Scripps Put Rocky Mountain News, 50 Percent of JOA, Up For Sale

 

DENVER, CO (December 4, 2008) – The CEO of the E.W. Scripps Co. stood in the newsroom in Denver this morning and told employees that Colorado's oldest continuously operated business, founded in 1859, is now up for sale.

Rich Boehne said the newspaper has lost $11 million in the last nine months, and that Scripps' 50 percent share of the joint operating agreement with The Denver Post was no longer an amount sufficient to sustain business.

Some estimates say the Rocky could lose as much as $15 million by the end of the year.

Scripps has owned the Rocky since 1926. Since 2000 the newspaper has won four Pulitzer Prizes. In 2001 the Rocky entered into a JOA with The Denver Post after a costly newspaper war.

"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," Boehne told the newsroom.

In an eMail to Scripps colleagues this morning, Boehne wrote, "The decision to seek a buyer for the Rocky would have been unthinkable until very recently – but a number of specific conditions led to this decision. Denver is the only major metro market in our newspaper group, and it's also the market with out only remaining joint operating agreement with another newspaper."

He said Scripps will entertain purchase offers until mid-January 2009, when the company will consider other options if there's no buyer.

The Agency is deep in its own debt, approximately $130 million due to a recently finished project to upgrade the production facility with technology and new presses.

Last month Scripps cut 400 jobs nationally across the newspaper chain and suspended its dividend, citing the continued decline of advertising revenue and a world money market turned sour. The National Newspaper Association of America verified the advertising market for newspapers recently: third quarter 2008 American advertising revenues were down another 18 percent. It's the worst advertising market in generations, and the Q3 numbers were the worst drop in 40 years.

The Rocky says it's circulation of 210,000 is about the same as The Denver Post's circulation, but with Saturday sales that reach 457,000.

This isn't the first time Scripps has wanted to get out of a JOA in a major metropolitan market.

The now-defunct Pittsburgh Press, a Pulitzer Prize award-winning Scripps paper that was once Pennsylvania's second-largest newspaper, was sold to Block Communications, publishers of the Pittsburgh Post-Gazette, in 1992. That ended the JOA between the two newspapers, and Block shut down the Press and began publishing the Post-Gazette seven days a weekly.

Several other large newspapers are currently up for sale. The San Diego Union-Tribune owned by Copley Press and the Austin American-Statesman and several other Texas community papers owned by Cox Newspapers are on the block, but last week Landmark Communications pulled The Virginian-Pilot off the market after an unidentified buyer was unable to secure financing due to Wall Street's credit crunch.

 

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