'Denver Post': JOA Going Away -- Whether 'Rocky' Sold or Not

By: Mark Fitzgerald No matter what happens to the Rocky Mountain News -- if it is sold, or, more likely, folded -- the joint operating agreement (JOA) in Denver is near its end, The Denver Post Corp. said late Wednesday.

The assertion came in a statement reacting to a Wednesday Rocky Mountain News story that suggested the Post had violated the JOA between the two dailies by borrowing from the Denver Newspaper Agency (DNA), the entity that runs all business, production and distribution operations for both papers, to make payroll for the Post newsroom.

The story by David Milstead was based on a letter making that allegation that was said to have been sent to two top executives of MediaNews Group, publisher of the Post, from the CEO and a vice president of E.W. Scripps, parent of the Rocky and partners in the JOA with MediaNews.

While declaring the "the story is full of so many inaccuracies and we cannot address all of them here," the Post Corp. statement also bluntly said the JOA was through once Scripps decides whether to sell or close the Rocky. Scripps put the paper up for sale late last month, and closed bidding on it Jan. 16. Scripps has not said whether there were any bidders.

"If the Rocky Mountain News ceases publication, it will be in violation of the Joint Operating Agreement, and the agreement will end," the statement said.

"If the Rocky Mountain News is sold, The Denver Post intends to exercise its options to buy all of Denver Newspaper Agency, and Denver Newspaper Agency and The Denver Post will be consolidated," the statement continued. "In either case, The Denver Post and the Denver Newspaper Agency will become one organization and will publish only The Denver Post. At that time, the intercompany balances between The Denver Post and the Denver Newspaper Agency will offset, and the combined company will be recapitalized with a plan to successfully move The Denver Post into the future."

Neither Scripps nor MediaNews has confirmed the authenticity of the letter, which Milstead wrote had been verified by other unnamed sources. The letter says the Denver Post had borrowed $13 million from the DNA to make its newsroom payroll, and asserted that was a violation of the JOA. It also asserted banks will no longer lend to the DNA.

The Denver Post Corp. statement says there is nothing improper about getting money from the DNA.

"On any given day, there are receivables and payables between Denver Newspaper Agency and its two partners. That will continue until the Joint Operating Agreement ends, which appears to be eminent," the statement said.

The statement also condemned what it called "endless rumors, innuendo and irresponsible reporting by the Rocky Mountain News."

"The story irresponsibly suggests that The Denver Post Corporation is incapable of funding its payroll," it said. "That is simply not true, and EW Scripps executives have been told the facts on numerous occasions. In short, there is no reason to change the status quo during the Scripps sale process and until such time The Denver Post and the Denver Newspaper Agency can be combined."

The complete statement is posted on E&P's business-oriented Fitz & Jen blog .