As daily newspapers become less than daily -- witness the East Valley Tribune's move into the world of four-day-a-week dailiness in January -- why would we expect a metro area to support two daily newspapers? Against that backdrop, Scripps' announcement that it is "selling" the venerable Rocky Mountain News is little surprise. The "sale" tag, though, looks more like a close-out, bargain bin last offer, rather than a holiday surprise. Announcing that the paper is for sale on Dec. 4, with a deadline of mid-January makes any sale difficult. The Rocky joins properties in Norfolk, Greensboro, Austin and San Diego -- all once considered great newspaper markets -- on the block, though the credit freeze is pushing their owners to pull them off the marketplace and "re-list" later.
If you look at the basic math, you can see the problem, and why such shutdowns may become more numerous. Scripps reported that it lost $15 million on the Rocky in 2008. The Rocky would then be one of those 19 top 50 market papers that Dean Singleton told us were unprofitable by mid-year. That number has undoubtedly grown as we reach the end of this seemingly endless year of pain. I have little doubt that now more than half of the top 50 are unprofitable, even with the jaw-dropping cutbacks we are seeing; ad revenue continues to plummet, and the first half of 2009 looks ominous.
It's one thing for these companies to run operations that are close to, or just above the profit line. It's another -- their shareholders and re-financing lenders remind them -- to run one that is requiring subsidy. We can call it investment, but to call it that, you'd have to peg a return to healthy profitability at some point certain -- and no one can do that. So it's a subsidy. And that's not what public, profit-seeking companies are designed to do. The Denver JOA -- JOA, a concept overtaken by marketplace and technological change -- was meant to share profits, not subsidies.
Once that line of profitability is crossed, a descent into chaos begins. That's where we are as we approach 2009.
The signals we're seeing today -- the massive Gannett layoffs, the Rocky "sale", quickening production and distribution consolidations and cutbacks -- all point to a reality: the industry can't wait for the economic recovery. It's too far off, and uncertain in its impact. ("Coming: The Newspaper Recovery Classified Stimulus Act of 2009").
As an alumnus of the now-Scripps-owned Boulder Daily Camera (1984-1986, aka The Golden Years), I'm not sure where the Rocky plan puts the Camera. Just last month, Scripps announced it was selling the Camera building, sitting on the corner of the legendary Boulder mall. The Camera was once picked up by Scripps in its circulation war with the Denver Post, a war that seems like an artifact of some quick-disappearing history now.