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.
The Post'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.
Keep Westword Free... Since we started Westword, it has been defined as the free, independent voice of Denver, and we would like to keep it that way. Offering our readers free access to incisive coverage of local news, food and culture. Producing stories on everything from political scandals to the hottest new bands, with gutsy reporting, stylish writing, and staffers who've won everything from the Society of Professional Journalists' Sigma Delta Chi feature-writing award to the Casey Medal for Meritorious Journalism. But with local journalism's existence under siege and advertising revenue setbacks having a larger impact, it is important now more than ever for us to rally support behind funding our local journalism. You can help by participating in our "I Support" membership program, allowing us to keep covering Denver with no paywalls.