When they formed a joint operating agreement back in 2001, the owners of The Denver Post and Rocky Mountain News had to clear numerous hurdles to win Department of Justice approval.
But ending such agreements is more haphazard, and this time around the Justice Department is saying it won’t act to prevent the News from closing.
“The Department has concluded that Scripps decision to close the Rocky Mountain News is not inconsistent with federal anti-trust laws and the Newspaper Preservation Act,” said Justice Department spokeswoman Gina Talamona.
The act, passed in 1970, allows struggling newspapers an exclusion from anti-trust provisions to combine business operations.
The Post and News did so in May 2001, creating an entity called the Denver Newspaper Agency that handles business operations, including circulation, printing and advertising.
But the law says little about disbanding such agreements.
“The ease or difficulty of breaking up has varied with who is running the Justice Department and the conditions in the economy,” said Stephen Lacy, a journalism professor at Michigan State University.
Scripps CEO Rich Boehne said Monday the company consulted with the Justice Department before announcing the Rocky’s closure.
Although Justice officials didn’t give approval, they did tell Scripps executives they wouldn’t object, he said.
Stephen Barnett, a retired law professor at University California Berkeley, argues they should have, given the short six-week window Scripps offered to find a buyer.
“The whole point of the Newspaper Preservation Act is to keep two papers in publication. It violates the anti-trust laws to close one,” he said.
Justice officials objected when the Globe-Democrat,a JOA paper in St. Louis, threatened to close in 1983, which helped flush out a buyer who kept the paper going until 1986.
But even if the Justice Department made a case of it, a court would likely support the decision to end the agreement given economic conditions, other experts said.
“The only thing they could really do is say that you have to search for another buyer,” said Lacy, who adds that was the court’s opinion in the break up of JOAs in Honolulu and San Francisco.
In the highly unlikely case a buyer could even get financing, nobody is going to buy a major metro daily that is losing money in today’s environment, Lacy said.
“The court won’t say the Justice Department can force a company to continue to lose money,” he said.
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
