The parent company of The Denver Post will broaden its geographic sweep by taking a piece of the struggling Detroit newspaper market in a three-way ownership shake-up of the city’s two daily papers.
Denver-based ap will acquire the 132-year-old Detroit News. Gannett Corp., current owner of the News, will take control of crosstown rival the Detroit Free Press. Current Free Press owner Knight Ridder will exit the Detroit market.
Acquiring the News brings ap’s holdings to 50 daily newspapers, the largest of which is The Denver Post. MediaNews also owns 121 nondaily publications.
The two Detroit papers will continue to have independent, competing newsrooms and combined business operations, similar to the 2001 deal that placed the circulation, advertising and finance units of The Post and Rocky Mountain News under shared ownership.
The acquisition increases MediaNews’ ability to share news content among its papers, a potential benefit to readers in Denver and other markets, said William Dean Singleton, chief executive of ap, the nation’s seventh-largest newspaper company.
“It lets us develop talent in a different city, and any time you can do that, it’s good for the entire group,” he said.
The move gives Gannett the larger, dominant paper, while MediaNews has a chance to turn around the smaller Detroit News and potentially generate profit, newspaper analysts said.
Terms of the deal were not disclosed.
The transaction calls for the previous 100-year joint operating agreement between the Detroit newspapers to be shortened to a 20-year term.
Gannett, the nation’s largest newspaper company and publisher of USA Today, will be the general partner in the agreement; MediaNews will be a limited partner.
Analysts were split on whether the deal will ensure survival of both Detroit newspapers.
“Conventional wisdom says there is not room for two papers in that town,” said Ben Burns, who served as executive editor of The Detroit News in the mid-1980s. “But I can’t imagine (Singleton) would get into this without putting out a paper that’s a credit to him and that makes some money.”
But Michael Bernacchi, a University of Detroit-Mercy marketing professor who publishes a newsletter on local advertising and newspaper issues, said he expects MediaNews will eventually sell the News.
“I would think that that’s what’s going to happen down the road,” he said. “Their business operations are already integrated. Eventually, this is going to become a one-newspaper city.”
Singleton said he has no plans to sell or close The Detroit News.
“We would not have bought it if we didn’t think there was good potential there,” he said. “We believe in Detroit and in two newspaper voices.”
David Butler, editor of the Los Angeles Daily News and a one-time newsroom executive of the Rocky Mountain News, will become editor of The Detroit News.
The Detroit News will switch from afternoon to morning distribution. The Free Press will publish the sole Sunday newspaper.
MediaNews’ purchase of the News is its biggest acquisition since the $200 million buyout of Utah’s Salt Lake Tribune in 2001. It also cements ties between the company and Gannett, which are partners in newspapers in New Mexico and Texas.
Singleton enters a market that is losing population and newspaper circulation, is racially divided and retains lingering bitterness over a 19-month strike in 1995 against the News and the Free Press.
The ownership change came as a surprise to newspaper employees.
“People were very shocked,” Free Press reporter Kim Norris said. “There were people crying and looking very grim.”
One business leader voiced support for the deal.
“We believe this might bring the ability for these two new groups to strongly invest in the News and the Free Press and take them to even greater levels both editorially and in terms of profit,” said Melanie Davis, a spokeswoman for the Detroit Regional Chamber of Commerce.
The News’ weekday circulation fell 2.9 percent to 218,841 in the six-month period ending in March, while the Free Press’ fell 2 percent to 347,447.
The Denver Post in May reported a weekday circulation of 268,004. On Sundays, The Post had 735,621 subscribers.
Bloomberg News contributed to this report.
Staff writer Steve Raabe can be reached at 303-820-1948 or sraabe@denverpost.com.
