The Rocky Mountain News is going down
The Rocky Mountain News began marking its sesquicentennial months before the actual date — April 23, 2009 — with the launch of a planned 150-part series spotlighting its coverage of notable historic events that took place during its life span. But the paper has also been embracing new technology even as its basic business design — printing information on paper that's then transported at great expense to the mailboxes and driveways of subscribers who are often many miles away — becomes more and more antiquated.
This collision of the past and the future took on a special poignancy on December 4, when video journalist Sonya Doctorian captured newsroom footage of John Temple, the Rocky's editor, publisher and president, and Rich Boehne, president and CEO of its parent company, Cincinnati-based E.W. Scripps, telling the paper's staff that the tabloid had just been put up for sale. That video was then loaded on the Rocky's website, along with the rest of Boehne's comments, as the paper tried to cover itself like any other story.
Neither man described the development as fatal, even though Scripps has given itself only a little over a month to find a buyer smack-dab in the middle of the worst newspaper market in the history of the industry. But the expressions on the faces of staffers such as Tina Griego, Gary Massaro and Mark Brown imply that the end is near.
It's too bad, then, that Doctorian's camera didn't capture a much less glum episode that happened shortly after the meeting broke up. Columnist Mike Littwin re-enacted a speech delivered by John Belushi's Bluto Blutarsky in the 1978 movie Animal House. In that scene, when the residents of Delta House learn that they've been expelled, D-Day (Bruce McGill) mutters, "War's over" — to which Blutarsky responds, "Over? Did you say over? Nothing is over until we decide it is! Was it over when the Germans bombed Pearl Harbor? Hell, no!"
In his column the next day, however, Littwin wasn't nearly as cocksure. He joked that the first thing he and his 231 newsroom colleagues will say on their next job is, "Do you want fries with that?"
Not that such a fate is likely to befall Littwin. Should the Rocky collapse, there's a good chance the Denver Post will hire a handful of marquee writers from its longtime rival, and he's the biggest potential catch. (Look for our shopping list on page 19.) Still, the vast majority of the Rocky journos who chose to bet their livelihood on the survival of the paper rather than taking buyouts or jumping ship over the past couple of years will be looking for work — and since precious few newspapers are hiring these days, most are likely to find employment in different fields.
The impact on the community will be harder to measure but every bit as significant. The Rocky became Colorado's first newspaper when it was founded in 1859, seventeen years before statehood, and its readership battle with the Post is rightly remembered as one of the country's last great newspaper wars. That scrap came to an end from a business perspective in 2001 with the institution of a joint operating agreement, a fifty-fifty business partnership between the papers that is overseen by the Denver Newspaper Agency. (For more on the way the JOA muddies a potential Rocky closure, see page 20.) Most observers expected the journalistic competition to end as well. But the Rocky stayed as scrappy as ever, winning a fistful of Pulitzer Prizes, and helped make Denver a more interesting place to live.
That won't change prior to mid-January, at which time Scripps execs say they will consider "other options" in the absence of a buyer. Temple thinks such a person might actually exist — or at least he's not ready to write off the possibility. "Sitting here on my desk is a poster from 1993: 'Save the New York Post,'" he says. "The Post was in much more dire circumstances than we are today. It was on its deathbed, and along came Rupert Murdoch. He bought it, and fifteen years later, it's a vibrant part of that community. I'm not saying the identical thing is going to happen here. But we'll see."
Of course, any fantasy that casts Rupert Murdoch as a white knight and the New York Post as a paragon of lively journalism has credibility issues from the get-go — and Dean Singleton isn't buying into it. The publisher of the Post and vice chairman and CEO of MediaNews Group, a nationwide newspaper chain based in Denver, Singleton doubts that the Scripps crew expects Murdoch or anyone else to show up with a checkbook. "I think if somebody walked in and wanted to buy it, they'd sell it," he says. "But I don't think even they think there'll be a buyer."
If that's true, they're not alone. Few major newspapers have been sold of late: Singleton's 2006 purchase of the San Jose Mercury News is among the most recent. Besides, there's a glut of other name properties available for purchase that are attracting little or no attention from serious firms, including the San Diego Union-Tribune and the Miami Herald — and the December 8 announcement of a bankruptcy filing on behalf of the Tribune Co., owner of the Los Angeles Times and the Chicago Tribune, underscores the illness of the print-journalism trade as a whole. So does the condition of the Rocky, which is reportedly $11 million in the red over the past nine months.
Singleton didn't cite this figure in a memo sent to his employees at the Post after the Scripps announcement, but he certainly didn't portray the Rocky as a plum, either. In his e-mail, which caused substantial anger among numerous Rocky newsroomers, he wrote that Scripps had notified MediaNews on November 19 that it planned to close the Rocky, which he characterized as "a serious drain on the performance of the Denver Post for years." Nevertheless, Singleton insists that he wasn't trying to maliciously undercut dreams of a last-minute sale. He just wanted to be straightforward with his workers, he says — and stresses that he takes no delight in the Rocky's plight.
"We entered the JOA fully poised to preserve two newspapers in Denver," he maintains. "That was our goal, that was our intention — and the economic model changed on us. It's really nobody's fault. It's not ours. It's not Scripps's. It's certainly not those that work at our newspapers. And I don't see it as us winning. There are no winners and losers in this story."
Boehne, speaking from Cincinnati following his brief visit to Denver, repeats a line he shared with Rocky staffers, maintaining that selling the paper, which Scripps has owned since 1926, was "unthinkable" prior to the recent economic downturn. Yet he admits that Scripps was mighty concerned about the Rocky long before the days of $4-per-gallon gasoline and the federal government's bailout of prominent investment banks a few months ago. He and Singleton confirm that executives at Scripps and MediaNews have been talking for the better part of two years about changing their combined business approach in major ways. "We looked and said, 'Ooof — the industry is changing, '" Boehne allows. "At the time, the economy was very strong. But even then, we would look and say, 'Are things going to hold up okay?'"
Obviously, they haven't — but the newspaper business was already taking on water long before the nation's financial system as a whole began its most recent plunge. Indeed, the industry's quandary is a decade or more in the making.
By the late '90s, press observers were already concerned about newspapers' aging audience. Simply put, the vast majority of people under forty — the most computer-savvy demographic — had decided that they didn't need to subscribe to a daily newspaper in order to stay informed. The typical editor responded by upping the youth-appeal quotient in order to make newspaper content seem more relevant to those in their twenties and thirties, who are among the consumers most attractive to advertisers. None of their efforts stopped the bleeding, however — and eventually, many managers chose to focus on serving their loyal if aging readership rather than spend time and resources on a demo with little or no interest in their product.
The Rocky appears to have chosen the latter course. During the past several years, the paper gutted its once-solid entertainment section (known as Spotlight) in a succession of cost-cutting moves, and devoted significant chunks of its dwindling news hole to ambitious multi-part narratives about incidents that took place in the distant past. The most prominent examples include two series by talented wordsmith Kevin Vaughn: "The Crossing," which dealt with a schoolbus/train accident that killed twenty children in 1961, and "The Crevasse," a mountaineering adventure tale based on a climb that took place in 1992. Tellingly, the Rocky's cover story on the day of the sale announcement focused on the thirty-year anniversary of a plane crash in Steamboat Springs, and boomer-centric references have popped up routinely since then. Take sportswriter Bernie Lincicome's December 8 column about the Denver Broncos. After referencing the 1972 hit "Your Mama Don't Dance," he offered "apologies to both Loggins and Messina [the song's performers], who could not have had in mind Brandon Marshall and Jay Cutler, since neither was born back when music was fun." That's the kind of line likely to irritate pretty much everyone born after 1980, and a good many of those who came before them.
Granted, the Rocky might have been able to survive for a longer stretch despite being rejected by younger generations were it not for another significant development: the rise of free online advertising sites. For decades, classified ads provided a huge chunk of the average daily newspaper's revenue, but that changed with the advent of Craigslist and the realization that no-charge ads were just as effective when it came to selling that old car or stereo as paying to have a notice appear in print.
This income loss was compounded by a slide in traditional advertising fueled in part by the aforementioned demographic shift and increased competition from television, radio and Internet operations. As a result, both the Post and the Rocky were in severely weakened condition even before the bottom fell out on Wall Street.
"In the last six months, things changed very dramatically — and that's not hard to do when you have a business that has a lot of fixed costs," Boehne says. "When you factor in the economic crisis and the housing crisis and the effects on the general economy, very quickly you don't have a discussion. You have a problem."
The unusual newspapering balance of power in Denver made overcoming these obstacles all the more difficult. Over the past half-century, the mammoth costs associated with print journalism led to a steady decline in the number of cities with competing dailies. As of today, only a handful of very large metro areas — New York City, Chicago, Boston et al. — have independent papers that go head to head, and plenty of others lost their second daily quite some time ago. For instance, Dallas became a single-newspaper town when the Dallas Times Herald shut down in 1992, and Houston followed suit three years later thanks to the closure of the Houston Post. Both of these papers had been owned by none other than MediaNews's Dean Singleton.
A highly literate citizenry and Denver's status as a regional hub helped the Mile High City retain two daily newspapers, as did the joint operating agreement between the Post and the News. Blessed by the U.S. Department of Justice, the pact let both papers consolidate business operations under the auspices of the Denver Newspaper Agency, thereby generating significant savings. But the DNA also spent big bucks on a pair of expensive projects: a new headquarters at 101 West Colfax Avenue for the agency and both papers (reported price tag: $88 million), and a high-tech press capable of printing both the Post and the Rocky (overall tab: $130 million-plus).
These ventures were set in motion during the early years of the JOA, when it was possible to interpret the burgeoning popularity of Craigslist and the like as complications capable of being overcome as opposed to potentially lethal gutshots. But by the time they opened for business — the DNA building was dedicated in December 2006 and the press, at 5990 Washington Street, began spitting out papers in September 2007 — plenty of people inside the newspapers and out wondered if the expenditures had been a good idea. Note that Scripps specifically mentioned "approximately $130 million in long-term debt resulting from a recently completed consolidation of production facilities" as one of the reasons it's selling the Rocky. Singleton isn't second-guessing the moves, though.
"The decision about the printing press was made based on economic savings for the agency, and it exceeded our goals," he says. "If we didn't have the printing plant, we'd be far worse off than we are today. The press wasn't bought for the sole purpose of improving quality. It was bought to save money, and going to new technology saved the agency more than $30 million a year." The tune is much the same in regard to the pricey new HQ: "We had to combine into one building, because neither of our old buildings worked. And the building costs us very little more than what the old rent cost. That hasn't affected us negatively, either."
What has, according to Singleton, is the Rocky's tabloid format, whose smaller size in comparison with the Post's broadsheet pages equates to less dough rolling in to the DNA. "Go get a paper, and you'll find 126 inches on a full-page ad in the Post and 56 inches on a full-page ad in the Rocky — and the inch rate's the same," Singleton says. "It's mathematics, simple as that." As such, he goes on, the Post is in better shape than the Rocky, which may sell a few more copies on a daily basis (something Temple emphasized in his December 6 column) but is poised to lose $15 million in 2008, according to Scripps.
These claims about the Post's relative health may be true, but there's no way to prove them. Scripps is a public company, so all of its financials are available for perusal — but MediaNews is privately held, and Singleton keeps the data to himself. That makes the Rocky story "a very difficult one for journalists to cover," Temple believes. "There's very little known about his financial resources. Only what he says."
Rocky business writer David Milstead knows what Temple means. Back in June, a Standard & Poor's analyst told him that MediaNews was in danger of defaulting on its debt by year's end and might be forced to renegotiate with its lenders, as it had the previous year. So how did Singleton counter this assertion? By telling Milstead, "That is their opinion."
As for the views of Rocky staffers contacted by Westword, they tend toward the theory that MediaNews Group is hurting every bit as much as is Scripps, if not more — but Singleton's simply better at bluffing. Hence reporter April Washington's rhetorical remark: "Why does Scripps always blink first?"
Boehne doesn't much like the implications of this question. "The idea that we blinked really comes out of trying to relive, or continuing to live, the newspaper war," he says. "Because economically, these two newspapers are joined at the hip, and we had to make what we thought was the very best decision for the Rocky Mountain News in the long term."
This statement only makes sense if Boehne truly believes that a buyer for the Rocky can be found. But Scripps's recent past argues otherwise.
Last year the company spun off its more profitable cable holdings, including HGTV and the Food Network, into a separate firm, Scripps Networks Interactive — a tactic that thrilled investors, who sent the new SNI stock soaring. Meanwhile, E.W. Scripps moved quickly to rid itself of its most unprofitable newspapers, including two that were part of existing JOAs. The Cincinnati Post had sentimental value, since it was based in Scripps's home city, but it had lost money for ages, and its partner paper, the Cincinnati Enquirer, had formally announced that it wouldn't renew the JOA, which expired at the end of 2007. For that reason, Scripps didn't go through the motions of announcing that the Post was for sale before pulling the plug, as it had with the Albuquerque Tribune. Boehne said nice things about the Tribune when the sale news was made public in late August, just as he's doing now when it comes to the Rocky. But no buyer materialized, and the Trib ceased operations in February.
Even so, Temple doesn't feel that "this is some bogus attempt to sell. The owners believe that erring on the side of seeing what is possible is a better way to approach things than not to do that." And notwithstanding evidence to the contrary, Boehne insists that Scripps wants to remain in the newspaper business. But right now, he says, "large metro markets are much more difficult than mid-size markets. There's more competition, so you might have a lower penetration rate, and you've got to cover a lot more geography with a physical product that you print and bag and deliver every single day."
Given that reality, who in their right mind would want to take a chance on the Rocky? While Boehne says Scripps has gotten offers for the paper in the past, he won't identify such potential buyers or say how long ago this interest was expressed. (Best estimate: a minimum of five years, and probably longer.) So he paints a picture of a "third party" with "a different view of the business or deeper pockets."
To most locals, the only Denverite who fits that description is billionaire Phil Anschutz, who parlayed railroad holdings into a media empire that includes assorted physical and online newspapers arrayed under the Examiner name. But the same day the for-sale sign went up on the Rocky, Jim Monaghan, speaking for Anschutz, who doesn't do interviews, denied that his boss might be convinced to invest. It was an assertion that Rocky reporter Jeff Smith juxtaposed with a statement by Tom Rosenstiel, director of the Pew Research Center's Project for Excellence in Journalism organization, who said, "If you're interested, the best way to approach it is saying you're not interested."
In response, Monaghan declares, "I'm too old to play those contorted games. I always love experts who don't know anything about deals and talk hypothetically.... It's something we're really not pursuing."
For those who might think about doing so, Circuit Media editor Don Knox, who served stints as business editor at the Rocky and the Post, offers an idea about how the paper might be rescued. "Just do a bankruptcy for the DNA," he advises. "Change the equity and extend the lease payments. After all, it's got $300 million in revenue. That doesn't sound like a broken company to me. That sounds like a company with challenges — but in 2008, there are a lot of companies with challenges."
Trouble is, Singleton would have to go along with a bankruptcy plan, and he's adamant that he wouldn't do so. Moreover, the fine print of the JOA gives him the right to purchase the Rocky himself (a prospect he rejects) or approve of any potential buyer — and it certainly sounds as if no one could satisfy his criteria. "The bottom line is, to continue with two newspapers would mean the death of both," he says. In contrast, he thinks the disappearance of the Rocky would give the Post a fighting chance to outlast the current recession: "It would take the profit the DNA makes and fund one newsroom. So it would certainly make it viable — but not a cash cow."
The Rocky, for its part, seems bound for the slaughterhouse, and many of its employees wonder how long their superiors have known its fate. In early November, Scripps announced layoffs of around 400 workers, but the Rocky was exempted — something managing editor Deb Goeken mentioned to staffers shortly thereafter in an apparent attempt to boost morale. But less than two weeks later, unbeknownst to the main workforce, Media-News and Scripps executives huddled, and Singleton says he was told at that time that the Rocky would be shuttered. Boehne disputes this interpretation, albeit gently. "I guess his comments would suggest what outcome he would most desire," he offers. "But is that the clear conclusion? I think it is not."
Whatever the case, the Rocky now finds itself in limbo. New subscription sales will grind to a halt, and the advertising staff is sure to have a tougher time convincing businesses to put their money into the paper. To make things worse, reporters and staffers will double their efforts to find new jobs — and Temple doesn't blame them, as long as they are up front with him.
"I would never stand in the way of somebody leaving here if they thought they had a better opportunity," he says. "I might tell them what I think of the opportunity, and I often have. But if people find opportunity, God bless them. I'll support them, and we'll find a way to put out the paper. We can do that. I guarantee it." Likewise, he warns those who stick around that he won't relax his standards in light of recent events: "If people aren't going to work to pick up their load, I've got a problem with that, because it means somebody else is going to work harder. We have a responsibility. We're being paid. We're professionals. And we should do our best to live up to the history of this newspaper, and do our best to position us so that if it can have a future, we've done nothing to damage it."
In other words, Temple doesn't want his staff to follow Littwin's Animal House example too literally, engaging in what actor Tim Matheson's Otter describes as "a really futile and stupid gesture" before going down in flames. And if, a month or so from now, Scripps announces that the Rocky's life will end at 149 — or maybe on that 150th birthday — newspaper lovers in Denver will still have the Post. Although maybe not forever.
"I am as committed to Denver as I ever was," Singleton says. "But I'm also committed to solvency, and the economic circumstances that all newspapers find themselves in today has a tendency to change some of our long-term goals. We have to play the cards that are dealt to us."
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