Here’s some good albeit ironic news: Editor & Publisher notes that United Media Syndicate profits
jumped 36% in the fourth quarter last year, the same quarter that Scripps,
United Media’s parent, offered Denver’s
Rocky Mountain News for sale, closing
it in February 2009 because it couldn’t afford to continue losing money in the
newspaper division. United Media’s revenue for the last 2008 quarter increased
20% to $30.9 million, compared with $25.7 million in the year-ago period,
Scripps said.“Scripps attributed the United Media profit increase to the
decision by the ABC television network to air 13 ‘Peanuts’ specials in the
quarter. United Media syndicates Peanuts,
Dilbert, Marmaduke and about 150 other comics and features.” You’d
think — wouldn’t you? — that an advantage to being part of a huge communications
enterprise is that the profitable elements in the operation would support the
unprofitable parts, seeing them through such hard times as ours. Not at Scripps.
Scripps,
which owns 16 newspapers around the country and 10 TV stations, has other
plans. In the June issue of 5280, a
Denver magazine the numerical name of which reminds us that this is the Mile
High City, Maximillian Potter, the magazine’s executive editor, supplies what
I’m persuaded is the “real reason” that Denver’s 155-year-old Rocky Mountain News died a few months
ago.
Yes, it’s true that the paper was losing better than $1 million a month,
roughly $16 million a year. There may not be enough of the aforementioned $30.9
million left after operating costs to float the News outright, but as Potter said, “Scripps is in the best
financial shape of any newspaper company in America.” So while accountants
wouldn’t like robbing Peter to pay for Paul, Scripps, with United Media’s help,
it could have carried the News until
better times. If, that is, Scripps hadn’t wanted to kill the paper. Scripps
wanted the News to die an ignominious
death, unwanted, unsaleable. So it put the paper up for sale and allowed only a
month for some interested party to come forward. None did. A month isn’t,
really, long enough for any interested party to examine the prospects and then
put together an offer.
But Scripps didn’t care: its plan was of another sort
altogether. Turns out that if the News
could be declared “worthless,” Scripps could pull the plug on it and gain a $70
million tax advantage. If the paper wouldn’t sell, it was, perforce,
“worthless.” And Scripps was suddenly, effectively, $70 million to the
good — money it could use in its new ventures into cable TV, Home and Garden
Television and the Food Network, and its Internet enterprises, which is where
Scripps has been investing for several years. It folded four of its newspapers
between 2000 and 2008; now, with the News,
a fifth has withered away. Writes Potter: “Shutting down newspapers was merely
the opportunity cost of doing business.” And the business Scripps is doing
these days is only marginally the newspaper business.
The only
winner in the Denver
debacle was, sadly — no one wants to win this way — the comics section. The Denver Post, while the expired News was still warm, announced that it
would add all of the News comics to
its own roster, hoping, thereby, to seduce News
subscribers to the Post. Too soon to
say, yet, if it has worked.