Dean Singleton's giant balls
This morning, both Denver dailies feature articles spurred by a Denver Post memo sent out in response to "Scripps Says Post Violates JOA," a January 28 Rocky Mountain News report based on a leaked letter reportedly penned by two executives at E.W. Scripps, the Rocky's owner. The latter piece, by staffer David Milstead, asserts that the Post borrowed $13 million from the Denver Newspaper Agency, the operation that handles business matters for both papers, in order to fund its newsroom -- an action that can't be repeated anytime soon, since the DNA's credit line is as exhausted as contestants on The Biggest Loser after this week's football challenge.
The first paragraph of the Post offering, "Battle Escalates Between Post, News," is particularly telling, in that it references the "Denver newspaper war." This term has seldom been used since the papers joined forces in a joint-operating agreement earlier in the decade, but it feels apt right now. There's currently more acrimony between employees at the paper than there's been in years, and the aforementioned memo should further inflame emotions. Although Dean Singleton, the head of MediaNews Group, the Post's owner (pictured), isn't listed as its author, it fits his modus operandi perfectly. After all, the text disputes negative information loudly and passionately without providing any real evidence that what's been said is false even as it takes a well-aimed shot across Scripps' bow.
As correctly noted by Rocky editor/publisher/president John Temple in a comment included in his paper's latest offering and the Post's effort, "The Post statement does not cite a single error in the story." But keeping things vague has been Singleton's strategy all along. Because MediaNews Group is a private company, he's not required to divulge a great deal of sensitive data, and so he doesn't -- and his silence proves powerful.
In other respects, though, Singleton -- or at least his proxies -- have been the opposite of quiet. Take the following segment from the memo:
If The Rocky Mountain News is sold, The Denver Post intends to exercise its options to buy all of Denver Newspaper Agency, and Denver Newspaper Agency and The Denver Post will be consolidated. In either case, The Denver Post and the Denver Newspaper Agency will become one organization and will publish only The Denver Post. At that time, the intercompany balances between The Denver Post and the Denver Newspaper Agency will offset, and the combined company will be recapitalized with a plan to successfully move The Denver Post into the future.
This passage essentially declares that whether or not the Rocky shuts down, MediaNews believes that it will be able to buy Scripps' portion of the DNA -- probably at a fire-sale rate. If so, the cost of that $13 million loan, or whatever amount the Post borrowed, would be considerably reduced, to perhaps pennies on the dollar. Just as important, the section tells potential Rocky buyers not to assume they've got a built-in sales force, printing plant and so on. The infrastructure would have to be reconstituted, and that ain't cheap.
Singleton may indeed be in dire financial shape. Nevertheless, this memo demonstrates that he's not ready to raise the white flag in Denver. He wants everyone to believe he's ready for war under the assumption that neither Scripps nor any other company thinking about purchasing the Rocky has the belly for a fight in this economy. There's risk aplenty in his approach, but it's the sort of gamble Singleton has made, and won, many times during his controversial career. While critics may question his motives, they shouldn't doubt the size of his balls.
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