Denver Post owner ap issued a statement today saying that its management of Post newsroom expenses has been proper and that an article in today’s Rocky Mountain News about financial issues between the Post and the Denver Newspaper Agency contained “many inaccuracies.”
The News article cited a purported letter from News owner E.W. Scripps to ap, claiming that MediaNews had violated terms of a joint-operating agreement between the two newspapers.
Neither Scripps, MediaNews nor the DNA have confirmed the letter’s authenticity, but the News posted a copy of the letter on its website.
The Scripps letter alleged that MediaNews breached its contract under the agreement by borrowing money from the Denver Newspaper Agency to meet the Post’s newsroom payroll. The agency manages the business operations of both newspapers.
MediaNews, in the statement, said its borrowings from the agency and its newsroom-payroll procedures are in accordance with terms of the operating agreement.
MediaNews also said the agreement is likely to terminate soon if Scripps sells or closes the News.
“If the Rocky Mountain News ceases publication, it will be in violation of the joint-operating agreement, and the agreement will end,” the statement said.
“If the Rocky Mountain News is sold, The Denver Post intends to exercise its options to buy all of (the) Denver Newspaper Agency,” at which time, all receivables and payables between the Post and the agency will be reconciled, the statement said.
The full text of the statement from The Denver Post Corporation
A story in Wednesday’s Rocky Mountain News refers to a purported letter from The Rocky Mountain News’ owner, the EW Scripps Company, suggesting that The Denver Post was in “violation” of the Joint Operating Agreement between The Rocky Mountain News and The Denver Post because the Denver Newspaper Agency provided payroll funding for The Denver Post.
The story noted that the letter was emailed to the newspaper. Neither Scripps nor The Denver Post acknowledged the authenticity of the letter, and a Denver Newspaper Agency spokesman denied that the Denver Newspaper Agency had ever received or seen the letter.
The story is full of so many inaccuracies and we cannot address all of them here, but here are some of the fundamental facts:
The Joint Operating Agreement, as written when the venture was created on January 20, 2001, provides for the Agency to pay editorial costs for the newspapers and the Agency has paid the Denver Post newsroom costs from the beginning. Those costs are then subtracted from the Agency’s distributions to The Denver Post.
The owner of the Rocky Mountain News, also from the beginning, chose to pay its newsroom costs directly rather than choose the option provided in the agreement, and receive a full distribution from the Agency, when distributions are made. Nothing has changed since the Agency was formed and there is no “violation” of the Joint Operating Agreement as the story suggests.
On any given day, there are receivables and payables between Denver Newspaper Agency and its two partners. That will continue until the Joint Operating Agreement ends, which appears to be imminent.
Scripps has announced it will sell or close the Rocky Mountain News, and has told The Denver Post that will happen very soon. In either case, Denver Newspaper Agency will end.
If the Rocky Mountain News ceases publication, it will be in violation of the Joint Operating Agreement, and the agreement will end.
If the Rocky Mountain News is sold, The Denver Post intends to exercise its options to buy all of Denver Newspaper Agency, and Denver Newspaper Agency and The Denver Post will be consolidated. In either case, The Denver Post and the Denver Newspaper Agency will become one organization and will publish only The Denver Post. At that time, the intercompany balances between The Denver Post and the Denver Newspaper Agency will offset, and the combined company will be recapitalized with a plan to successfully move The Denver Post into the future.
The story irresponsibly suggests that The Denver Post Corporation is incapable of funding its payroll. That is simply not true, and EW Scripps executives have been told the facts on numerous occasions. In short, there is no reason to change the status quo during the Scripps sale process and until such time The Denver Post and the Denver Newspaper Agency can be combined.
The Denver Post is hopeful that a resolution comes soon and puts an end to endless rumors, innuendo and irresponsible reporting by the Rocky Mountain News.
