Owner to say more on Rocky Mountain News fate in coming weeks
Scripps to say more on Rocky fate in coming weeks
By CATHERINE TSAI
AP Business Writer
DENVER, Colorado ” The E.W. Scripps Co. expects to say more about its efforts to sell the Rocky Mountain News by the end of March, President and CEO Rich Boehne said Thursday.
Scripps put Colorado’s oldest newspaper up for sale Dec. 4, along with its 50 percent stake in the agency that handles business operations for the News and its rival newspaper, The Denver Post, under a joint operating agreement. Bidding for the News closed in mid-January, but Scripps hasn’t said how many offers it received.
When Scripps announced the sale, it said it had lost about $11 million on the business through three quarters. Its 2008 earnings report released Thursday said the News lost $16 million over the year.
Boehne left open the possibility that the newspaper could be closed if no buyer is found.
In a conference call Thursday to discuss 2008 earnings, Boehne left no doubt that the Pulitzer Prize-winning News is spilling too much red ink, despite the joint operating agreement with The Post.
“Some of the very best journalism in the nation hasn’t been enough to rescue a franchise trapped in an unsustainable business model,” Boehne said.
“Because of the head-to-head newspaper war, the Rocky and The Denver Post subsidized the economic vitality of Colorado for decades with ridiculously low advertising and circulation rates,” he said. “The joint operating agreement provided a lifeline for the Rocky and The Post for many years, but the market spoke recently and loudly and clearly that this arrangement could not last, at least not economically.”
“We are proud of the Rocky’s journalistic accomplishments, but we simply cannot absorb unending and growing losses,” Boehne said.
Boehne said he couldn’t estimate what it might cost to close the News if no buyer is found.
“One of the reasons for that is, it’s not clear to us as we sit here today which way we might go and what our method of exit might be,” he said.
The newspaper industry has been dealing with rising newsprint costs and falling revenue from advertisers who are cutting back in the weakened economy and, in some cases, are fleeing to competition like the Web.
Television stations are also fighting advertising drops. At Scripps television stations, local and national advertising revenues in the last three months of 2008 dropped 27 percent compared to the fourth quarter of 2007.
Scripps said its total newspaper revenues for the fourth quarter fell 17 percent from the same time a year earlier. Advertising revenue was down 20 percent, and newspaper expenses were down 2.2 percent.
Scripps is cutting most salaries at newspapers and in corporate offices by 3 percent to 5 percent and suspending its matching 401(k) contributions. It has drastically cut bonuses and plans to freeze pension plans this year.
The Denver Post, owned by MediaNews Group Inc., laid off six newsroom managers Wednesday to cut costs. It is also seeking wage and benefit concessions from labor unions.
William Dean Singleton, chief executive officer of MediaNews and publisher of The Denver Post, is chairman of the board of The Associated Press.