July 19, 2015
Jim Dabakis inside a downtown Salt Lake City coffee shop.  (AP 2011 file photo/Lynn DeBruin)

Jim Dabakis inside a downtown Salt Lake City coffee shop. (AP 2011 file photo/Lynn DeBruin)

Politician and blogger Jim Dabakis got his Utah constituents and others talking last week when he reported that the Salt Lake Tribune will soon be sold.

Dabakis also worried that such a sale could be a step toward an eventual closing or put the paper under the control of its Joint Operating Agreement partner and competitor, the Deseret News, owned by the Church of Jesus Christ of Latter-day Saints.

There are good reasons for media watchers nationally — not just Salt Lake City residents — to watch how the drama plays out:

  • The JOA is one of only five remaining agreements after the Charleston (WVa.) Gazette and Mail announced today that they are merging editorial operations and will print a single paper. That is down from a peak of 26, under a 1970 law aimed at preserving two-newspaper towns by pooling business functions but keeping editorial separate. The odds of both surviving for long, given that steady attrition, are not especially bright.  The Tribune has traditionally been the larger paper in circulation and news effort but with the church connection, Deseret has much stronger financial backing.
  • The agreement was revised in fall 2013 when Deseret paid an estimated $20 million for printing and other assets.  In exchange the Tribune, which had been receiving 58 percent of the pooled operation’s profits agreed to reduce its share going forward to 30 percent. Dabakis and other critics claim the Tribune can’t survive on that share and has been forced to make newsroom cuts as a result.
  • The Tribune is owned by Digital First Media, which in turn is owned by Alden Global Capital.  The hedge fund had been trying to sell the entire 75-paper chain for at least a year. When that effort fell through this spring, Digital First sold a group of 11 Texas and New Mexico papers to Gannett.  Steve Rossi, who moved up from COO to replace John Paton as CEO in June, has a long industry reputation as a cost cutter and may well want out of the Tribune.
  • One set of critics has formed a public interest group, the Utah Newspaper Project, which asked the U.S. Justice Department to investigate the revised agreement for anti-trust violations and independently sued owners of the two papers on the same charges. Justice has been non-committal, while the suit has survived a motion to dismiss. Full discovery is scheduled to begin in the fall and finish early next year.
  • Jon Huntsman Sr., father of the 2012 presidential candidate and believed to be the richest man in Utah, has said publicly that he would like to buy the Tribune but feels he can’t with the Justice department investigation pending.  A Mormon with ties to Church leadership, Huntsman indicated he would keep the Tribune independent. He could provide reinvestment runway as other benefactor-owners have done — Jeff Bezos for the Washington Post, John Henry for the Boston Globe, Glen Taylor for the Star Tribune of Minneapolis.

A particular flash point for Dabakis and the Utah Newspaper group is wording that appears to give Deseret veto power over any potential Tribune buyer.

In his post a week ago Dabakis wrote:

If the Trib were to go away, or to become a patsy for the Deseret News or have owners that were willing to buckle under the dominant political and cultural forces in the state – the ramifications for {Utah} would be epic. The state would be without an independent, serious press anchor. Especially with the recent direction of the Deseret News, which has become an ecclesiastical voice rather than a traditional newspaper. On countless issues it is exclusively the Tribune that reports on the facts – fairly, without fear and without the influence of the political power structure.

Dabakis is a state senator, former chairman of the Utah Democratic Party, gay rights activist and (according to his Wikipedia bio)  a former Mormon who left the church.  When I sought comment last week, he returned the call, from Mexico, within a minute.

He declined to say more about his sources but said they are confident that Digital First is looking for a buyer and has found several interested parties.  “This is the weaker paper strangling the smaller one,” he said, and added “the hedge fund is as bad as an owner can be for a paper — they’ve sold off every paper clip.”

Rossi answered my e-mail seeking comment saying that by policy, the company does not discuss potential acquisitions or sales.  E-mails and a phone call to Deseret executives were not returned. Neither company makes financial results public and both have tried to keep what detail they can of the JOA private.

All this secrecy-as usual makes for “a lot of unknown unknowns,” Joan O’Brien, head of the Utah Newspaper Project, told me by phone.  Her group was not a source for Dabakis, she said.  And in the event of a sale, “we’ll be in a position to weigh in, and we’ll need to take a look at it.”  The veto power provision is troubling, she said — “a right of first refusal on steroids.”

O’Brien objected to a piece I wrote earlier this year when Clark Gilbert left after five years as Deseret’s CEO to become president of Brigham Young University – Idaho. Gilbert’s acclaimed initiatives to develop new digital products and a national and international franchise covering “faith and family values” issues are seen by local critics as neglect of Deseret’s local news mission.

O’Brien’s website highlights the how emotionally charged the issue has become: the tip that the renegotiation was in the works came ransom-note style, hand-lettered on plain paper, so that the author could not be identified. O’Brien has ample reasons of her own to feel strongly — she is a former Tribune editor, married to a Tribune reporter and daughter of a longtime Tribune publisher.

My own take is a little different from the locals.  I’m doubtful that there are significant profits left to split up.  And my hunch is that Deseret execs would prefer a weakened but still-publishing Tribune to flexing their muscle to become the only newspaper organization in town.

The joint operating two-newspaper status quo may seem the natural order of things in a given town, but these arrangements generally have not worked as a business proposition — witness the closings of the Rocky Mountain News, Seattle Post-Intelligencer and  Honolulu Star-Bulletin in recent years.

On the other hand, the logic of two editorial voices, which JOAs are meant to maintain makes as much sense in Salt Lake City as anywhere with its relatively even numbers of Mormons and non-Mormons.

And business has not ground to a halt at the Tribune.  Last week it introduced a new “membership” plan offering takers an ad-free version of its website and invitations to a series of community events  — just the sort of digital experimentation most American newspapers are trying.

Corrections: A previous version of this article incorrectly referred to the church that owns the Deseret News. It is the Church of Jesus Christ of Latter-day Saints, not the Church of Jesus of Later Day Saints. A previous version of this story also misidentified Glen Taylor. It has been corrected.

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Rick Edmonds is media business analyst for the Poynter Institute where he has done research and writing for the last fifteen years. His commentary on…
Rick Edmonds

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