Picture a successful salesman, and odds are good the image will look a lot like Kirk MacDonald. The head of the Denver Newspaper Agency, which handles business operations for the Denver Post and the Rocky Mountain News, is florid and large of frame, with broad features, thinning hair and a grip that could turn granite to dust. While shaking hands, he squashes the mitt of the person he's greeting for what seems like epochs, until he's confident that the power dynamic has been firmly established in his favor. Betcha he's gone through enough of those stress-reduction balls to fill Chatfield Reservoir.
In the context of an interview, though, MacDonald is more guarded than Dick Cheney's motorcade. He stays rigidly on message, speaking in pre-processed, jargon-heavy snippets that surrender information grudgingly, if at all. When, near the conclusion of a late-January chat, he's asked if there's anything he'd like to add, his reply is more overtly candid than any of his previous statements. "Why would I do that?" he wonders.
Why, indeed? Joint operating agreements like the one that wedded the financial elements of the Post and the News in 2001 have caused quarrels and chaos in cities such as Detroit and Seattle, where a longstanding JOA may be on the verge of rupturing. But Denver has thus far avoided the most nettlesome of these problems, thanks in part to MacDonald, who has quietly formalized a match between once-hostile rivals that's both profitable and relatively free of controversy. Today the agency seldom makes headlines about anything other than good news, and that's just the way MacDonald likes it.
The choice of MacDonald, who's in his mid-forties, to head the DNA makes perfect sense. Although the joint operating agreement is portrayed as a fifty-fifty partnership between the Post and the News, Dean Singleton, owner of the former, was in the stronger position when the agreement was reached, and he wanted someone loyal to him to take charge at the agency. MacDonald, who served in numerous executive capacities at the Post between 1989 and 1998, certainly qualified -- and, as a bonus, his newspaper background echoed that of his boss in many respects.
Like Singleton, MacDonald found his way into print at an early age. He was only twelve when, with the encouragement of a favorite teacher, he marched down to the Blade-Tribune, a Solano, California, newspaper near his home, with a sports story that he managed to parlay into a succession of newsroom jobs that included ripping wire copy and penning the fish report. He stuck around the paper until he was in his early twenties, covering the San Diego Chargers along the way -- and the only reason he left was because he was promoted to publisher of a sister paper, the Oceanside Citizen. Even today, MacDonald isn't sure why his betters decided to move him from the editorial to the sales side of the continuum. "I guess it's because I had a passion for newspapers and I've always followed that passion," he says.
After a stint as press secretary for San Diego Congressman Ron Packard and a brief return to the Blade-Tribune, MacDonald moved to the San Antonio Light, where he rose to the position of advertising manager. "From a management standpoint, what I took away from that was the realization that I'm an aggressive, results-oriented leader, and I like to surround myself with people who share that point of view," he says. "That's been a common thread throughout my professional life."
In the late '80s, while still with the Light, MacDonald was attending a newspaper conference in San Francisco when he happened to wind up at a table beside the future Kathleen MacDonald, who just happened to work on the sales side at the Denver Post. The pair, who have a daughter, Meghan, toiled together briefly at the Post before Kathleen became a community-relations specialist for Ascent Sports, onetime owner of the Colorado Avalanche and the Denver Nuggets. In 1998, MacDonald was named vice president of the Hearst newspaper chain, which meant a move to New York City. But two years later, he received a call from Singleton asking him to come home and lead what would become the Denver Newspaper Agency. He knew that some JOAs had turned into quagmires, but he was confident such an eventuality could be avoided in Denver.
"For one thing, it was two morning newspapers," MacDonald points out. "It was also two brands that had loyal audiences, with circulations that were and remain close. So I expected it to work, and I think it is working." He refuses to speculate about whether the News might have folded without a JOA, saying only that "it wouldn't have been pretty." But he believes that the agreement has helped the newspapers weather a recession that's entering its second year with far fewer bruises than they would have suffered otherwise. In his view, "the owners' timing was impeccable."
True enough, because the JOA provided an excuse for the dailies to reduce the business-side workforce by around 20 percent; MacDonald boasts that this shrinkage was accomplished entirely through the use of "early retirement, voluntary buyouts and attrition." During this time, advertising and subscription rates were raised substantially in moves that produced initial squawking from the likes of American Furniture Warehouse's Jake Jabs but now prompt barely a murmur. And circulation totals have plummeted by many thousands without tearing a hole in the bottom line.
This last topic is a complicated one. Prior to the JOA, the Post and the News were circulation-obsessed, attempting to build quantity via subscription deals that, at their silliest, offered a year's worth of newspapers for just over three bucks. But after the JOA was inked, the agency hardly went to extraordinary efforts to retain such customers or to add others looking for bargains. New-subscriber offers were few, and, as MacDonald acknowledges, the agency spent considerably fewer dollars on television advertising and the like than the papers did before joining forces -- something that still remains true.
It was no surprise, then, when circulation began to tumble. As of September 30, 2002, when the most recent survey by the industry-monitoring Audit Bureau of Circulations was announced, the Post's daily circulation stood at 305,060, a drop of 4,100 copies over that date the previous year; the daily circulation at the News was 304,949, a decrease of 10,450. The weekend papers were also affected, with the Post's Sunday figures diving by over 12,000 copies and the News's Saturday sum coming up a whopping 54,000 shorter. No wonder the once-sizable number of people getting both the Post and the News on an everyday basis is down to between 6 and 8 percent of subscribers.
On the surface, this trend looks ugly, but MacDonald shows little concern for it, probably because the DNA loses money on each of the few remaining penny subscriptions it has to deliver. When viewed from this perspective, the circulation declines may actually enhance the papers' profitability, as long as they don't go too far -- and MacDonald wisely avoids defining "too far." Instead, he notes that the combined circulation of the Post and the News is the sixth highest in the nation on Sundays and the seventh biggest during the week, despite Denver being the eighteenth-largest U.S. market. He also boasts about what's known in the newspaper trade by the randy term "penetration," which pertains to the number of overall households in the area the dailies reach -- currently 65 percent on Sundays and 52 percent during the week. The DNA says that's the best penetration performance in the country. Outside the world of pornography, apparently.
"The number of households we reach -- our penetration of households -- is what we believe gives advertisers the return on their investment," MacDonald says. "Circulation is a by-product of penetration, but we look at the household penetration numbers most closely."
Demographics count, too, and an Audit Bureau of Circulations "reader profile" of the Post and News covering the time between March 2001 and February 2002 shows that most of those who receive one or the other of the newspapers are well educated (75 percent have attended at least one year of college), fairly affluent (60 percent have a yearly household income of over $50,000) and Caucasian (over 80 percent are white).
The comparative lack of minority readers at papers such as those in Denver concerns Juan Gonzalez, a columnist for the New York Daily News who's also the president of the National Association of Hispanic Journalists. So, too, does the willingness of such publications to view falling circulation as good business. In an interview last year ("The Black-and-White Newsroom," December 19, 2002), Gonzales said, "Newspapers in general have pretty much decided that minorities aren't a concern of theirs. They think it costs too much money to put the paper in the hands of a working-class Hispanic and that they'll make more money if they get upscale suburbanites to buy the newspapers. So they orient the coverage to what they think the upscale suburbanites would want. They'd rather concentrate on the suburbs and let blacks and Latinos get their news from TV."
Predictably, MacDonald denies that such thinking plays any part in the DNA's strategy. "Because we have a broadsheet and a tabloid, we can reach all the demographic segments and all the ethnic segments," he says. "We see all those areas as important." He adds that the papers are now running TV commercials, including a current campaign starring Post editor Greg Moore. But an all-out pitch for new subscribers won't happen for a while "because of market conditions. Once the market starts to grow again and the circulation and subscription prices reach the right levels, we can build profitable circulation growth."
Meanwhile, the Post and the News are hurting a bit because of a nationwide downturn in classified-advertising sales. MacDonald says that cash generated by help-wanted ads has dipped by annual percentages in the double digits, causing overall classified revenue to fall by single-digit amounts in each of the past two years.
And yet, contributions to Post-News charities have kept rolling, with the recently concluded Season to Share campaign bringing in just over $1 million, not counting a matching grant of $500,000 from the McCormick Tribune Foundation. Likewise, annual monies generated by Post-News Charities have remained in the range of $12 million per year, or about the amount they were when the JOA announcement spurred panic among members of the nonprofit community who'd grown dependent upon the competitive munificence of the dailies. MacDonald, a devout Catholic who's personally involved with Seeds of Hope, a charitable arm of the Archdiocese of Denver that seeks to assist underprivileged children, says the DNA's outreaches are "among the highlights of our company's short history."
Even so, much of MacDonald's tenure has been focused on consolidation and cost-cutting. In 2002, a new Unisys front-end pagination system was installed at the Post and the News, and advertising and circulation functions that had been handled differently by each paper were put onto the same computer network. In the case of circulation, the switch has saved the DNA dough by chopping the number of home-delivery districts from 112 to 76, reducing satellite distribution centers from 2,653 to 2,142 and trimming several hundred carriers from the payroll. That's bad news for carriers, who work as independent contractors, but because the same person now delivers both newspapers, customer service, which was sporadically abysmal after the JOA, has greatly improved.
The next step is to move the Post, the News and the DNA into a single facility -- a course that began with the decision to sell the Rocky's building to the City of Denver for $16 million. For MacDonald, sharing a roof is a priority. "I look back on our two years of operation, and I can tell you that one of the things that hasn't helped is being in two separate buildings. From an operational standpoint, it's very important for us to consolidate so we can work together instead of having to deal with issues like driving back and forth. That's been just a waste of time -- so I don't think there's any doubt that moving into the same building is the right thing to do."
Conjecture about a future headquarters continues to center on the Qwest Tower, at the intersection of 17th and Curtis streets, in part because the DNA is looking for more room than any other current business and Qwest has the most vacant downtown space available. But given questions about Qwest's practices, which have been the subject of huge spreads in the News and the Post in recent months, this location definitely comes with plenty of baggage.
"I don't believe that having Qwest as a landlord would have any influence on the editorial product," says News business scribe David Milstead, who, along with colleagues Lou Kilzer, Jeff Smith and John Accola, assembled a first-rate batch of Qwest exposés earlier this month. "But one thing I've realized in the past two years is that people in Denver don't really understand the JOA. There are sophisticated, professional people in town who still don't realize that the newsrooms are competitive. So it's an appearance issue, and it adds an unnecessary complication to the whole situation."
MacDonald's response to such concerns is to not respond at all: Beyond predicting that something will happen in this respect during the first quarter of 2004, he declines to comment. Then again, many of the remarks he does offer are so carefully phrased that they don't mean much at all. For instance, "When I arrived, I clearly staked out a position that we were going to point the company in a clear direction and pursue a clear path." More important than words are actions -- like a farewell handshake that's every bit as excessively machismo as the one that preceded it.
That's the mark of a successful salesman.
Everybody must get Stoned: Prior to and immediately after the February 1 concert at the Pepsi Center starring the Rolling Stones, the Post and the News, not to mention the local television stations, ran an absurd number of stories about the show -- a decision that reveals loads about what these outlets regard as hip. (Coming next week: an enormous spread on Herman's Hermits!) But Matt Sebastian, who was assigned to review the date for the Boulder Daily Camera, found out firsthand how little the Stones and their camp appear to care about this torrent of coverage.
When Sebastian arrived at the Can, he was told by Clear Channel Concerts representative Mel Gibson (no, she didn't star in Road Warrior) that when it came to filing his report, he would be unable to use the press box, because the band had reserved it. However, Gibson told him, she'd secured permission for him to write in his seat, using the laptop computer he'd brought with him. Laptops can be used to make bootlegs, but only if correctly outfitted -- and Sebastian's lacked the necessary accoutrements.
Roughly thirty minutes into the show, Sebastian booted up his computer, immediately attracting the attention first of an usher and later of a security guard with the Stones, who asked to see his press credentials. Sebastian responded by showing him a card from the Colorado Press Association that, he subsequently discovered, had expired the previous day. Moments later, the guard consulted with colleagues, and when he returned, he said Sebastian had to go -- not because of the expired card, but because Stones tour officials hadn't issued him their own permission to use a laptop. In the end, Sebastian wound up in the Pepsi Center parking lot, reading a very partial account of the show over his cell phone to someone in his newsroom.
As it turned out, Sebastian could have used the press box; the Rocky's Mark Brown, an older hand at the concert beat, gained access without too much difficulty. But at least Sebastian's expulsion provided him with material for an amusing column (it ran on February 14), not to mention a new appreciation for the ironies of the computer age. "The Stones should be embracing laptops," he says. "After all, how much money did they make selling 'Start Me Up' to Microsoft for Windows 95?"
Apparently not enough.
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