The Denver Post's fiery response to charge that it violated JOA with the Rocky Mountain News

Categories: Media

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"Leaked Letter Reveals Deep Problems at Denver Post, Denver Newspaper Agency," a More Messages blog published this morning, considers the content of "Scripps Says Post Violated JOA," a David Milstead-penned piece from today's Rocky Mountain News. The article's centerpiece is a letter purportedly written by Rich Boehne and Mark Contreras, a pair of executives for E.W. Scripps, the Rocky's owner. The missive claims, among other things, that the Post borrowed $13 million from the Denver Newspaper Agency in order to meet its payroll. Moreover, the DNA, which handles business matters for the Post and the Rocky under a joint-operating agreement, is said to be in such sorry shape that its banks won't lend it any more money.

These assertions stirred up the Denver Post newsroom -- so much so that editor Greg Moore sent employees an official memo disputing virtually everything in Milstead's salvo other than spelling and punctuation. Read it after the jump.

THE DENVER POST CORPORATION

January 28, 2009

A Statement form 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 eminent.

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.

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