DENVER JOA: WE’RE LOSING MONEY

By: Mark Fitzgerald

Opponents Get Hearing Wednesday


The joint operating agreement (JOA) between The Denver
Post and the Rocky Mountain News is not an instant
money maker, the Denver Newspaper Agency (DNA) revealed in
documents filed in U.S. District Court in Denver Monday.

“Since Jan. 22, 2001 (the start of the JOA), the agency has
operated at a significant loss,” said DNA, which manages business
and production operations for the two dailies. The exact amount
of the loss is not included in the document, which mentions such
expenses as $6.6 million in consulting fees and other costs to
start up the JOA. DNA also said it spent $3.2 million on a
broadcast ad campaign prior to last week’s introduction of the
Weekend Rocky Mountain News on Saturdays and the
Post Sunday edition.

The filing came in response to a lawsuit seeking to overturn the
JOA that was filed by Jake Jabs, the CEO of American Furniture
Warehouse, a local furniture retailer; a group called “Coloradans
Against Newspaper Monopolies;” and freelance journalist Ryan
Ross. The plaintiffs are seeking a temporary restraining order to
stop ad rate increases that were implemented April 1. A hearing
on the restraining order is scheduled for Wednesday morning.

In their lawsuit, Jabs and the others accuse the two papers of
“conspiring to secure unlawful approval of the joint operating
arrangement from the government.” Both dailies “sought to, and
did, place themselves in a position where they could charge
exorbitant, monopolistic prices for advertising.” According to
published reports in Denver some advertisers say they are facing
increases in ad rates of 400% or more. Jabs told E&P the
JOA has offered him a four-year contract that would double his
present rate immediately and includes increases of 25% annually
for the next three years.

In a separate document also filed Monday, U.S. Attorney General
John Ashcroft goes on record in favor of the Denver JOA, which
his filing says “represents a precious opportunity to preserve
two newspapers in Denver.” The public interest “strongly favors
allowing the two newspapers to go ahead with implementation of
the JOA,” the Justice Department wrote. The Denver JOA was
approved by former U.S. Attorney General Janet Reno about three
weeks before the end of the Clinton Administration.



Mark Fitzgerald (mfitzgerald@editorandpublisher.com) is editor at large for E&P.



Copyright 2001, Editor & Publisher.

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