Rocky Mountain News for sale
E.W. Scripps Co. said Denver financial conditions make newspaper not viable
Denver — The E.W. Scripps Co. today announced that it is putting the Rocky Mountain News up for sale.
Cincinnati-based Scripps has owned the Rocky since 1926. The paper, founded in 1859, is Colorado’s oldest, as well as the state’s oldest continuously operated business. Since 2000, the Rocky has won four Pulitzer Prizes for journalistic excellence.
In 2001, after one of America’s great newspaper wars, Scripps called a truce and entered into a joint operating agreement with MediaNews Group, owner of The Denver Post.
Under the JOA, the newsrooms remained independent and competitive, reporting directly to their respective owners. A third company, the Denver Newspaper Agency, handles business matters such as printing, advertising and delivery for the two papers. The agency is owned 50-50 by Scripps and MediaNews and its profits are shared equally. Scripps is also selling its interest in the agency.
Scripps said that financial conditions had worsened in Denver to the point where it was not receiving enough money to cover its editorial costs. The company, in a news release, said it had lost about $11 million in Denver through the first nine months of this year.
“The decision to seek a buyer for the Rocky would have been unthinkable until very recently,” Rich Boehne, president and chief executive officer of Scripps, said in the news release. “But the operating conditions have become increasingly difficult in Denver, as is the case in all major metropolitan newspaper markets. Our 50 percent of the cash flow generated by the Denver Newspaper Agency is no longer enough to support the Rocky, leaving us with no choice but to seek an exit.”
The move comes as newspapers across the country are reeling from the worst advertising market in generations. Scripps last month told Wall Street that it had eliminated 400 jobs across its newspaper division and suspended its dividend in the face of advertising weakness.
Nationally, third-quarter newspaper advertising revenues plummeted 18 percent, according to the Newspaper Association of America. It was the worst drop in the nearly four decades the trade group has been tracking quarterly performance and the sixth-straight quarter of year-over-year declines.
The sale of the Rocky would mark the end of more than 100 years in Denver for Scripps. The company’s founder, E.W. Scripps, started The Denver Express in 1906. The Express was folded in the late 1920s when Scripps focused all its efforts on building the success of one title in the morning, the Rocky Mountain News.
The Rocky has faced many challenges in its history. The story goes that Editor Jack Foster was sent to Denver to close the paper at a time of newsprint rationing during World War II. He converted it into a tabloid, or magazine style, newspaper in 1942 and the paper doubled its circulation over the next five years. During the final years of the newspaper war it annually boasted it sold more than 5 million classified ads and had a daily circulation of more than 400,000.
Today its daily circulation is about 210,000, the same as the Post’s, and its Saturday circulation is 457,000. The paper is delivered to subscribers of both the Rocky and the Post on Saturday. On Sunday, under the JOA, subscribers to both papers received the Post.
Scripps said the challenge in Denver went beyond funding the two newsrooms. The agency also has approximately $130 million in long-term debt stemming from a recently completed consolidation of its production facilities under one roof with significantly upgraded equipment, such as new printing presses.
Scripps said it will consider offers for the Rocky and its interest in the agency through mid-January of next year. If no acceptable offers arise, the company said it will examine its other options.
“Some will be tempted to immediately write the obituary of the Rocky, but we’re hoping this step will open the way for a creative solution to the financial challenges faced by Denver’s great newspapers,” Boehne said in the news release. “The loyal readers and advertisers of Denver deserve the best and we’ll work hard to find a solution that benefits this great city.”
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