The Denver Post announced today that they will not honor the Joint Operating Agreement governing their partnership with the Rocky Mountain News in the event of the latter’s sale. As the Rocky reports:
The owners of The Denver Post said Wednesday that if the Rocky is sold, they intend to take control of the Denver Newspaper Agency and publish only the Post.
The unsigned statement from the Denver Post Corp. was a response to an article in Wednesday’s Rocky that said executives at E.W. Scripps, the parent of the Rocky, had accused the Post of violating their joint operating agreement by using agency loans to pay for the Post’s payroll.
The Post owed the agency $13 million by the end of November, Scripps executives claimed in a letter obtained by the Rocky.
The Post’s statement Wednesday called the article “irresponsible,” said there is no violation of the JOA, and said any amounts it owes to the agency will be canceled once it takes over…
The Post statement suggests that anyone who might buy the Rocky will be left without printing presses or an advertising or circulation staff, all of which are currently provided to the Post and Rocky by the agency.
Get it? A newspaper with no printing press. Or delivery boys. Or advertising. If they can really carry this off, and there are significant questions as to whether or not they legally can…well, obviously. There’s very little left to buy at the Rocky Mountain News. Heck, even if they can’t actually get away with this under the terms of the JOA, just talking about doing it depresses the Rocky’s value. For Post publisher Dean Singleton, though, there’s nothing but upside.
Now, the Post made their announcement today after the Rocky published a story alleging that the JOA was being violated by this ‘backdoor’ funding for the Post by the Denver Newspaper Agency, which handles production for both papers. And that’s where the story gets really dirty, as the Rocky continues:
The Post did not deny it owed the agency money for payroll…and confirmed that the agency has been paying the Post newsroom costs. The agency had been subtracting the costs from the Post’s monthly cash distributions from the agency.
Scripps said this week the agency has not made any distributions to the partners since June, and the Rocky has incurred $10.6 million in payroll costs since that time. [Pols emphasis] In the letter, the Scripps executives say Post management unilaterally had the agency borrow from its banks to cover the Post costs, and now the agency’s lenders won’t extend any more credit.
So, the Post is able to arrange financing for their day-to-day operations though a sweetheart deal with the production company it intends to take over after the Rocky dies, apparently long after they should have if the DNA maxed out their credit lines giving it to them, while the Rocky receives nothing from that same supposedly independent entity and is left to die–without even a printing press?
Somebody want to explain how this does not have a 100% preordained outcome?
And the other lingering question is this: Just how solid is the Denver Post if they are “borrowing” huge sums of money in order to make their own payroll?
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writing front-page editorials for our consumption in the near future. At least he’s our putz!
You too can roll with Dean and his crew on N51MN.
According to FAA sources the Post boys are currently in the NY/NJ area; if I had to guess they’re shopping for some new Wall Street financing.
1164 miles down with 483 miles and an ETA of 16:55. The current approach is 35R.
Your link is to yourself, ColoPols.
http://www.rockymountainnews.c…
Several commenters at the Rocky think the Rocky might survive the Post?
Possible?
and more agility with capital, but Singleton holds some serious cards in this particular arrangement.
survives in this climate! Keep all the traffic for yourself!
Scripps says: “we changed our mind and will set an October sale of the Rocky deadline”.
Dinky Singleton will be screwed as he will definitely declare bankruptcy before then.
This is a “the first guy who blinks loses” situation.
The leaders of Scripps are like those of just about every other publicly held corporation in America. Their concern is keeping their jobs until the storm is over and they can go back to fatter bonuses and salaries.
Neither they, nor their shareholders, I’d wager, give a hoot about whether Denver is a one- or two-newspaper town. “Winning” for them is getting out of Denver before they lose any more money than they have to.
Now, a privately funded entity with a lot of cash to burn might have another perspective on this…
Theoretically, had I won the $300+ million Powerball a while back I’d be in the process of making a pre-emptively high offer for the Rocky and its share of the JOA, before sitting back and telling old Dean, “Well son, looks like you’ve gotten yourself in a bit of a pickle. I can lose money at this rate for about five more years before I decide to bail. My unions don’t hate me because I haven’t demonized them; they’re willing to negotiate a big cut in labor costs for that period because my goal is to add jobs and expand the business once I drive the weaker player out. What’s your plan for the next five years?”
…I’d be using the Wilford Brimley voice from “Absence of Malice,” which would make it that much more powerful.
“delivery boys” …..that is oh so old school. The average newspaper delivery person these days is more likely to be a mom who gets up in the middle of the night to deliver papers at 4 am so she can be with her kids later. It’s not the same world it once was……
in the predawn would be considered child abuse now. Our paper “boy” is some older dude in a pick-up.
I never had a route, but my friend Tom Drury did and I often tagged along and helped. It was the afternoon Long Island paper, whatever it was.
Besides the responsibility of delivery, paper boys had to find new subscribers, take care of complaints, and balance the books.
Now, with adult delivery, they can spend more time playing Nintendo…….
other than mowing the lawn at the 7/11 for a Slurpy and $2…
I hated delivering papers, twice a day, in Louisville, KY.
But ‘delivery boys’ is definitely old school. My route is rural anyways, and the current carrier misses me about 1 or 2 times a week. Plus its the Sentinel anyways, which makes mornings like akin to fingers on a chalkboard.
For a sample, check out Rick Wagner’s column today…
This guy claims to be a lawyer. Pity his clients.
It just encourages him.
On a lighter note, my first job was not delivering papers, but delivering Life Magazine when it was a weekly. I think I still have my Life carrier bag out in the garage somewhere.
hell, I even blogged it here
that Wagner and his lunatic fringe of are doing more to destroy the Republican brand than any opposition ever have. I know all the recurring Republican losses might be shrinking your head, little Ricky. But if you pinch your tinfoil hat at the crown, you should be able to keep the fit and continue helping destroy the R party in Colorado.
Especially since the Sentinel allows him to split his time between reporting and opinion.
That tells you how “fair and balanced” his reporting tends to be.
As far as his opinion goes, it’s cartoonish.
He wants to be Michelle Malkin when he grows up.
I got 50 cents. That was after a raise. It was also a long, long time ago!
And nothing for mowing the family lawn, big and St. Augustine grass. Of course, after my brother and I left for college, Dad got a riding mower. Funny how Sis wasn’t in line to mow the lawn.
of course it was already the 70s by then (nearly the 80s, actually)
(and the job included bill collection from customers back then as well) but that business model died when afternoon papers did.
Dean’s a nasty, ruthless, and cunning operator-but in his current state of health, he has to rely upon his lieutenants to conceive & execute policy-and they’ve obviously screwed up (althouigh the letter was dated in early December, so it was probably just a ploy). It may well be within Scripps’ power to take out the Post and have the Denver market to itself-but that might be defeat disguised as victory. Scripps would like to exit the JOA w/o liability, and get some cash-while Dean wants them to pay him off for the privilege. The decision rests w. the banks-who might just get together, choose the winner, and let the other die
n/t
We’ve come a long way.
which is part of Lexis/Nexis and now makes most of its money as a leading provider of online access to statutes and caselaw, and as a manager of court e-filing systems.
For those who don’t watch the whole thing, the story dates from 1981.
Rocky Candlelight vigil tonight?
David Milstead of the Rocky last week (1/21/09) wrote this in an analysis article about the current business state of both the Rocky and the Post…..
He ends his article with this…..
Admittedly Milstead does work for the Rocky, but probably not for long.
The Rocky Denver Mountain Post Newser.
Denver Rocky Mountain Post is better.
Perhaps a lottery where the five words are chosen at random sequentially. No telling what you might come up with.
I’m willing to bet a paper with a swear in the name would sell.
Rocky Horse Ass Giant Candy
That’s a good read.
Anyway, I was picking on you because you seem… somewhere between salty and cantankerous today.
I’m sure David Sirota would be happy to write a column. Seeing as he loves the giant horse ass so much.
Lordy, I’m failing…..
or have compromising photos of the publisher.
Its hard to imagine why else he’s there.