Scripps to seek buyer for Rocky Mountain News
Thu, December 04, 2008 by Tim King
The E. W. Scripps Company has decided to offer for sale its Denver-based daily newspaper, The Rocky Mountain News, as well as the newspaper's 50-percent interest in the Denver Newspaper Agency, which publishes the Rocky Mountain News and The Denver Post under a joint operating agreement (JOA).
Scripps bought the Rocky Mountain News, which is Colorado's first newspaper and the state's oldest continuously operated business, in 1926. After a decades-long circulation war, the newspaper in 2001 entered into the JOA with The Denver Post, which is owned by MediaNews Group.
The Denver Newspaper Agency manages the business and production operations of the Rocky Mountain News and The Denver Post. Through subsidiaries, Scripps and MediaNews Group each have a 50-percent stake in DNA but maintain separate and independent editorial operations.
"The decision to seek a buyer for The Rocky would have been unthinkable until very recently," said Rich Boehne, president and chief executive officer of Scripps, "but the operating conditions have become increasingly difficult in Denver, as is the case in all major metropolitan newspaper markets. Our 50 percent share 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 Scripps paper's share of the operating income (accounted for as "equity earnings") from the Denver Newspaper Agency fell more than 50 percent to $5 million in the first nine months of 2008 (excluding the one-time gain of $4.4 million from the sale of property). Rocky Mountain News editorial expenses in the same period approached $16 million.
In addition to the challenge of funding the two daily newspapers, the Denver Newspaper Agency also has approximately $130 million in long-term debt resulting from a recently completed consolidation of production facilities.
Scripps is working with New York-based Broadwater & Associates in the search for a buyer. The company intends to entertain offers through mid-January 2009. If no acceptable offers emerge in the course of that period, the company will examine its other options for the future of the Rocky Mountain News and its interest in the Denver Newspaper Agency.
"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," said Boehne. "The loyal readers and advertisers of Denver deserve the very best and we'll work hard to find a solution that benefits this great city."
Scripps will continue to support The Rocky financially while a buyer is being sought. No changes are anticipated in the daily paper or its digital service, rockymountainnews.com.
Prairie Mountain Publishing, another partnership between Scripps and MediaNews Group entities involving newspapers elsewhere in Colorado, and YourHub.com, a print and online initiative of the Denver Newspaper Agency providing hyperlocal news content for communities in Colorado and elsewhere, are unaffected by today's announcement.
About ScrippsThe E.W. Scripps Company is a diverse, 130-year-old media enterprise with interests in television stations, newspapers, local news and information web sites, and licensing and syndication. The company's portfolio of locally focused media properties includes: 10 TV stations (six ABC affiliates, three NBC affiliates and one independent); daily and community newspapers in 15 markets and the Washington, D.C.-based Scripps Media Center, home of the Scripps Howard News Service; and United Media, the licensor and syndicator of Peanuts, Dilbert and approximately 150 other features and comics. For a full listing of Scripps media companies and their associated Web sites, visit http://www.scripps.com/.