By Alan Prendergast
By Michael Roberts
By Michael Roberts
By Amber Taufen
By Patricia Calhoun
By William Breathes
By Michael Roberts
By Melanie Asmar
It's been over a month since the official deployment of the Denver dailies' joint-operating agreement, and the chaos has hardly calmed, particularly in a business sense. Publicly, the Denver Newspaper Agency, which handles all non-editorial functions of the Rocky Mountain News and the Denver Post, insists that plummeting circulation and advertising volume are of no serious concern. But behind the scenes, DNA reps are scrambling to retain clients even as other media operations are busily luring new dollars their way. Moreover, this free-for-all is unlikely to be over anytime soon. According to Marv Rockford, vice president and general manager of Channel 4, one of the area outlets to see an uptick in sales, "I think we're talking about many months, and perhaps even a couple of years, before things settle out."
All is not awful for the News and the Post, especially in terms of labor. In April, News editorial types ratified a new long-term contract, joining their brethren at the Post, who have inked a nearly identical pact. Since DNA business-siders are also under contract, these arrangements squelch the threat of strikes for years to come: Says Tony Mulligan, administrative officer for the Denver Newspaper Guild, "We're solid through 2008." In addition, a voluntary buyout offer made to over 300 workers in the production department last month is, to all appearances, running smoothly and hasn't triggered a notable public-relations hit.
Which can't be said in several other cases. Since the early-April debuts of the JOA-imposed weekend editions, DNA operators have been besieged by complaints about confusing TV listings, and many readers have also been baffled by production idiosyncrasies like varying page sizes and, in the May 13 Post, the splitting of the gargantuan comics section into two halves located in different parts of the paper. Likewise, the two-week absence of Monday-Thursday listings for Landmark Theatres venues such as the Mayan dismayed folks more into Memento than The Mummy Returns. Michael Williams, a Landmark spokesman, blamed the situation on ad-rate hikes that the chain was unwilling to pay given its current financial situation: Landmark's parent company, Silver Cinemas International, is bankrupt. (Oaktree Capital, described by Variety as a "vulture fund" that frequently partners with Denver moneybags Phil Anschutz, purchased Silver Cinemas at auction late last month; the deal is expected to close shortly.) Landmark eventually returned to its place in the so-called "Movie Timeclock," but only after a monetary compromise was reached.
The DNA doesn't like to talk about such arrangements, which can't help but recall the recent newspaper-war days when rate cards were widely ignored. Although agency spokesman Jim Nolan concedes that some new ad packages have been created to entice reluctant buyers, including a Monday-Thursday "introductory program" aimed at small businesses, he specifically denies rumors that rates have quietly been cut in the wake of widespread advertiser defections. Yet bargaining is taking place, and on a greater scale than has been acknowledged thus far. Mattress Factory, a major bedding firm that dropped out of the dailies when rates skyrocketed, returned to the Post on May 10, and according to a reliable source, it did so after DNA sales reps substantially lowered the take-it-or-leave-it price tag they presented mere weeks before. (Mattress Factory representatives declined comment.)
Nevertheless, ad totals in the average News and Post are down noticeably, and the words in some of those that remain carry a sting: One Tattered Cover notice sported the lines, "Due to increased advertising rates, we can no longer include all current events in this weekly ad."
That's not to mention updated circulation figures released by the Audit Bureau of Circulations on April 30, in which the Post's daily average dove by 11.9 percent and the News's fell off by 17.9 percent. In some ways, these dropoffs help. The DNA saves money when people cancel subscriptions bought at penny-a-day rates, and it does the same when a slimmed-down paper generates the same ad revenue as a fatter one did; the result is more profit per page. That's the tune the DNA's Nolan is singing, anyhow. "We're still transitioning to a new business model, one that moves from volume selling to value selling, and things are going pretty much as we anticipated," he says. "We're seeing a lot of the old free and heavily discounted advertising wash from the system, and that helps us in the long run."
Still, those advertisers need to go somewhere, and they're finding plenty of media outlets willing to welcome them aboard, including the Denver Daily News, a Monday-Friday newspaper whose first edition hit the streets last week. The Daily News's initial circulation was 1,000, with distribution focused on the downtown area, and while publisher-editor Mike Kirschbaum expects the numbers to grow by 1,000 copies per week, making that happen will be difficult given the paper's modest, eight-page size and dearth of original articles (the May 11 issue was dominated by copy ripped from the Associated Press wire). But Kirschbaum is optimistic and says the situation at the dailies hasn't hurt his cause. "We didn't time our launch to the JOA," he says. "But the JOA environment makes things a little more relaxing for us."
Russ Littler, president of The Employment News, sees the JOA as something more -- a golden opportunity. Littler's Denver-based company, which has branches in ten cities, produces weeklies specializing in job-oriented classified advertising, a longtime cash cow for daily newspapers that's trending downward nationwide due to increased competition from the Internet and other venues. (For example, recruitment advertising in the mighty Washington Post dipped a stunning 30 percent during 2001's first quarter.) Over the years, Littler has occasionally run radio ads in Denver touting The Employment News, but in the wake of the April jump in DNA rates, he authorized his company's largest local campaign to date -- a blitz of radio and (for the first time ever) television spots declaring that an ad in The Employment News costing a few hundred dollars would go for several thousand bucks in the Sunday Post. This approach has been effective, Littler believes; he's seen significant declines in other markets because of the soft economy, but his cash flow in Denver is holding steady.