SALZMAN: Can you blame Scripps? Yes
By Jason Salzman, Rocky Mountain News (Contact)
Published December 20, 2008 at 12:05 a.m.
Can we blame E.W. Scripps, which is reportedly losing more than $1 million per month on the Rocky Mountain News, for putting the newspaper up for sale, a move that will likely lead to the Rocky's closure? Especially since Scripps apparently sees little chance the Rocky will be making money any time soon?
Yes, we can.
But for some strange reason, we have yet to see criticism in the dailies that Scripps owes it to our community to hang on longer.
It's as if Scripps' scary-sounding losses, and the much-covered downward spiral of big-city newspapers, negate legitimate questions about the ethics of the sale.
Even Westword - whose in-depth coverage of the Rocky's plight included a heartless list of five Rocky journalists (out of more than 200) who should be hired by The Denver Post to lure soon-to-be-former Rocky readers - hasn't aired the view that Scripps, after 102 years in Denver, has a civic obligation to suck up its losses and stick it out longer.
I mean, here's a big company that I think can afford to lose money in Denver, while it sorts out how - and whether - it can earn more online or through creative changes like those unveiled this week in Detroit, where newspapers will be delivered three days a week, leaving subscribers to find news on the papers' Web sites the rest of the week.
In a November news release that announced, among other things, Scripps' losses in Denver, company president Rich Boehne said Scripps is a "healthy company built upon a collection of solid media businesses in attractive local markets."
You can safely assume that Scripps, a $2 billion business until its split earlier this year, was still healthy on Dec. 4, when Boehne announced the Rocky's sale and said that dumping the Rocky was "absolutely unthinkable just a short time ago."
Even if Scripps has been worried about the newspaper for a few years, as reported elsewhere, Scripps should take more time before it sells or closes a 149-year-old institution like the Rocky, particularly after the company has apparently made big money here.
It's impossible to pinpoint just how much Scripps, which went public in 1988, has earned in Denver. But over 102 years in an overall profitable industry, the earnings were significant, according to newspaper analyst John Morton of Morton Research, even if you include losses along the way, like during the newspaper war here in the 1990s. He estimates Rocky profit margins in the "mid-teens or so" through the 1970s and 1980s.
In his blog April 29, the Rocky's David Milstead makes a rough estimate that the Rocky even made $25 million in profit from 2005 through 2007. So it doesn't look like the red ink has been flowing for very long at all.
More broadly, the company's profit from all its newspapers was $223 million in 2005, $196 million in 2006, and $147 million in 2007, according to annual reports. Profits were $270 million in 2002 with a 40 percent profit margin!
You notice a downward trend, but Scripps says all its newspapers, other than the Rocky, remain profitable.
"They're doing what most capitalists do - responding to current market conditions," says Morton. "The difference here being that most capitalists don't publish newspapers that a community or city and readers depend on." He says newspaper publishers have an "obligation to their communities" to hold on.
Exactly. Newspapers are too important to be abandoned like a soap factory.
Scripps, meanwhile, is almost certainly healthier than Post owner Dean Singleton's private company, Media- News Group.
Bad news continues to trickle out from MediaNews, including last week's announcement by Moody's Investment Services that MediaNews is more likely to default on its loans. Then there was Singleton's subsequent announcement that he needs to make $20 million in cuts and his request to the Denver Newspaper Guild to renegotiate its contract.
Singleton has said he's committed to Denver because he expects his business to turn around. Morton also thinks business for big city dailies will improve eventually, though he thinks future profits will be lower.
I'm not saying Scripps, which features an image of the Rocky's Pulitzer Prize- winning "Final Salute" edition on the "newspapers" segment of its Web site, is a dishonorable company. Here I am being allowed to criticize Scripps in its own newspaper, after all.
Plus, no final decision has been made to close the Rocky.
But Denver journalists should look for all legitimate criticism of Scripps' ominous announcement to sell it.
Jason Salzman, president of Effect Communications, is the author of Making the News: A Guide for Activists and Nonprofits. Reach him at salzmanj@RockyMountainNews.com.
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December 20, 2008
11:17 a.m.
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HopiMedicineMan writes:
Here’s a formula I think could work:
1. Move back to a standard (broad sheet format) for more advertising space. Is the tabloid format the only reason people take this paper? I don't think so. I take it to read Lynn Bartels, Jean Torkelson, Myung Oak Kim, Ed Sealover and formerly Charlie Brennan.
2. Increase the ratio of ads to news in favor of ads.
3. Remove classified to web only. Compete with Craigslist.
4. Counter the Post’s liberalism. This step could also be called, “know your reader.”
5. Sell the concept of paper over Internet. (Persuasion is an effective thing WHEN ATTEMPTED.)
6. Your product is news, i.e., disclosing what’s going on, not disclosing the prejudices of Mike Littwin, et.al. I think this is a big failing. You’ve insulted your main subscribers.
7. Sell or lease the building. Operate out of a warehouse or an industrial condo. Reporters don’t need an office when they can email their work.
8. Look for local partners. Always be on the lookout. Every business does this. We finance each other's dreams.
9. Stop making enemies among your sources and the business community. And move business developments, such as oil and mineral finds to the front page, as in past decades.
10. Cover suburban governments and politics. This ever smaller circle of coverage is dumb. Your readership moves further away from the city every year. Why not follow them rather than abandon them to weeklies.
11. Print shorter stories. Get to the point sooner. Let the Post do creative writing. Write tight.
December 20, 2008
11:36 a.m.
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Achilles writes:
"I mean, here's a big company that I think can afford to lose money in Denver,..." - Salzman
Why should it have to lose money in Denver regardless of how big the company is?
"Exactly. Newspapers are too important to be abandoned like a soap factory. " - Salzman
Get over yourself. Newspapers are not that important, especially bad ones like RMN.
Here are the profit figures for Scripps that you acknowledged:
2002: $270 million
2005: $223 million
2006: $196 million
2007 $147 million
That is some downward trend! Especially considering that the economy in general was growing since 2003 until late 2007. So, while the rest of the business world had growing profits, Scripps profits were shrinking. And I'm sure 2008 profits will be less than 2007's.
Scripps needs to sell while there is a chance for a buyer or cut its loses sooner rather than later.
The RMN is not owed anything. RMN readers have been telling you folks how crappy your paper is for the past two years that I have been here. The RMN refuses to listen. So, the RMN will go down and the Denver area will survive just fine.
You delude yourself of your own importance.
December 20, 2008
1:45 p.m.
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RoyalPayne writes:
A shame one of the Wests finest newpapers did this to itself. Becoming so baised and so liberal turned off alot of readers. We wanted BOTH side of the news, not just the liberal side. Your paper became so far left is was ready to tip over ! Yours is not the only one to go, the New York Slimes is also on the way out along with many others. Goodbye old friend, we spent alot of mornings together until you became so radical we had to part company !
December 20, 2008
2:24 p.m.
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DMISSEY writes:
Scripps is Not to Blame
I was fascinated by Jason Salzman’s article this morning regarding the Rocky Mountain News, and the implied responsibility of E.W. Scripps to maintain the paper in a depressed economy. The basis of his assumption is that if Scripps has made money in prior years with the Rocky, then there is an implied ‘clawback’ provision that requires Scripps to take profits from prior years and invest in the RMN, now, and in the future. The greatest problem with this theory, however, is that it would not be an investment at all; it would simply prolong the end, with a profit-depleting interlude for Scripps.
I have considerable sympathy for Salzman and his fellow journalists; they reflect the attitudes of previous generations who opposed automobiles and airplanes, who couldn’t imagine an economy that has evolved and is moving forward without them. The Rocky’s journalists are joining automobile dealers and real estate brokers, travel agents and autoworkers, in the move toward a new economy whether they like and understand it or not. Rather than characterizing the need for support for a subsidy by Scripps of the existing Rocky Mountain News, in the current fashion of looking backwards, Salzman should encourage some creative and aggressive forward thinking that we have strongly criticized the auto industry for lacking. The readers have voted with their wallets, and they are not buying newspapers; Denver and E.W. Scripps would be better served by investment in developing the newest forms of journalism. Denver could pioneer the investment, the journalism and the technologies.
Journalists continue to have a tremendous responsibility to their readers. The need for serious reporting has never be greater, both in wire service capabilities and in the various types of investigative journalism for which American journalists have been the gold standard. Journalists are trying to fly in the blogosphere, their dedicated fact-finding drowned in a hurricane of partisan blogging, however, and they need to be able to creatively respond in their new medium, and quit lamenting the loss of the old one.
What will succeed the printed papers? We need to find out. The bricks and mortar newspaper may give way to peripatetic writers on the trail of facts and ideas, driven to go to the news instead of waiting for it to come to them. Or bring the bloggers into the newspaper office. Give the best a desk and computer, turn them on, and turn them loose. A newsroom isn’t a tea party; journalism, newspapers and the reading public have always benefited the most when the contentious noise from opposing writers has been at a fever pitch. The well-positioned building housing the archaic Denver Post and leaking ship called the Rocky Mountain News could give way to an amazing exercise in excellence in content and a revolution in delivery of that content, if creative minds prevail.
December 21, 2008
8:39 a.m.
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Spencer writes:
Most of the Conservatives that I know do not read the paper. They only watch Fox News. (seriously)
December 21, 2008
10:13 a.m.
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Achilles writes:
I have not read "the paper" in a long time. I rarely watch Fox News. But, if I am going to watch television for "the news", I'll watch Fox.
December 21, 2008
8:43 p.m.
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spot writes:
Maybe the dailies should start charging for their content. And stick to local content online. If I want to read national and world news, I'm not going to a local site unless there's something special to attract me. But maybe if the public realized what the papers do on a local level they'd be willing to pay up.
As for "liberal bias," I think most anybody with half a brain can figure out Mike Littwin's stand. He is, after all, a columnist who's paid to express his opinion. On a wider level, even the "liberal media" generally stands up for something pretty near the status quo. Get real, wingnuts.
December 22, 2008
8:30 a.m.
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edwardallen writes:
Is Scripps responsible for the diminished journalism of the Rocky Mountain News? I do not think so. Corporate policy had nothing to do with editorial decisions made in Denver to produce a turgid, dull and boring paper. My fellow readers here complain of editorial bias. Boy I wish I could find even a hint of that in the RMN today, either from the right or the left. Bias takes intellectual conviction and heart. I find none of that in today's predictable and plodding paper. I remember the Ralph Looney days, when the RMN was an exciting newspaper to read. Today there are papers that don't contain a single exciting or interesting story. That is not Scripps' fault, it is an editorial decision made here in Denver. Who killed the RMN? The editors who run it.
December 23, 2008
6:09 a.m.
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GunnyBob writes:
Jason, during the campaigns you called into my show to express how gleeful you were that so many liberals "hate Bush." You did this as you rode around in a farcically pedantic and sophomoric truck hauling statues of Bush and McCain embracing. You were giddy with intolerance, venom and loathing.
That same embarrassing attitude comes across in your columns, as it does in Littwin's, Campos' and so on, as well as the paper's frequently laughable editorials. When hate becomes the life blood of a media outlet, like Air America that outlet will fail.
And you were a part of it. Your own bigotry, arrogance and hate has cost you your job and now you are blaming Scripps rather than yourself in any way.
The truth hurts, Jason, but pain builds character.
December 23, 2008
8:18 a.m.
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jeffdragon writes:
Salzman, as most people who write columns about the Denver newspaper situation do, has a few of his facts wrong.
The RMN was not profitable in the years before the JOA. It was losing lots of money - primarily because of its decision to give their paper essentially away for free - penny-a-day sale, remember it?
That's why Scripps was forced into the JOA in the first place. That fact is not sufficiently explained by Salzman. Instead, he wrongly asserts that the RMN has been some kind of cash cow the last few years, when in reality it has also been losing money. It may have looked like it had "profit", but don't forget their results were combined with those of the Denver Post, which collected more revenue primarily because of its Sunday status and higher ad rates.
In fact, the RMN has been a black sheep in the Scripps family of papers for about 10 years now, and they understandably want out finally.
December 23, 2008
8:30 a.m.
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DMISSEY writes:
It's too bad that Jason Salzman can't get in the game, along with the rest of the Rocky Mountain News staff. Denver and the RMN would benefit from halting their fond look back at 150 years of the RM News, and instead, looking ahead to a brilliant, contentious and interesting future in Denver journalism. I pulled the entire roster of News staff that Salzman was so miffed about when Westword said keep just 5. It turns out that these writers are, in large part, just advertising supplements added to a few pages of wire service feeds. They couldn't aggressively report on anything, because they would be biting the hand that feeds them. And many of them write an article here, an article there – it is at their leisure, not under pressure of daily events cascading around them. If you do a spreadsheet on the writers and their output, it’s an embarrassment.
The next step for the RMN is to make that nice new building at the corner of Colfax and Broadway the Hyde Park Speaker’s Corner of the United States. Give Gunny Bob and Mike Littwin, Mike Rosen and Jason Salzman podiums on the ground floor, and live feeds to the web. Sell the advertising on the streaming feeds, invite the audience to participate live, and take their turns on the podium. If you’ve got something to say, then say it; just don’t expect to get a free ride. Make your audience laugh, cry, salute or sing.
Stop this nonsense of save the paper because you ‘deserve it’. We’ve voted with our wallets. And I don’t agree with Rosen or Gunny Bob, but I listen to them. Go figure.
December 24, 2008
9:42 a.m.
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anderson writes:
The underlying issue raised by Jason Salzman is whether Scripps has any duty to the public. 50 years ago, no one, save for maybe Milton Friedman or Ayn Rand, would have argued otherwise. Today, we see the effects of a lassez-faire point of view. The bottom line is the bottom line, and let no other consideration interfere.
jeffdragon, Salzman asserts the RMN has been profitable, and, like any good journalist, gives references. You say he's wrong, but you cite nothing.
December 24, 2008
9:46 a.m.
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anderson writes:
DMISSEY: "And I don’t agree with Rosen or Gunny Bob, but I listen to them."
Why? Do you listen to infomercials as well? Same one-sided point of view on any given matter.
December 24, 2008
12:04 p.m.
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Achilles writes:
"50 years ago, no one, save for maybe Milton Friedman or Ayn Rand, would have argued otherwise. " - anderson
Nonsense. Pure wishful thinking. The RMN is no national or state treasure that needs to be preserved at a loss of income.
This current Salzman column is a lame attempt to rally his socialist supporters against capitalism. Of course, any system that would let a great newspaper like the RMN perish is surely a bad economic system, right?
What foolishness!
December 24, 2008
12:58 p.m.
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anderson writes:
You didn't respond to the question, John. Does Scripps have a duty? I'm guessing you, like Friedman, would say no. But you didn't say. Instead, you fire off a volley in the war between capitalism and socialism, designed to divert our attention from the newspaper sinking in the earth in front of us, and about as useful as participating in the war between liberals and conservatives. The world is not a binary except maybe in the minds of fundamentalists, ideologues, and those who listen to talk radio. Btw, I appealed to conservatism ("50 years ago"), but for naught I suppose.
December 24, 2008
2:19 p.m.
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Achilles writes:
"Does Scripps have a duty?" - anderson
I thought my previous post sufficiently answered that question. But, now I have to ask, a duty to whom? a duty to what? A failed newspaper?
Salzman sees a "duty" on the part of Scripps because Salzman is a socialist who is about to lose his job. I'm not sure why you would agree with Salzman other than on pure ideological terms.
I used to subscribe to RMN. I canceled over a year ago. The paper was junk. I see no reason why anyone should feel it is their "duty" to lose money on a bad business.
The duty belongs to the staff of RMN to create a product worthy of Scripp's support. They failed. And this column is evidence of that failure.
Scripps does not owe RMN anything. And the fact that Salzman thinks RMN is owed something simply highlights the binary distinction between liberals and conservatives. Liberals believe they are entitled to things that are out of their control. This constant sense of entitlement is the reason why they always play the role of the victim. They create a model of entitlement in their minds and then inevitably claim that their "rights" are being trampled on when that entitlement vision does not match the real world.
Salzman is the perfect example of the entitlement model. Even though the RMN has been losing money, he feels, *feels*, that RMN is deserved some special treatment because...well, just because.
There is nothing magical about this newspaper or newspapers in general. At one point in time they held some measure of importance. Now, citizens have numerous options to get the "news". So,why is it anyone's duty to lose money on such a defective business as the RMN?
December 24, 2008
2:22 p.m.
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Achilles writes:
"Instead, you fire off a volley in the war between capitalism and socialism, designed to divert our attention from the newspaper sinking in the earth in front of us..." anderson
Sure, anderson. I suppose this statement by you was no volley at all in the war between capitalism and socialism:
"50 years ago, no one, save for maybe Milton Friedman or Ayn Rand, would have argued otherwise. Today, we see the effects of a lassez-faire point of view. The bottom line is the bottom line, and let no other consideration interfere." - anderson
December 27, 2008
1:57 p.m.
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Salzman writes:
Jeff Dragon is almost certainly right that the Rocky lost money during some number of years leading up to the JOA--maybe a decade at the most.
But Scripps has been in Denver for many more decades, earning double digit profits for much of the time, as Morton points out in my column. Scripps shouldn't run for the door yet. Give us a couple years of red ink, at least, before closing an institution that's so important to Denver.
As for Gunny Bob, Colorado Media Matters has done an excellent job of compiling his falsehoods. Gunny must get his news from blogs or someplace, because he's got a shallow understanding of the Rocky. Until he heard about my promotion nof the Bush-McCain hug mobile, Gunny actually thought I was a Rocky staffer. See my blog post about Gunny at www.bigmedia.org, if you want more details about this. But Gunny was good enough to have me on his show. I appreciated this effort at dialogue.
December 27, 2008
4:51 p.m.
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Achilles writes:
"Give us a couple years of red ink, at least, before closing an institution that's so important to Denver." - Salzman
Gimme, gimme, gimme. Why should they have to endure "a couple years of red ink"? To yourselves, you are an "institution". To Scripps, you are rightly viewed as a business. Business exists to make a profit, not to post red ink.
If the RMN wants pity, it should turn itself into a non-profit organization that accepts donations.
Salzman should at least have enough class to say please when he demands that Scripps lose money on the RMN's behalf. Instead, he chastises Scripps. Very classy.
Furthermore, Scripps has placed the RMN for sale. If Scripps is guilty of abandoning an "institution" then anyone who refuses to buy the RMN is also committing the same crime against an institution. If the RMN is such an institution as Salzman says, why hasn't anyone stepped forward to save it?
Salzman, if you want someone to lose money by owning the RMN, the least you could do is show some gratitude and appreciation instead of publicly lambasting the company that you want to be RMN's savior.
December 28, 2008
8:27 p.m.
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bobjohnson writes:
A couple of points.
Didn't the Rocky lose 91 million during the Eighties? Isn't that why they merged with the Post, giving the Post Sundays and the Rocky settling for Saturdays.
New York, with a population in the metro area six times that of Denver had three papers. Most cities in the U.S. with a population equal to or exceeding Denver's, have only paper.
You can't compete with Craig"s list, its free.
News on the web is now. News from a machine, a news stand, is one day old.
People who say the News is too liberal voted for McCain. Those who think its too conservative voted for Obama.
It is clearly economics. Why is that so hard to understand?
December 30, 2008
9:04 a.m.
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DMISSEY writes:
I rather thought that this article would evolve, at least a little. I'm an optimist, I guess, and disappointed to find out that we are not going to get much in the way of evolution here. I love the newspapers, bombast ,comics and Jake Jabs. All of it. But like trolley cars and buggy whips, they are going away. The replacement is interesting, but not nearly as palpably fun as the legends of the newspapers.
What is missing when you kick aside the nonstalgia, however, is even a hint of insight into what we can do next. Why isn't Mike Littwin debating Mike Rosen every Tuesday and Thursday at high noon at the DNA building? If Jason Salzman really believes what he says, put him on a podium opposite the Scripps management, and let him make his case in broad daylight, Athenian style. Let the news stream behind their respective platforms.
The confluence of the internat, social networking, blogs, and Starbucks is an open debate forum, held each day at high noon on the 16th Street Mall.
Before there were newspapers, people met in coffee shops and pubs and debated, constantly, incessantly, and passionately. This lightweight sniping we indulge in here is a boring exercise in polarity. There are metrics and measures we can throw at each other endlessly - but no one is going to take their lunch to the steps of the capitol to read this stuff. Live debate, with the passion of the players on full view, is the only salvation for the Rocky Mountain News.
December 31, 2008
1:07 a.m.
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Achilles writes:
"Live debate, with the passion of the players on full view, is the only salvation for the Rocky Mountain News." - DMISSEY
I couldn't agree more. The RMN is run by old tired men who lost track of what people want.
The online debate forum can mix with the hard-copy newspapers very easily.
The reason folks throw peanuts at their television sets while watching the news is that they have no way to interject and offer a counterpoint to whatever some ditzy pundit is saying. The same goes for a newspaper. How many times have we tossed the paper out of frustration from a lack of ability to respond to absurd statements by "journalists"?
The online forum offers readers the ability to engage and interact with journalists and columnists.
The problem is that anyone can post here. And this has taught me that there are more idiots in this country than I ever imagined.
Forum participation should be by invite only regardless of political persuasion. The only requirements are the ability to spell, the ability to write, and the ability to argue rationally.
Eliminate the idiots and we now have a forum where columnists, journalists, editors, and readers can discuss relevant issues. The debates should then be published in the morning paper for all to read.
I'd read a Campos column if he then participated in the online discussion and backed up his work. Maybe, under that format, Salzman would be forced to respond to reader comments instead of selectively picking out the easy ones to respond to.
January 5, 2009
3:30 p.m.
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sstnt writes:
The management at Scripps owe some portion of forbearance to the public. But first and foremost, they have a fiduciary responsibility to the shareholders, the owners of the company. Every dime put into a money-losing paper such as the RMN comes off of the stock price, or off of the dividends paid, all impacting people rich and middle-class who have invested in Scripps' success. That trumps any responsibility they have to the community. They have paid that through the decades by providing this service. They owe no more.
January 5, 2009
4:48 p.m.
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sara123 writes:
Journalists look at their profession as providing an invaluable service to democracy and that was true in the past. However, when these activist journalists operate in a herd mentality and are totally biased to one ideology and political party, they are no longer providing a service to democracy.
When journalism "progressed" from classical liberal standards of reporting a balance facts and being loyal to the constitution, to the activist purpose of "educating the public" in order to shape (manipulate) public opinion for the a political or social cause, they no longer are needed in a democracy. We have special interests that we can get propaganda from for free. That is why newspapers are going out of business. They have lost the respect and trust of the public for the profession.