Of all the people who've written about the newspaper industry for the Denver dailies, Rocky Mountain News business writer and columnist David Milstead (pictured) has always been the toughest and most clear-eyed. Instead of giving his pieces a quasi-promotional flavor in deference to the people who sign his checks, he reports and writes no differently than he would about any other venture. That means challenging execs at the Denver Newspaper Agency, the entity charged with overseeing business matters for the Rocky and the Denver Post since the approval of a joint-operating agreement linking them, and not simply accepting their rosy assessments of a future that looks mighty grim to almost everyone else.
Still, even longtime Milstead appreciators will be caught off-guard by the bluntness of his July 1 offering, "Media Meltdown Tests Two-Newspaper Town." The piece's tone is set by its opening sentence: "It's been a wonderful run, Denver, but it's time to admit that we can no longer be a two-newspaper town."
After making this claim, Milstead does his best to back it up despite a lack of facts and figures at his disposal; he suggests that E.W. Scripps and MediaNews Group, the owners of the Rocky and the Post, respectively, are attempting to obscure the losses they're suffering on their Denver properties by reducing the amount of financial information they make public. Even without the complete data, though, he sees no reason to believe that the downturn currently afflicting print newspapering will reverse itself anytime soon, leading him to conclude that "the best way to make Denver a profitable market for the two companies is to close one of the newspapers."
Milstead subsequently argues that the Rocky is the strongest print product in the area and zings the Post for using giveaway papers to make the circulation race seem tighter than it is. But he concedes that the Post is the more powerful online brand due in part to the presence of the word "Denver" in its name -- an advantage the Rocky tried to blunt a few years back by changing its moniker to Denver Rocky Mountain News for a time.
Finally, Milstead notes that the Justice Department would have to sign off on any changes to the JOA -- and if that happens, "the end result would be a dramatically different media diet for Denver news consumers. We have been blessed with two newspapers when most cities this size have just one. But as the newspaper industry continues its decline, a two-newspaper town is a luxury that the owners of the papers simply can't afford."
Too pessimistic? Nope. Milstead's reasoning couldn't be more solid, and the first-day performance of E.W. Scripps stock following the deletion of new-media items from its portfolio only bolsters his contentions. At the time of a July 1 More Messages blog on the topic, Scripps shares were going for just $2.89, and while they ended the day five cents higher than that, a Reuters report points out that the overall price tumbled ten percent. In contrast, Scripps Networks Interactive, a new entity featuring The Food Network and Shopzilla, gained 45 cents, ending its official trading debut at $38.80.
Give the Rocky credit for publishing Milstead's effort. It was probably a painful call to make. But newspapers are supposed to print the truth, and "Media Meltdown" certainly qualifies. -- Michael Roberts