Denver Post Owners Roasted by Shareholders, Journalists

journalism student asks Chuck Plunkett for advice about entering the media industry at the Denver Press Club on April 11, 2018. (Amanda Pampuro/Courthouse News Service)

DENVER (CN) – Denver Post’s Editorial page editor Chuck Plunkett won’t take credit for the idea, but since it is his job to call foul ball, he couldn’t help but see it through.

Last Sunday, the Denver Post’s opinion section armed news industry voices in speaking out against mismanagement and excessive layoffs. Along with a photo illustrating the 75 percent staff cuts the paper has taken since 2013, journalists asked the community to save its paper.

“You’d be hypocritical if you thought your industry was in danger and you didn’t say anything,” the Denver Post’s editorial editor told the Denver Press Club Wednesday.

“Already we can’t cover what we need to cover. Already I feel embarrassed to open up the paper,” he said, explaining how he helped orchestrate the U.S. news industry’s largest protest to date.

Along with a photo illustrating the 75 percent staff cuts the paper has taken since 2013, journalists asked the community to save its paper.

 

The problem isn’t the rise of the internet, failure to maintain profits or declining readership—the Denver Post maintains an average weekday circulation of 134,000 and some 16 million monthly views online. Additionally, the paper is reported to bring in millions of dollars of annual profits, keeping its books very green.

Unfortunately, the same could not be said for the hedge fund that owns the company.

Doing business as Digital First Media, MediaNews Group publishes 200 newspapers across 10 states, consumed by 48 million readers each month. But the company’s majority shareholder isn’t concerned about readership, copy, or even whether the Sunday Comics come in full color.

According to a lawsuit filed in the Chancery County Court in Wilmington, Delaware, MediaNews Group’s majority shareholder has used its media interest to fund unrelated investments. The New York-based hedge fund Alden Global Capital, holding 50.1 percent of the shares, used newspaper profits to gamble on an online job board, a pharmacy chain, and Greek sovereign debt.

After company restructuring in 2017, minority shareholders Sola and Ultra Master were cut out of decision making and denied access to company records—so they filed suit.

“For me, as an investigative reporter, what really mattered in MediaNews Group’s response to the lawsuit was its admission of how much money was taken from the newspapers … and how it was taken out of newspapers,” commented Julie Reynolds, who covers the Alden beat for the NewsGuild-Communications Workers of America. “In a legal sense it wasn’t stolen, but it comes darn close.”

To make up for Alden’s losses, Digital First Media downsized at double the rate of the average media outlet. Between 2012 and 2019, the newsroom at Pennsylvania’s Pottstown Mercury dropped from 73 reporters down to 19 and the Norristown Times-Herald from 45 news staff down to 12.

“I knew the number before she said it,” Plunkett said of the Denver Post’s latest round of cuts. “Thirty. Like the number we used to put to signal the end of a story.”

In the Denver Post’s editorial, Plunkett made the sales pitch his own advertising team had refused to run: “Consider this also a signal to our community and civic leaders that they ought to demand better. Denver deserves a newspaper owner who supports its newsroom. If Alden isn’t willing to do good journalism here, it should sell the Post to owners who will.”

The plea isn’t all that far-fetched. Earlier this year the Los Angeles Times was purchased from its own nightmare hedge fund Tronc Inc. by philanthropist doctor Patrick Soon-Shiong. The same year Alden acquired Century Newspaper Holdings for $125 million, Amazon’s Jeff Bezos bought the Washington Post for $250 million and and Boston Red Sox owner John Henry bought the Boston Globe for $78 million.

“At a cost of less than one of [Alden President Heath] Freeman’s bad investments, 350 news workers could have kept working—and keeping their communities informed—for another five years,” Reynolds estimated.

Alternatively, she calculated that Freeman’s $4.8 million house in the Hamptons could support the 30 just gutted positions from the Denver Post for two years.

Revolving doors mark the entrance to the downtown Denver Post building on April 11, 2018. Earlier this year, the newsroom was relocated to the Post’s printing presses in Adams County. (Amanda Pampuro/Courthouse News Service)

While the News Guild has helped workers obtain better wages, it has little power over layoffs.

“Colorado is an at-will employment state meaning that in the absence of an agreement to the contrary, an employee may be fired at any time for any reason or no reason as long as that reason is not otherwise prohibited by Colorado Federal law,” said employment attorney Sam Cannon, adding that if his response sounds rehearsed it is.

“I tell people that probably every other day. People come into my office and say ‘I’ve been treated terribly by my employer,’ and very, very often, the answer is, ‘Yep, you’ve been treated terribly.’ It is wrong in the ethical sense, but it is not illegal in a legal sense.”

While the lawsuit between hedge fund interests does not improve conditions for news workers, Reynolds said it confirmed many of her suspicions and provided a timeline for her work.

These days, the lobby of the iconic downtown Denver Post building feels like a tomb. The typography carved into the walls—shouting a mantra of “journalism” and “integrity”—seems to stand as hieroglyphics, telling the story of a forgotten era.

But no one is ready to call it quits.

“If you’ve got a beat you really care about, you don’t want to leave your readers and your sources hanging,” Reynolds said, echoing the sentiment of dedicated journalists across the country. “Their stories aren’t going to get told if you leave.”

 

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