Colorado’s largest daily and a cluster of mid-size and small newspapers throughout the state are up for sale.
At least that is how The Denver Post, the state’s paper of record, packaged the news of its future Friday. The story under the Post headline reporting the pending sale was less clear.
Digital First Media — which ranks among the top two or three largest-circulated newspaper chains nationally — announced this morning that it will “evaluate and consider strategic alternatives” that could lead to the sale of the whole company or pieces of it.
The hedge fund backing the New York City-based corporation specializes in investments, not journalism.
“At the outset, it bought [the chain] on the cheap as a distress asset to sell as soon as possible,” said Alan Mutter, a leading expert and blogger on media investments. “They don’t care if they’re in the newspaper business or the steel business or the taco business.”
Digital First Media is a dominant force in Colorado daily journalism, listing among its “products” The Post as well as Viva Colorado, The Boulder Daily Camera, Canon City Daily Record, Fort Morgan Times, Longmont Times Call, Loveland Reporter Herald, Estes Park Trail Gazette, Broomfield Enterprise, Lamar Ledger, Julesburg Advocate, Brush News Tribune and Burlington-Record.
What the future holds for all of those newspapers is unclear.
“If I were you, I’d call Phillip Anschutz and ask if he wants to buy the newspapers in the Colorado area. A number of wealthy individuals around the country have bought their local papers… It’s happening all over,” Mutter told The Independent.
Anschutz, a Denver-based billionaire with growing media and other assets nationally and internationally, has bought The Colorado Springs Gazette, and sources have said he has been considering buying The Post.
Neither he nor his public relations department could yet be reached for comment.
The ailing Digital First Media manages papers in fourteen states altogether. It is particularly dominant in California, where it runs The Oakland Tribune, Los Angeles Daily News, San Jose Mercury News, Santa Cruz Sentinel, Long Beach Press-Telegram, Berkeley Voice, Contra Costa Times, Pasadena Star News, San Bernardino Sun, among many other newspapers.
Friday’s announcement comes as little surprise as the The Denver Post’s circulation, staff size and journalistic quality have dramatically waned. The paper’s newsroom is a skeleton of its former self, and many of its top staffers who have not been laid off in the past several years have jumped a ship they’ve felt is sinking. About 30 percent of The Post’s staff has been reduced since Digital First Media bought the paper, said Tony Mulligan, administrative officer for The Denver Newspaper Guild.
“I guess we could be hopeful that the new owner — a Colorado-minded rich person or group of rich people — will be committed to Colorado and the service that the paper should act as,” Mulligan said. “You never know whether it’s going to be an improvement or a turn for the worse. I guess we could end up with a new owner who’s not committed to good journalism and has less ability than the current owners to run decent outlets.”
The Denver Post now rents space in a Downtown Denver building it no longer owns. It occupies a newsroom that’s half the size, physically, than it was two months ago. Employees pay a greater share of their healthcare than ever. They have no company contributions to their retirement, and many other benefits have been scaled back. Salaries are stagnant.
A primary reason for The Post’s rapid descent is that it’s strapped with debt. It owes regular cash payments to Alden Global Capital for forgiving hundreds of millions in debt since at least 2010. And it’s carrying bank loans that are thought to total $150 million or more.
Layoffs at The Post are consistent with a national trend — one in three newspaper journalists in the U.S. have lost their jobs over the past decade. Circulation is half what it was ten year ago. Newspaper sales peaked at $49 billion in 2005. In 2013, sales dove to less than half that number, $22 billion.
“There are tons of statistics about the decline of the industry,” Mutter said. “All those number are out there. And they all suck.”