[27 February 2009]
Denver’s Rocky Mountain News, founded in 1859, will publish its final edition Friday, parent company E.W. Scripps Co. said Thursday, as the lethal combination of changing consumer habits and a devastating economic crisis claimed another newspaper business casualty.
Scripps had said in December that it would seek a buyer for the Rocky Mountain News and its 50 percent stake in the Denver Newspaper Agency, which publishes the Rocky and the Denver Post under a joint operating agreement. (Closely held MediaNews Group owns the other half of the partnership.)
The company warned that if a buyer was not found by mid-January, the Rocky Mountain News would be shut down.
In a statement, Scripps said the sale process “produced no qualified buyers.”
E.W. Scripps shares slipped 8 cents to close at $1.10.
The company closed the Albuquerque Tribune last year, and shut down the Cincinnati Post in 2008.
Last year, Scripps divided itself into two entities to help investors focus on its more lucrative cable networks business, which includes Food Network and HGTV. The cable channels are part of Scripps Networks Interactive.
No one seems to know what to do to close the gaping wound at many newspapers. On Tuesday, Hearst Corp. said it would be forced to close or sell the San Francisco Chronicle if a series of cost-cutting measures don’t pay off “within weeks.” The company cited “the sea change newspapers everywhere are undergoing and these dire economic times.”
Last weekend, Philadelphia Newspapers LLC, the privately held publisher of the Philadelphia Inquirer, the Philadelphia Daily News and Philly.com, filed for Chapter 11 protection, as did Journal Register Co., parent of the New Haven, Conn., Register.
“Today the Rocky Mountain News, long the leading voice in Denver, becomes a victim of changing times in our industry and huge economic challenges,” said Rich Boehne, chief executive of Scripps. “The Rocky is one of America’s very best examples of what local news organizations need to be in the future. Unfortunately, the partnership’s business model is locked in the past.”
The Rocky Mountain News is Colorado’s first newspaper and the state’s oldest continuously operated business. Scripps acquired the publication in 1926.
In its fourth-quarter earnings announcement last week, Scripps said its losses in Denver totaled $16 million in 2008.
Until September, newspapers already were struggling to cope with a transition to online-news consumption that had siphoned off classifieds and other advertising revenue, along with circulation.
Yet the worldwide financial collapse triggered by the bankruptcy of financial-services firm Lehman Brothers pushed newspapers from a crisis into a catastrophe. Across the board, year-over-year classified-ad declines of more than 30 percent are now commonplace. At the same time, a tight credit environment has made it difficult for troubled newspapers to renegotiate terms with their creditors.
As a result, newspapers are threatening to close or heading to bankruptcy court.