Last week, we told you about the Denver Post's latest buyout offer
, which aims to trim 26 jobs
and take the newsroom staff down to just over 100 employees — more than fifty fewer
than at this time last year.
But if you think the reason for such a move is because the Post
is bleeding red ink and must act desperately in order to keep the lights on, think again.
We're told by multiple reliable sources that the Post
isn't just profitable, but that profits have been rising steadily of late.
's profits at the end of the most recent fiscal year were north of $25 million, these sources say.
Moreover, they go on, the profits have been rising at a rate of approximately $2 million per annum in recent years — and the expectation is that this trend will continue in the next fiscal year as well.
That isn't to suggest things are going swimmingly. Business insiders say the amount of money coming into the Post
from what's known as "pre-print" — advertising inserts — is down significantly as a result of numerous big box stores dropping or decreasing ad buys.
Yet the last year the Post
lost money was 2009, thanks to costs incurred when shuttering the Rocky Mountain News
, the broadsheet's partner in a joint-operating agreement, sources say. And the Post
had registered an annual profit for at least two decades prior to that.
At its peak, the Post
's newsroom was staffed by more than 300 employees — but it will likely be about one-third that size in around a month-and-a-half. Staffers were given 45 days from the time they received buyout packages to decide if they'll accept the offer, which includes two weeks' pay for every year of service plus an additional four weeks.
During the meeting at which the buyouts were announced, sources say Post
publisher Mac Tully acknowledged that the paper was profitable — an admission that left some employees wondering why the buyouts were necessary.
But if the paper doesn't need to cut its way to profitability, why was the offer made?
Speculation among our sources centers on Alden Global Capital, the hedge fund that controls Digital First Media, the Post
's current owner, and ADC's suspected doomy opinion about the future of print journalism.
The theory goes something like this: Alden feels confident that print will be going away over the course of the next ten years or so, and given this eventuality, the only logical course of action is to squeeze every last dime from the operation while such coins are still available. That includes jacking up subscription prices on a regular basis, even if doing so hurts overall circulation, as a way of getting maximum profit out of longtime subscribers (the paper's core audience) for as long as possible before eliminating print entirely.
There's no need for a long-term strategy if the folks at Alden think print is already in a death spiral, our sources argue — especially given that the Post
has been on sale since September 2014
without a buyer pulling the trigger.
In the meantime, the remaining newsroom staffers will be split into three teams: the "now" team, which will specialize in online breaking news, the enterprise team and the production team.
Those who stick around will face the enormous task of maintaining the quality of the Post
with the smallest staff in decades by a very wide margin. Meanwhile, the profits are still rolling in — for now, anyway.