A Scripps Shuttering Worries Rocky Lovers
The July 17 decision by overlords at the E.W. Scripps Co. to close the Cincinnati Post and its sister paper, the Kentucky Post, at year's end has locals wondering if the same fate might befall the Rocky Mountain News, Scripps' flagship newspaper. Fortunately, such a move is very unlikely in the near term. Still, the impending death of the aforementioned publications demonstrates that Scripps puts fiscal matters ahead of sentimentality when it comes to its properties. Closing the two Posts is an embarrassment that strikes very close to home for Scripps. The company, after all, is based in Cincinnati. But that didn't stop the powers-that-are from pulling the trigger -- and if the Rocky begins spiraling downward in a much more precipitous way than is currently the case, they won't hesitate to take executive action.
At first glance, the Rocky and the Cincinnati Post have a lot in common -- but the comparison is superficial. Yes, the Post has been a partner in a joint-operating agreement with a crosstown paper, the Cincinnati Enquirer. However, this JOA has been in force since the late 1970s, and three years ago, the Enquirer informed the Post that it would not renew the thirty-year pact for reasons that have everything to do with profits and losses. According to circulation figures included in the article linked above, the Enquirer's Monday-Saturday circulation is just a hair shy of 198,000, whereas the Post racks up an anemic circ of 28,549 from Monday through Friday.
Equity is key to a healthy JOA, and right now, the Rocky and its business partner, the Denver Post, are within spitting distance of each other circulation-wise. As long as that remains true, the accord, which calls for a 50-50 profit split, has a reason for being. But if the sales of one paper begin to plummet in relation to the other, the strain created by the more successful publication having to prop up a onetime rival at the expense of its own bottom line will eventually tear the agreement apart.
Of course, there are plenty of other pressures at play right now. As reported in this piece from the July 18 Wall Street Journal, the decline in advertising revenue at newspapers has accelerated, and is now down nearly 5 percent in comparison to the same period last year. Consider the example of Gannett, owner of the Cincinnati Enquirer. An Associated Press article points out that the firm will report higher second quarter profits, but only because it earned over $73 million from sales of newspaper properties. If this windfall hadn't come along, Gannett's earnings would have been down by pretty much the same percentage as nationwide ad revenue dipped.
Given this environment, the folks at the Rocky can't assume they're safe for the long haul just because they're in a relatively neck-and-neck race with the Denver Post. Scripps isn't in the business of losing money, as was demonstrated by the death knell that's tolling for its hometown newspaper. -- Michael Roberts