150-year-old newspaper shuts down, victim of downturn

By Keith Coffman and Robert Boczkiewicz, Reuters

Posted at Feb 27 2009 08:46 PM | Updated as of Feb 28 2009 04:49 AM

DENVER - Media conglomerate EW Scripps Co will close the Pulitzer Prize-winning Rocky Mountain News after failing to lure qualified buyers, as the industry endures a painful and prolonged economic downturn.

The 150-year-old Denver newspaper will run its final edition on Friday, but employees will remain on the Scripps payroll through April 28.

Scripps Chief Executive Rich Boehne said the newspaper had "only one potential buyer" who had ultimately "backed away".

"It was not an industry player nor one who has been involved in the newspaper industry in the past," Boehne said at a Denver news conference following the announcement.

The Rocky lost $16 million in 2008, and Boehne told workers that Scripps chose to close it to preserve the health of its other newspapers, according to a blog posted by the paper.

The closure leaves a city that witnessed a colorful, century-long newspaper war with just one major daily -- MediaNews Group's Denver Post. Eight years ago, the two papers consolidated business, printing and advertising operations in a joint operating agreement to preserve both editorial voices.

But the economy and a changing business model made it impossible for the city to support two newspapers, MediaNews Publisher Dean Singleton said at the news conference.

Because the Post had an established Sunday edition, the partners decided it would survive and The Rocky would fold, Singleton said.

"It could have gone either way," he said. "The newspaper business will survive and thrive...we've just got to get through it."

U.S. Sen. John Kerry predicted "this won't be the last in this unfortunate trend in the newspaper business" and pledged to "take a hard and close look" in his capacity as chairman of a committee on communication, technology and the Internet.

'Familiar faces'

Scripps management met with employees on Thursday morning to announce the closure, which came about three months after the paper was put up for sale.

About 235 newsroom employees will lose their jobs, but workers in the joint operation, the Denver Newspaper Agency, will be unaffected, a Scripps spokeswoman said.

The Post hired about 5 percent of The Rocky's journalists, mainly columnists, in a bid to broaden its editorial voice and retain Rocky readers, Post editor Greg Moore said.

"We need to retain as many of those readers as possible and by having some familiar faces and features from The Rocky, our chances improve greatly," Moore said in a staff memo.

Boehne said costs associated with the severance and closures would be reflected in Scripps' first-quarter results. He did not disclose the amount.

The Rocky's demise had been expected after Scripps said in December it was putting the tabloid up for sale, as advertisers slashed budgets and readers headed online to get their news amid a global recession.

Shares of Scripps, which also owns television stations, closed down 6.8 percent on Thursday at $1.10.

The decision comes after a number of high-profile newspaper chains have filed for bankruptcy or taken steps to preserve their bottom lines by cutting costs. This week, the Hearst Corp said it may shut the San Francisco Chronicle, the city's main newspaper.

And Gannett, the country's largest newspaper chain, said on Wednesday it would cut its quarterly dividend by 90 percent.

Among the bankruptcy filers are Los Angeles Times and Chicago Tribune publisher Tribune Co; the Journal Register Co; and Philadelphia Newspapers LLC, publisher of The Philadelphia Inquirer and Daily News.

In addition to plunging advertising revenue and the grim economy, the newspapers cited problem restructuring debt in frozen credit markets as the reasons for their bankruptcies.

Scripps said it would keep trying to sell the newspaper's assets, including its name, masthead, archives and website, as well as its 50 percent interest in the Denver Newspaper Agency.

Scripps had closed its hometown paper, the Cincinnati Post, in 2007 and the Albuquerque Tribune a year later.

The Rocky was founded in 1859 before Colorado was a state and before the Wall Street Journal, Washington Post and Los Angeles Times first published.

It covered the mining rush, which first brought settlers to Colorado, the Indian Wars and the settling of the American West. Scripps bought the paper in 1926.

Circulation had dropped about 7 percent to an average of 210,000 in the six months ended September, from 225,000 a year earlier, according to the U.S. Audit Bureau of Circulations.