Alaska Dispatch News publisher Alice Rogoff on Sunday wrote six rather amazing words for someone who professes to be in business, any business:
Those words raise an interesting question:
Is the Dispatch, an entity that operates as both a newspaper and a website at ADN.com, a business or the strange hobby of a billionaire’s wife?
This is not just some esoteric, navel-gazing question. It is a question with some serious, real-world implications.
All indications are that Dispatch.newspaper been losing millions of dollars per year. Rogoff has been personally subsidizing those losses. The subsidies – all that money flushed down the Alaska newshole – likely make for nice tax write-offs for Rogoff if the Internal Revenue Service considers her newspaper a legitimate business.
But is it really?
Those reading this story no doubt have various ideas of what constitutes a “hobby,” but the IRS has its own simple definition; “hobby, an activity not engaged in for profit.
“The IRS presumes that an activity is carried on for profit if it makes a profit during at least three of the last five tax years, including the current year — at least two of the last seven years for activities that consist primarily of breeding, showing, training or racing horses,” according to the IRS website.
“If an activity is not for profit, losses from that activity may not be used to offset other income.”
Rogoff bought controlling interest in Dispatch.com in 2009. That’s now eight years ago. After the purchase, the company never made a profit. As Dispatch.com grew from its start, managing editor Tony Hopfinger several times tried to reach profitability only to be told by Rogoff that instead of worrying about making the bottom line balance he should add staff.
In 2014, Rogoff bought the Anchorage Daily News from The McClatchy Company, a California-based publisher, for $34 million. Dispatch.com was at the time merged into a new company – Alaska Dispatch News – to maintain McClatchy’s old, online address for the Daily News at ADN.com
After the sale, Hopfinger outlined for Rogoff the things that needed to be done to make the joint operation profitable. The Daily News – which had added reporting staff as a news war heated up with the smaller, upstart Dispatch.com – was already at the point of having more staff than it could afford.
The proper business decision was layoffs, but Rogoff didn’t want to do that for a couple of reasons. The biggest seemed to be that she was worried about the public relations implications of a recent Alaska immigrant from Washington, D.C. putting Alaska reporters out of work (as if anyone would care).
The other issue was that instead of buying the assets of the Daily News and starting the Alaska Dispatch News as a new company, Rogoff bought the Daily News itself. That left her legally shackled to a McClatchy severance policy in the Daily News employee handbook.
If she’d dumped some of the ADN’s oldest and least productive staff, she would have had to pay them tens of thousands of dollars in compensation for their years of service to McClatchy. She didn’t much like the idea of paying some of them a fair amount of money to leave.
The author of this story was a reporter at Dispatch.com once close to Rogoff, website co-founder Amanda Coyne, and her former husband Hopfinger. Coyne, Hopfinger and a few other staff on the Dispatch staff talked regularly about trying to make Dispatch.com the first, successful, online, for-profit news organization in the country.
Rogoff seemed to share that goal except when she didn’t.
In her Sunday editorial (a commentary on which, interestingly enough, ADN.com didn’t allow online comments), she wrote that “in 2014, when Alaska Dispatch purchased the Anchorage Daily News, the first thing we changed was to make all our digital content free. We believed then — as I still believe — that publishing the news is a public service, and we wanted our new, broader content to be accessible to all Alaskans and everyone in the world who wanted to know more about this wonderful place.
“I still feel that way. Publishing the news is a way of contributing to a ‘civil society’ and I still want our news to be available to anyone who wants to be better informed about Alaska and the issues that affect us.”
After this introduction, she went on to add that ADN.com was going to start requiring “memberships” (think public radio with a mandatory fee) available for just shy of $100 per year to access the website.
Not because she wants to make money, she explained, but because “we have to stay afloat.”
Why was not defined. Nor was there any clarification of the inherent conflict between the big, fat fee and the belief in free online news – “as I still believe,” she said. But she did her best to make it clear none of this was about money.
“We don’t need to make money,” she wrote.
Here at craigmedred.news, “we” do need to make money, or we don’t eat. We are pretty damn hungry at the moment, but we still believe in free online news.
Sadly, we don’t have access to the billions at Rogoff’s disposal, but we will gladly accept contributions from anyone. We don’t want handouts, but if you think the product good we welcome tips just like any other business while we figure out how to better monetize the operation.
We promise not to do it by trying to sell you a load of bunk about how important the work we do. We do journalism. It is only important and interesting to the people to whom it is important and interesting at any given moment.
On any given day at any given time, it might not be the least bit important or interesting to you.
We believe the news is a product, but we don’t think you’re under obligation to pay for it because of “the costs associated with publishing a print newspaper — paper, ink, printing and delivery,” as Rogoff put it.
“(Because) what you might not realize, unless you work behind the scenes, is that a digital publication the size and scale of adn.com costs a great deal to produce, as well. Design and programming, web hosting, content management systems and other tools and services require heavy investment. And of course, the largest cost is the news staff.”
Oil also costs a great deal to produce. BP Alaska spent about a $1 billion on the Liberty project and never produced a drop of oil. ADN.com – new version or old version, take your pick – has rarely (if ever) alluded to the astronomical costs of Alaska oil production in all the years of discussing oil taxes in Alaska. There has been no proselytizing for any other business because of the high costs of production.
Apparently, Rogoff thinks newspapers the only businesses with high operating costs, and that those costs are the responsibility of readers. Hopfinger thought them the cost of doing business. Dispatch.com sought profitability by keeping overhead low and production high. The first, full-time Dispatch.com reporter – Josh Saul, now at Newsweek, started work at the kitchen table in the home of Coyne and Hopfinger.
Dispatch.com’s office, when it finally got an office, was squeezed into the corner of the bottom floor in a hangar at Merrill Field. The new Dispatch.newspaper offices are much nicer, and much of the original Dispatch.com crew is gone.
Coyne got bought out for peanuts on the dollar. I was dismissed for catching Board of Fish member Roland Maw claiming residence in the states of Montana and Alaska at the same time. Hopfinger got thrown under the bus after repeatedly suggesting to Rogoff what needed to be done to make the Dispatch.newspaper financially viable.
He and Rogoff are now locked in a lawsuit so nasty it smells more like a bitter divorce than the breakup of a once productive partnership. She wrote him a promissary note for his remaining interest in Dispatch.com. She’s now refusing to pay saying the note was meant as a gift, not a contract.
But she’s still got her hobby.
She now wants Alaskans to pay more for it now even though they and the rest of America may have been helping to subsidize it all along if Rogoff has been reducing her taxes by spending money on a hobby she calls a business.
Whatever the case, I wish luck to the “we” in Dispatch.newspaper. We – the even bigger we – are at a time in American history when the more people engaged in the public business of gathering and spreading reliable (or even semi-reliable) information is a good thing.