Rocky road may lead to new JOA in Denver

By: Joe Strupp 'News' and 'Post' ? combatants in the country's roughest, toughest newspaper war ? sue for peace

When a reporter approached William Dean Singleton during last week's Newspaper Association of America conference in New York asking about the future of the bitter newspaper war in Denver, the chairman and CEO of MediaNews Group, owner of The Denver Post, was mum about what lay ahead, saying only that "when it's all over, we'll be the ones left standing."
A day later, Singleton took the first step toward making that prediction come true by announcing plans for a joint operating agreement (JOA) with rival Denver Rocky Mountain News owner E.W. Scripps Co. that gives Singleton a $60-million one-time cash payment from Scripps and control of the highly visible Sunday paper. Singleton also will share savings through a new JOA agency combining both papers' production and circulation efforts, while selling combined advertising that's expected to drive up local ad rates.
"Dean has figured out every angle and what is best for him," said Patricia Calhoun, editor of Westword, the Denver alternative weekly. "It doesn't look like Scripps had a lot of choices. It keeps Scripps alive [in Denver] for a while, and for Singleton, it is a way to play a waiting game."
F. Gilman Spencer, a former Post editor who worked under Singleton from 1989 to 1994, agreed. "The Post gets the Sunday paper and $60 million, and you don't have to ask who the winner is," he said. "There is a hell of a lot of money in a JOA, and that is why they are done."
For many industry observers, the deal announced Thursday is unusual not only because it would be the first JOA to be created since 1989 ? bucking a recent trend of papers seeking to dissolve such deals ? but also because it marks the first hint of
battlefield decorum between the competing newspapers.
"They may have seen what is happening elsewhere and realized that they would have a struggle in the future to maintain profits," Ben Bagdikian, retired dean of the graduate school of journalism at the University of California, Berkeley, said about the two newspapers. "In the long run, [Singleton's] accountants may have told him [a JOA] is the profitable thing to do rather than continue head-to-head." In announcing the agreement, the newspapers also revealed ? for the first time ? the staggering differences in their success over the past decade. Scripps President and Chief Operating Officer Kenneth Lowe admitted that the Rocky Mountain News had lost $123 million since 1990 and said he had approached Singleton to create the JOA as an economic necessity. "We are declaring the News as a probable financial failure," he said.
Singleton said the Post made about $200 million over the same period, but acknowledged a need to cut costs and pull back a bit. "It has created a financial hardship for both papers that cannot continue over time," he said. When asked about specifics of how the deal came about, Singleton said only that Scripps approached him some months ago, adding, "I'll put it all in my book."
Under the proposed 50-year agreement, which the newspapers were expected to submit for U.S. Justice Department approval Friday, the News and the Post would combine their circulation, production, and advertising efforts under the soon-to-be-created Denver Newspaper Agency, but maintain separate editorial staffs. The agency would be equally owned by both papers with a 50/50 profit split. The papers would continue to publish their regular morning editions from Monday to Friday, but create joint editions on Saturday and Sunday. The Sunday paper would consist of editorial content from the Post, while the News would be responsible for the Saturday paper.
The Justice Department's antitrust division is to make a recommendation on the deal to Attorney General Janet Reno within 30 days of the filing. Reno could approve or reject the proposed JOA, or could order a hearing before an administrative law judge that essentially becomes an antitrust trial. That judge would make a recommendation to Reno, said newspaper analyst John Morton.

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