justice Department has been lax in this area of enforcement, but has “a lot of discretion in these cases, and a lot would depend on who’s in charge of the anti-trust division” and “whether there’s time for a new team to take charge.” Stephen Lacy, a professor in the Michigan State University Department of Communication and School of Journalism, agreed with Barnett.  

It’s a long shot that the Justice Department would force Scripps to keep the “for sale” sign hanging on the Rocky longer, and Scripps has not stated that it will definitely close the paper after one month anyway. Still, readers deserve to know what can be done if a premature decision to close the paper is made.
      

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Our chance to create the liberal media

December 28th, 2008

It’s tim for the liberal media to become a reality–rather than just a fictitious talking point for conservatives.

Newspapers are for sale across the country, from Florida to California, and they’re available at bargain rates. A rich liberal philanthropist should take this opportunity to buy a newspaper or two, and show conservatives that liberals can run a newspaper with a strong progressive voice on the opinion page and strict fairness and accuracy in news reporting. 

The properties to choose from include the Austin American-Statesman, Daytona Beach (FL) News-Journal, Denver’s Rocky Mountain News, and San Diego Union-Tribune, among others. Most of these newspapers are owned by public companies whose shareholders are howling because they’re watching their stock drop and hearing that newspapers can’t survive in the Internet age. 

And the fact is, newspaper circulation is dropping along with advertising revenue due to the double whammy of the recession and the migration of readers to the Internet, where newspaper articles are available for free. In particular, the loss of classified advertising to the Internet (see Craigslist) has been a huge problem for big daily newspapers, which once earned consistent double digit profits. 

These changes in the media landscape, coupled with the economic crisis, have led to the recent closure of brand name papers, such as the Albuquerque Tribune and the Cincinnati Post. But just because Wall Street is pushing public companies out of the newspaper business, and privately held media like the Tribune Company are facing bankruptcy or serious cash crunches, doesn’t mean the newspaper industry is doomed. 

Common sense says there will always be a need for mass-market advertising, and we humans seem to have an innate interest in the news, even if infotainment may be more effective at attracting the attention of so many of us than serious journalism. Interestingly, while paid circulation of newspapers is down, readership has actually increased dramatically, due to all the free visitors to newspaper websites. 

Long-time newspaper analyst John Morton believes big-city dailies will return to profitability when the economy improves, though he says the days of big-time profits will not likely be seen again. Also, newspapers are generating more revenue from online advertising, so newspaper websites will likely turn a profit some day. But we don’t know when. 

Adjustments to the familiar model of newspaper delivery may boost  profits as well, such as the experiment in Detroit, announced in mid-December, of delivering the newspaper three days per week…-and requiring subscribers to access the news online the rest of the week. 

So there’s plenty of hope for the business, which we rely on for the information we need to make decisions in the voting booth and to hold government accountable. 

But there’s a real need for philanthropists with deep pockets to cover losses at newspapers while they adjust to the changing information environment. Hence the need for those liberal donors. 

They can swoop down and show Fox News what the liberal media looks like. They can insist that their newspapers, unlike Fox, contain credible news reporting strictly adhering to the ethics of professional journalism. 

This includes not only basic fairness, but credible sourcing, fact checking, thorough research, and breadth in coverage and points of view. In so doing, rich liberals would be affirming the importance of newspapers…-and reliable information about local, national, and international issues…-in a democracy.  

Now is the time for philanthropists to step forward and create the liberal media, but do it within the confines of professional journalism.

link to this column here: http://www.minutemanmedia.org/SALZMAN%20122408.htm

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Why not comment?

December 10th, 2008

If the Rocky closes, media coverage of the state legislature and Colorado politics will take yet another hit–on top of the reduction we’ve already seen. 

Like it or not, online publications and blogs by political junkies will become even more important for airing political debate in public. 

So politicians, even if they are uncomfortable talking to bloggers, should make the exta effort to do so. 

So it was disappointing to hear Cara DeGette, a senior writer at the Colorado Independent, on online news outlet, say at a forum Tuesday that someone in the Republican Party had issued an “edict” that Republicans should not talk to the Colorado Independent. 

I asked Colorado Republican Party Chair Dick Wadhams if this was true. “Well, actually, it is,” he told me. “When I am asked about these liberal blogs that are financed by scumbags like George Soros, I encourage Republicans not talk to them. I do not believe they are legitimate journalistic entities. And I think it would be the same thing as talking to the Democratic Party newsletter. I mean, why would we do that? So I do not speak to them. I don’t read them. I encourage Republicans who ask me about it to do the same thing. I don’t spend a lot of time initiating conversations like that. No, I think they are scumbags and I don’t think we need to talk to them.”  He said he had a “fairly clear position,” and I agreed.

He said he’ll talk to free-market-oriented sites, like FaceTheState.com, and other bloggers. To Wadhams, size doesn’t matter when it comes to blogs, but their source of funding does. Plus he thinks FaceTheState practices better journalism than the Colorado Independent–a view I’ve shown to be wrong previously. 

DeGette explained to those at the forum, sponsored by Colorado Media Matters, that she doesn’t understand why some Republicans wouldn’t talk to her. She defended her reputation as a journalist who aims to be fair and accurate, and she pointed out that Republicans like former Gov. Bill Owens will speak with her. (Even Wadhams did in the past.) She pointed out that public discourse is degraded if politicians try to pick and choose which journalists to grant interviews to. And besides not talking to her makes Republicans look bad, she said. 

In a beautiful meeting of the minds, Face the State’s Editor Brad Jones agrees DeGette. “Most of the time, if [Democrats] are willing to talk to us, they come across looking much better and are portrayed in a more positive light than if they get a line that said they did not return phone calls,” Jones told me. His experience with getting calls returned from Democrats is “varied.” The Udall campaign, during the election, spoke with Face the State if a writer could catch someone on the phone when he or she called the Udall campaign office, but messages were seldom returned. Gov. Bill Ritter’s spokesman, Evan Dryer, returns calls, he says.

Overall, Jones is getting more of his calls returned over the last year than he used to.  “Would I be unhappy with an edict not to talk to me, absolutely,” he said. “Democrats are a big part of our stories.” 

Wadhams has a legitimate concern about the sources of funding from an online entity claiming to be a news outlet.  But as more local news is generated from nonprofit organizations and other strange sources–and less of it is coming from for-profit daily newspapers–it’s the reputation of the “news outlet” and the actual journalism produced that matters most–though funding sources should be disclosed. And almost any start-up blogger should be given a chance. Why not? 

But Wadhams seems to be adopting a bunker mentality toward left-leaning entities.   

He refused to join the Colorado Media Matters panel held on Tuesday, according to Bill Menezes, Editorial Director of Colorado Media Matters. The Panel included Republican former Senator Hank Brown and the conservative editorial editor of the Colorado Springs Gazette, Wayne Laugesen, in addition to DeGette and Bob Moore, Executive Editor of the Ft. Collins Coloradan and Udall Spokeswoman Tara Trujillo. 

Menezes described their outreach to Wadhams in an email to me today: After several phone calls and e-mails to which we received no response, our communications director Serena Woods finally got in touch with someone at state GOP headquarters who handles communications, who indicated they’d try to get us an answer. A day or so later she got an e-mail from Wadhams saying simply, “Not interested.” We then extended the invite to Hank Brown in order to have more conservative representation on the panel, in addition to Wayne Laugesen. The senator graciously accepted and squeezed us into a tight schedule (that’s why he left early, he had a noon appointment to make). 

I’m grateful Wadhams takes my calls, but everyone would benefit if he’d be more open, just like all politicians and their spokespeople should be–as mainstream media coverage of local politics starts to vanish.    

 

 

 

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What happened to Ewegen?

December 8th, 2008

Bob Ewegen worked at The Denver Post for 36 years, in various capacities, ending his career there as an editorial writer and columnist.

He left in mid November without a word, no note, no good-bye column, nothing, poof, gone.

I asked him via email what happened.

I don’t want to comment other than the fact that I already told my colleagues, which is that I will start working with my daughter Misty Ewegen as a paralegal in January.  I’ve already signed up for classes in legal research and legal writing at CCD.

There are some personal issues here but I have written publicly several times about my diabetes, which I was diagnosed with in 1973, just a few months after I joined The Post.  Retiring at this time will help me focus on my health.  I have also considered for years going to law school after I retired from The Post and if I can regain my full vitality, that may yet happen in 2011.

I had 36 great years at The Post but now I’m able to give my family and grandchildren the attention they deserve.  I’m not ruling out a return to journalism at some future point but at the moment my health and family considerations understandably are at center stage in my life.

Best Wishes
Bob
I hope he left The Post happily, but you have to wonder. He seems like the kind of guy who’d say goodbye in print, given the personal details he throws into his column.
Let’s hope he continues posting on Colorado Pols, at least. How many people know much more about Colorado politics than he does? Weird as he can be, you have to appreciate him and like him.

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Why Scripps wants out

December 5th, 2008

Rocky Mountain News staffer April Washington posed a rhetorical question to Westword’s Michael Roberts that has implications that go far beyond the decision by E.W. Scripps Co. to sell the Rocky. She asked, “Why does Scripps always blink first.”

It’s a good question because both The Denver Post, owned by a private company called the Media News Group, and the Rocky, owned by a public company, are both losing about the same amount of money. That’s because their joint operating agreement stipulates that the two companies split the combined profit from the operations of the two newspapers. And it’s very likely that the two newspapers spend about the same amount on their newsrooms. Both papers subtract the amount they spend on their newsrooms from their JOA profits. Assuming their expenses are about the same, both Scripps and Media News are losing about the same amount.

Yet the Rocky is selling and The Post is not. And it was also the Rocky that blinked first and lost the newspaper war with The Post, prior to the establishment of their joint operating agreement.

As a public company, under pressure from shareholders, Scripps isn’t going to wait around long for any company that it owns to become profitible, especially of the future is uncertain or worse. It can do this, and should do this, but it probably won’t. This was explained very well by Ken Doctor, a Knight Ridder official who’s now a news analyist and blogger:

“If you look at the basic math, you can see the problem, and why such shutdowns may become more numerous. Scripps reported that it lost $15 million on the Rocky in 2008. The Rocky would then be one of those 19 top 50 market papers that Dean Singleton told us were unprofitable by mid-year. That number has undoubtedly grown as we reach the end of this seemingly endless year of pain. I have little doubt that now more than half of the top 50 are unprofitable, even with the jaw-dropping cutbacks we are seeing; ad revenue continues to plummet, and the first half of 2009 looks ominous.

It’s one thing for these companies to run operations that are close to, or just above the profit line. It’s another — their shareholders and re-financing lenders remind them — to run one that is requiring subsidy. We can call it investment, but to call it that, you’d have to peg a return to healthy profitability at some point certain — and no one can do that. So it’s a subsidy.  And that’s not what public, profit-seeking companies are designed to do. The Denver JOA — JOA, a concept overtaken by marketplace and technological change — was meant to share profits, not subsidies.”

So in this situation, with millions of dollars bleeding from the Rocky, Scripps is sitting there watching its stock fall big time and its shareholders howling. The pressure is great, with so much dreaded uncertainty in the future (and Wall Street hates uncertainty), and so Scripps moves to sell, even if it is in a better position to afford it than a private company.

The private owner of the Denver Post, Dean Singleton’s Media News, is under less pressure, assuming you can fathom how it feels to be losing more the $1 million per month. But Singleton can believe in his gut feeling that the newspaper industry is in a “major cyclical decline” and “revenue will come back” in “two to three years”. He knows, and he’s probably accurate in the short term, that he’ll lose less money if he can outlast the Rocky, and he can decide, based on this, to stick with the Denver Post, for as long as he can afford it. And he can wait with the confidence that Scripps will sell first–that Scripps, facing Wall Street pressure, will blink first, as April Washington put it.

That’s what happened. And it didn’t hurt that Singleton likes owning a newspaper in his home town so he can beat up on politicians, like Gov. Bill Ritter.

This Wall-Street-driven catastrophe is at play at newspapers across America. The public companies have less room to maneuver, even if their executives understand the public interest function of a newspaper. That’s irrelevant in the end.

So the question is what to do about the information gap that’s left behind, as newspapers and other news outlets cut staff or fold? There’s no single answer, but creative ways to increase public funding for journalism (one idea was articulated by KBDI’s Wick Rowland ironically enough in today’s Rocky) is part of the solution–as are nonprofit newsrooms and philanthropic and other for-profit ventures.

One thing’s for sure. We cant count on the public companies that own newspapers and other serious news outlets. The Rocky is the proof of that.

 

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Musgrave thanked her staff!

December 4th, 2008

John Andrews doesn’t often break news on his PoliticsWest.com blog.

But he did today, reporting in his latest post that “longtime [Musgrave] staffer Guy Short assures me that employees for both the campaign and the congressional office have been not only generously thanked but also financially looked out for.”

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