Two-newspaper markets, like Denver’s, are headed the way of typewriters, film cameras and other relics of journalism.
Vibrant, competing daily papers were the norm in dozens of cities during the 20th-century golden era of newspaper publishing.
But that number has dwindled to a handful. And the endangered status of two-newspaper towns could soon devolve into extinction.
Denver, one of the few survivors, now wears a prominent red bull’s-eye by virtue of E.W. Scripps Co.’s decision to attempt a sale of the Rocky Mountain News.
Scripps said it will entertain offers through mid-January, at which time it will consider other options, which include shutting down the paper.
Most analysts say the prospects for finding a buyer for a money-losing newspaper in a troubled economy are slim.
If the News closes, it would mark the first time in more than a century that Denver would not boast two major, competing daily newspapers.
Loss of subscribers, declining advertising revenue, the rise of the Internet, economic weakness — all are contributors to the plunging fortunes of newspapers, particularly those that compete in the same cities for shares of shrinking income.
Since 2005, Scripps has closed newspapers in the two-paper markets of Cincinnati, Albuquerque and Birmingham, Ala.
Nationally, only about 10 cities still have major, competing dailies, including Boston, Chicago, Detroit, New York, Seattle and Washington, D.C.
Some papers, including the Rocky Mountain News and The Denver Post, have merged business operations in an attempt to reduce costs and keep revenues up.
But even those so-called joint operating agreements have failed to stem losses.
Advertising declines
Spending on newspaper ads fell 9.4 percent in 2007 to $42 billion, according to the Newspaper Association of America, and 2008 declines are expected to be much steeper.
Classified advertising revenues have been especially hard hit, down 16.5 percent from 2006 to ’07, as advertisers and their customers have shifted to Web-based vehicles such as .
“Newspaper economics these days are unprecedented,” said Edward Atorino, a New York-based publishing analyst with The Benchmark Co. “There hasn’t been an environment like this since the Great Depression, or before.”
“The long-term trend would indicate that the days of two-newspaper markets are numbered,” he said.
In Denver, it could be a shorter-term trend.
Both the Rocky Mountain News and The Denver Post have suffered significant financial losses in recent years.
The red ink has flowed despite creation of the joint operating agreement in 2001 that combined the business operations of the two papers into a new entity, the Denver Newspaper Agency, while keeping their newsrooms independent and competitive.
Rocky loses $11 million
Publicly traded Scripps has reported in financial filings that the Rocky lost $11 million in Denver for the first nine months of 2008.
ap, the privately held owner of The Denver Post, doesn’t report financial results, but its losses in Denver are in the same ballpark, said chief executive William Dean Singleton.
“There is not enough revenue to support two newsrooms in Denver,” Singleton said.
The Post’s editorial budget this year is $24 million; the News will spend an estimated $22 million on its Denver news-gathering operations. Yet each newspaper’s share of revenue from the joint operating agreement was about $5 million in the past nine months — just a fraction of the newsroom expenses.
Singleton said cracks in the Denver JOA began to appear shortly after it was launched in 2001.
Both newspapers were suffering revenue losses stemming from a vicious circulation battle in which subscriptions had been sold for pennies a week.
Then an economic decline brought on by troubles in the technology sector set off a chain reaction of cutbacks in classified and retail advertising.
“The move to the Internet by advertisers and the decline in the economy caused the JOA to begin to lose profits every year,” Singleton said.
The Denver Newspaper Agency does not release financial information, but Singleton said keeping two newspapers alive in current economic conditions is unsustainable.
One paper could survive, he said.
Many of the losses in classified advertising are permanent, Singleton said. But more than half of the recent revenue loss from cutbacks in retail advertising is cyclical, Singleton said, and could be recovered.
Richard Boehne, chief executive of Scripps, described the Denver newspaper market in a recent interview as “more than difficult.”
Closure a possibility
He said an attempted sale of the News and the paper’s 50 percent share of the Denver Newspaper Agency is Scripps’ “preferred option,” but added that closing it down is a possibility.
“The marketplace (in Denver) has signaled very clearly that the status quo is no longer an option,” said Scripps spokesman Tim King.
Ben Burns, a newspaper analyst and chairman of the journalism department at Wayne State University, said irreversible trends in newspaper finances and readership likely will make Denver the next two-newspaper city to downsize to one.
“I would be surprised if there are any bidders for the Rocky,” he said, “unless there’s some guy with megabucks sitting there in Vail looking for a big hole to throw money into.”
Steve Raabe: 303-954-1948 or sraabe@denverpost.com
