Rocky Mountain News for sale

Publisher E.W. Scripps Co. is putting its flagship newspaper, the Rocky Mountain News, up for sale in a move to stem major financial losses. Newspaper analysts said that the prospect of selling the News may be slim and that Thursday’s announcement could be a prelude to shutting the paper down.

Cincinnati-based Scripps said it will try to sell the newspaper until mid-January, at which time it will “examine its other options for the future of the Rocky Mountain News.”

Scripps president and chief executive Richard Boehne said in an interview Thursday that the newspaper company no longer can absorb the News’ losses, which he estimated at $11 million through the first nine months of 2008.

Newspapers across the nation are struggling with declining advertising revenue and fewer subscribers as readers shift from print editions to online news. The recent economic downturn has compounded the problems.

“We have a fairly bearish view for the next few years,” Boehne said. “We really need to stem our losses.”

Mark Contreras, Scripps senior vice president of newspapers, said the Denver daily is the company’s only unprofitable newspaper.

The News, founded in 1859, is believed to be Colorado’s oldest continually operated business.

Selling or closing the newspaper would end Scripps’ 102-year presence in Denver newspapers. The company founded the Denver Express in 1906, then merged it with the News in the late 1920s.

Boehne made the surprise announcement Thursday morning in a somber newsroom gathering. The News employs 220 reporters, editors and photographers, he said.

“We were shocked,” said veteran News reporter Lynn Bartels. “What makes it worse is just a few weeks ago, (managing editor) Deb Goeken came out and told us we were OK, that the layoffs announced by Scripps would not affect us.

“Shocked is too mild of a word. There were tears, anger. But journalists are the kings and queens of black humor. Soon we were making jokes, like all going out to lunch on the company credit card.”

Business reporter Gargi Chakrabarty had a slightly different take.

“The mood, surprisingly, seems normal,” she said Thursday afternoon. “I can hear people typing, talking to sources on the phone, laughing probably at some jokes. Most of us have been assigned daily stories, so we are focusing on the job on hand. It will take awhile to process the shock and begin to weigh our options.”

Independent and competitive

Since 2001, The Denver Post and the News have operated under a joint operating agreement in which advertising, circulation and business operations were merged while the two newsrooms remained independent and competitive.

As part of the JOA, both the News and The Post publish Monday through Friday, the News publishes Saturday and The Post publishes Sunday. The News’ daily circulation is 210,000; its Saturday circulation is 457,000.

For the first few years of the merger, Scripps and Denver Post owner MediaNews Group made money from sharing profits of the parent Denver Newspaper Agency. But with a soft economy and deterioration in the publishing sector, both papers now are losing money.

Boehne said Scripps will make an effort to find a buyer for the paper and its 50 percent share of the DNA, but he acknowledged that shutting the newspaper down is possible if a sale can’t be negotiated.

“You can’t say never,” he said of the prospects for a shutdown. “It would be foolish to claim that’s not out there. But don’t write our obituary yet.”

Denver Post publisher William Dean Singleton said Scripps officials told him last month that they intended to close the News. Yet, he said, Scripps gave him no notice of Thursday’s announcement.

“I don’t believe anybody thinks the Rocky can be sold,” he said.

In a memo to employees, Singleton said the News “has been a serious drain on the performance of The Denver Post for years” because it generates less advertising revenue than The Post, yet its non-newsroom costs are shared equally under the joint operating agreement.

Not enough profit for two

Singleton said that for the past two years, Scripps and MediaNews Group had held discussions about consolidating to one newspaper, but an agreement never materialized.

“This market produces enough profit for one newspaper, but not for two newspapers,” he said.

If Scripps decides to close the News, it must provide notice to the U.S. Department of Labor under the Worker Adjustment and Retraining Notification Act. WARN notices must be filed by firms with 100 or more employees who lay off more than a third of their active workforce.

Journalism analysts said there are few prospects for a buyer to pick up the News.

“The odds of finding someone now are slim to none,” said Stephen Lacy, a journalism professor at Michigan State University. “Borrowing the money to pay for the Rocky would be very, very difficult. I suspect it will either close or be sold at a cut-rate to Media News.”

Some speculation centered on Denver billionaire Philip Anschutz as a buyer. He operates a chain of several free newspapers and websites across the nation under the Examiner name.

But Anschutz spokesman Jim Monaghan downplayed the rumors. He said Anschutz “is not interested in this transaction but is monitoring it to see what happens.”

The Scripps news caught Denver’s municipal leaders by surprise, though they said they had feared the city’s status as a two-newspaper town wasn’t sustainable.

“Fortunate” to have both

“It’s hard to imagine Colorado without the Rocky Mountain News,” said Mayor John Hickenlooper.

Denver Councilwoman Jeanne Faatz said she had just mailed in her check for her subscription to both newspapers earlier that day and had paused at that time to wonder what the future would bring for the newspapers.

“We have been so fortunate to have two magnificent newspapers,” Faatz said. “I sincerely hope we continue to have two newspapers. It just breaks my heart, and my reaction would be the same if it had been The Denver Post.”

“I think it’s a tremendous loss,” said Denver Councilman Charlie Brown. “Anytime you lose competition, everybody loses. We’re losing history here. It’s a sad day for the city and county of Denver and the state of Colorado. This is a big blow for journalism.”

As news of the Scripps paper’s change in fortunes spread through the Capitol on Thursday, lawmakers expressed dismay that an important voice in Colorado politics is at risk of being silenced.

In politics, where competition to be heard is fierce, lawmakers such as state Sen. Shawn Mitchell said Colorado has benefited greatly from dueling papers.

“There are dozens of different issues where I thought each paper added a unique and important perspective. I hope the Rocky finds a buyer,” said Mitchell, R-Broomfield.

“The announcement didn’t surprise me,” said Don Elliman, director of the Colorado Office of Economic Development and International Trade. “The newspaper business in its traditional form has taken a pounding. It’s a sad day. We’d lose some real assets at the Rocky. But it will be what it’s going to be. There’s not a hell of a lot you can do about it.”

Little hope for a News buyer

Wayne State University journalism director Ben Burns said he has little hope that a buyer for the News will surface.

He described purchasing a daily newspaper in current market conditions as “like buying an anchor that’s already been thrown overboard.”

“The prospects for a sale are dreadful,” he said. “The rumor mill has half the daily newspapers in the country for sale, and nobody is buying. This is perhaps the worst market for selling a newspaper in the past 100 years.”

E.W. Scripps this year spun off its cable TV networks into a separate company, Scripps Networks Interactive Inc., which includes HGTV, Food Network, DIY Network and Fine Living Network.

E.W. Scripps now owns or operates newspapers in 15 markets and has 10 TV stations. Its other holdings include United Media, distributor of the “Peanuts” and “Dilbert” comic strips and 150 other features.

E.W. Scripps Co. stock closed Thursday at $2.32, down 1 cent.

Staff writers Jessica Fender, Mike McPhee, Christopher Osher, Aldo Svaldi and Andy Vuong, and Bloom- berg News, contributed to this report.
Steve Raabe: 303-954-1948 or sraabe@denverpost.com

Originally Published: December 4, 2008 at 2:41 PM MST