The once planned new headquarters for Alaska’s largest newspaper/Craig Medred photo
On the Friday that The McClatchy Company, one of the country’s biggest news operations, reported a staggering $37.4 million loss for the quarter, The Midnight Sun, an Anchorage blog, publicly revealed that the struggling Alaska newspaper McClatchy sold to Alice Rogoff for $34 million only three years ago is up for sale.
“The long-running rumors and talk about Alaska’s biggest six-day newspaper’s troubled finances appear to be coming to a head, and owner Alice Rogoff could be near to selling the Alaska Dispatch News,” the Sun said in a wholly unattributed report. “Possibly sooner than most people expect, but there’s also doubt about the financial stability of the potential buyer—whoever it is—because whoever takes over the ADN will also take over the loans used to buy the paper from McClatchy. If things work out, expect things to move quickly.”
Margy Johnson, the Dispatch’s executive vice-president, did not return a call asking for comment on Monday.
Rogoff, who was in the tiny community of Halibut Cove for the July 16 birthday of Commissioner of Fish and Game Sam Cotten, was heard to tell some that a sale was then “imminent,” according to sources there.
The Cove has become Rogoff’s second home this summer.
At a July 11 court hearing on a lawsuit AlaskaDispatch.com co-founder Tony Hopfinger has filed against Rogoff, a hearing neither of the main players attended, it was revealed the Alaska Dispatch News was $4 million in the red only a year after Rogoff purchased the then-Anchorage Daily News from McClatchy and changed the name.
Sources familiar with the newspaper’s finances say losses have continued at the rate of $3 to $4 million per year since, and Rogoff has been actively shopping the debt-laden newspaper for months.
She herself appears to personally owe Hopfinger close to $1 million. She signed an agreement written on a restaurant napkin saying she’d pay him $100,000 per year for 10 years. She made one payment and stopped.
Builders by nature, Hopfinger and then-wife Amanda Coyne started Dispatch as an online only news site in their living room in 2008. It struggled until Rogoff, a shopper from the East Coast, came along a year later, liked what she saw, and bought a majority interest in the company.
Her intentions were good. She wanted to further discussion of Alaska public policy, especially Arctic policy, her personal passion. Thanks to the infusion of her money, the drive of Hopfinger and Coyne, and the hard work of a small group of journalists, Dispatch.com flourished.
Along the way, Hopfinger and Rogoff became partners and best friends. That lasted until shortly after the 2014 purchase of the Daily News. By then, Hopfinger and Coyne, who’d worked insane hours from 2008 to 2012 were divorced, and Hopfinger was beginning a new relationship.
Faced with what was clearly going to be a nightmarish struggle with the financial problems of the new business, Hopfinger decided he wanted out and negotiations began for the sale of his interest in Dispatch. The discussions were friendly.
One of the last good times he and Rogoff spent together was at his wedding in Santa Fe in May 2015. Rogoff went out of her way to attend.
Only about a year earlier, she’d handed Hopfinger the napkin contract as a show of good faith. “I agree to pay Tony $100K at end of each calendar year (beginning ’14) for ten years,” it said. It was dated April 18, 2014.
Rogoff’s lawyers now contend the napkin contract is invalid because it only specifies what Hopfinger is to get paid and not what Rogoff was to get in exchange. Hopfinger’s attorneys argue that’s irrelevant because Rogoff was privy to contract negotiations covering all details of a settlement, but didn’t want to sign an official contract because of a covenant on a loan with Northrim Bank.
The bank provided Rogoff what was termed a bridge loan of $13 million to facilitate the purchase of the Daily News, according to filings in the Hopfinger suit. The covenant said she was supposed to get bank approval on financial obligations over $50,000.
She allegedly did the napkin deal with Hopfinger to avoid having to ask the bank for approval. The note, which has already cost her serious money in attorney’s fees and could cost her more, is one among many financial problems she now faces.
Shopping a sale
Various Alaska Regional Native corporations have been approached by Rogoff about a Dispatch purchase, and the names of many wealthy Alaskans have popped up as potential buyers. The names include Bob Gillam, the founder of Anchorage-based McKinley Capital Management which now oversees $7 billion in assets; John Binkley, a Fairbanks businessman who heads the Cruise Lines International Association, has run a couple major Interior tourism businesses, and is a potential candidate for governor, and Jon Rubini, a real-estate developer and Alaska’s wealthiest man, according to the Forbes.
Neither Gillman nor Rubini returned phone calls. Binkley sent an email that dodged the question.
It is unclear if any of them have any real interest in a newspaper given the failing nature of the business in general, although Binkley did make an effort to purchase the Fairbanks Daily News-Miner before its ownership transferred to the non-profit Helen E. Snedden Foundation. Born and reared in Fairbanks, Binkley might have been driven by a desire to play a part in saving the local newspaper, given newspaper businesses are now considered a bad investment.
Media mogul Rupert Murdoch has predicted newspapers will be dead by 2032, and most, like McClatchy, are already struggling to stay afloat. Still, print has in recent years attracted wealthy Americans more interested in news or influence than in profit.
And Rogoff and Rubini, at least, have some history. They had discussions about his acquiring an interest in the Dispatch prior to the McClatchy sale.
Rubini, a former assistant attorney general for the state of Alaska, was the subject of a generally favorable story in the Dispatch on Saturday in which he scoffed at being labeled a real-estate tycoon. The story detailed his company’s effort to diversify from Alaska into Iceland’s booming tourism economy.
Rubini might not be a tycoon, but Forbes calls him and partner Leonard Hyde “real-estate titans” who “avoid high levels of debt, dread talking to the media, don’t like anyone knowing how rich they are and work out of Anchorage, Alaska, with the Chugach Mountains as their office backdrop.”
The Dispatch is debt laden, and the Alaska economy is in nowhere as good shape as that of Iceland. PT Capital Advisors, a subsidiary of the PT Capital private equity firm begun by Rogoff, took its investment capital there. It last fall announced it was buying the Iceland telecommunications company Nova.
PT is managed by Hugh Short, a Rogoff protegé. The current president of PT Capital is Rogoff’s good friend, former Lt. Gov. Mead Treadwell. Rogoff was identified in the ADN’s Rubini story as owning “5 percent of Pt Holding Co. LLC at the time of its initial report in 2013, though her share declined to less than 5 percent subsequently.” The story did not say how much less.
PT has also reportedly been involved in trying to negotiate the sale of Dispatch.
PT traces its roots back to the Platinum Holding Company and Platinum Capital, which Rogoff began formulating in 2012 along with Short and a California friend of her daughters, Joseph Sanberg. All were interested in a platinum mine in the Togiak Wildlife Refuge south of Bethel in Western Alaska.
Rogoff was at the time enthused about the possibility a mine could create jobs in an economically impoverished part of the state. Sanberg was a social activist trying to boost people out of poverty by creating job opportunities. Like Rogoff, whose business connection with Alaska really started with trying to help Alaska Native artists sell their art because she thought they were getting ripped off by art dealers, he was well-intentioned.
And the deal looked good. Seattle-based XS Platinum had purchased the mine for $50 million in 2007, but defaulted on its loans in 2012. Rogoff and her partners thought they could get the mine cheap. Luckily, they didn’t.
The general manager of the mine was in 2013 charged with criminally polluting Platinum/Squirrel Creek with mine waste. He was convicted of three felonies in 2015. By then, PT had moved on and Rogoff was heavily focused on her newest and latest well-intentioned investment, the Anchorage Daily News turned Alaska Dispatch News but unchanged online as ADN.com.
Complicated finances
Though the purchase was reported as a $34 million deal, that price included a valuable piece of real estate, the Anchorage Daily News building on Northway Drive. Part of the bargain with McClatchy hinged on GCI, the Alaska telecommunications company, buying the building. The sale of the building reduced the price of the newspaper and website to $18 or $19 million, but left Rogoff without a printing press.
She did have an agreement with GCI to continue use of the old ADN press in the GCI building for 18 months with options to extend her stay (at ever-increasing rents) if problems arose making it difficult to get a new press running.
She also agreed to remove the old press from the former ADN building and clean up old ink and another chemicals. Some in the newspaper business have estimated cleanup costs could go over $1 million given the hazardous chemicals sometimes involved in printing.
But at this point, no clean up is in sight. The Dispatch continues to print at the GCI building on Northway Drive because the company’s only working press is housed there. How long this will last is unknown. There are reports, which cannot be verified, that GCI is demanding unpaid rent, and wants Rogoff out of its building.
Meanwhile, a new press Rogoff obtained and installed in an old, oilfield service’s warehouse on Arctic Boulevard remains inoperable and caught up in litigation. The electrical company which wired the building has put a lien on the structure and sued the owners, Arctic Partners, because of Rogoff’s non-payment of bills.
M&M is not the only company claiming Dispatch stopped paying its bills earlier this year.
Rogoff is the wife of billionaire David Rubenstein. He is the co-founder of The Carylye Group, one of the worlds largest investment companies. But he and Rogoff are separated, and there have been unconfirmed reports he earlier this year cut off the financial support he had been providing her in Alaska.
Given all these problems, Rogoff – once ecstatic about ownership of the Dispatch News – has reportedly told friends she’s had it with the newspaper business.
Who would take on the operation, however, remains a big question. Among the companies in the newspaper business Rogoff reportedly solicited was Morris Communications, a publisher in Augusta, Ga.
Morris has deep ties to Alaska. Company chairman Billy Morris, the son of the founder, maintains a home in Anchorage and has been involved in Alaska journalism since 1969 when the company bought the Southeast Alaska Empire, now the Juneau Empire.
Morris steadily expanded in Alaska and now owns Alaska magazine; the Alaska Journal of Commerce; the Peninsula Clarion in Kenai; The MILEPOST, the definitive guide to driving the Alaska Highway; the Homer News; the Alaska Star in Eagle River/Chugiak, an Anchorage suburb; and Destination Alaska, a travel guide.
The company maintains an Alaska headquarters in an office building just off Dimond Boulevard in Anchorage. Susie Morris Baker, now the company vice-president, is the former publisher of the Clarion and met her husband in Kenai.
Many in the family are avid anglers, and parents, grandparents, children and grand kids regularly come north to partake of Alaska’s world-class fishing. Billy was a friend of the late Bob Atwood, the publisher of the former Anchorage Times.
The Times was Alaska’s dominant newspaper from World War II into the 1980s. Publishing a newspaper in the Anchorage market has been a dream of Billy since the 1970s.
Too many problems
But Morris officials reportedly took a look at the Dispatch News and concluded it wasn’t worth much, if anything, given Alaska’s struggling economy, a new and still inoperable Dispatch printing plant with myriad problems that could cost more than $1 million to fix, and the Dispatch’s considerable debt.
Dee Dee McKenzie, Alaska group publisher for Morris’s properties, did not return a phone call.
It is unclear how much Rogoff still owes Northrim, but it is conceivable the debt is more than the newspaper is worth. Some of Rogoff’s advisers valued the Daily News worth as little as $7.5 million at the time of the sale.
Daily News circulation plummeted from a peak of near 100,000 on Sundays in the 1990s to less than 35,000 at the time Rogoff bought the paper. She had high hopes of turning around what had been a steady slide in circulation. Some small town American newspapers have been able to build circulation, but the trend in major markets has been a steady decline of 5 to 8 percent per year.
Anchorage is or once was considered a major market. Daily Dispatch circulation is now believed to be below 30,000 and still steadily falling.
ADN.com remains an Alaska online news powerhouse, but the online operation doesn’t begin to generate enough revenue to support the operation’s high overhead and approximately 200 employees.
Whatever happens with the Dispatch going forward, newspaper and web analysts expect serious downsizing.
A sale, a shift to three-day-per-week publication to save money on paper and ink, or simply a shut down would mark a sad end to what was a heralded purchase not that long ago.
“Salmon swallows whale” was how the Seattle PI billed the Dispatch purchase of the Daily News.”
“One of the more fascinating local media experiments in America is playing out in Anchorage, AK, where, last week, the sale of the Anchorage Daily News was finalized,” wrote Sara Morrison at Columbia Journalism Review in May 2014 .
“…The deal does create an exciting opportunity for Alaska media—though not one without risks. If the leaders of the new operation can find a sustainable business model, manage the merger of two newsrooms in an insular media market, and sustain a high level of editorial energy even with one less competitor out there, the state could be better served than ever. But if they stumble, Alaska’s news consumers could be worse off than before.”
Three years, two months on, it looks as if Rogoff has concluded that the sustainable business model is a goal beyond reach. Whether Morrison’s prediction of news consumers “worse off than before” comes true remains to be seen.
(Editor’s note: The author of this story is a former reporter and editor for the Juneau Empire, a Morris publication. He worked at the Anchorage Daily News for more than 25 years. He joined AlaskaDispatch.com in its formative stage. He was once a close personal friend of Rogoff, Hopfinger and others involved in this story and had access to some of the inner workings of the Dispatch. He joined the Alaska Dispatch News after the Daily News sale, but did not last long. He ignored an order to stop investigating Roland Maw, a member of the state Board of Fisheries and a crony of Gov. Bill Walker, a friend of Rogoff’s. His investigation eventually led to the state of Alaska charging Maw, who was claiming to be a resident of both Montana and Alaska, with multiple felonies related to defrauding the Alaska Permanent Fund. Rogoff was unhappy with what she considered the “controversy” the Maw story generated. She and the author subsequently negotiated a quiet departure from the Dispatch intended to help protect the integrity of the news operation.)
CORRECTION: This story was edited on July 26, 2017 to collect a faulty John Binkley link.
Craig, to answer your response to my response to Allen: What I proposed ($10 million offer) was, of course, strictly hypothetical. Interesting that I came up w/ a figure that you say she’d be nuts to refuse. Regarding accounts payable: Wouldn’t everything in there show up on the books? I believe you’re suggesting it would not, that ADN has some hidden debts that might kill any deal. You can be sure that if I ever came up w/ $20 million in spare change and wanted to buy ADN, I’d hire some exceptionally knowledgeable people to be at my side. Meanwhile, based on what you’ve said all along here — and assuming it’s correct — we can’t escape the conclusion that she’s a bungler, or a fool. … Sad!
“Like so many people on the money side in Hollywood, he wanted to go over to the creative side.” That’s Joshua Green talking about Steve Bannon when Bannon ran a “boutique investment bank” in Los Angeles decades ago. (Green is author of the well-received new book “Devil’s Bargain: Steve Bannon, Donald Trump, and the Storming of the Presidency.”) Bannon was born blue-collar but became rich (sort of) and stupendously influential through his restless pluck and shrewd understanding of the political atmosphere, by making hyperbolic films about Ronald Reagan and Sarah Palin and later by running Breitbart News.
Bannon shares with Alice Rogoff (and with Jeff Bezos, Rupert Murdoch, Sheldon Adelson, Michael Bloomberg and too many others to name) the inevitable, totally human desire to use your bank account to own a newspaper (or any digital facsimile) or a movie-production house or some other mass medium, because what you really want to do is set the table for the topics & terms of the conversation that follows — and, who knows, push that conversation toward certain conclusions, eh? (Who was it who said, “Don’t pick a fight with a man who buys his ink by the barrel”?)
Of course Rogoff wanted to own a newspaper. Of course she had grand dreams to set an agenda for Alaska. Who wouldn’t want to nudge (subtly or otherwise) the political machinery toward this or that result. The Arctic is really, truly a new world, so why wouldn’t you want to own the ideas that will discover it, embrace it, open it, welcome it. The only problem with all of this is that, from all accounts I’ve heard, including Craig’s, Rogoff was an incompetent manager. The journalists I know over at ADN work their asses off , but there’s no one really tending the overall shop. I hear there’s no general manager. Is it because Alice is too busy flying around being a baroness of Alaska journalism. I was well disposed to her until I learned, like many of us, that she cut off the paper’s reporters from knowing what transpired between her, Obama and the others who attended last year’s dinner at her house. Gawking at the wealth around Campbell Lake is one thing, but the president and his host owed us the skinny on what went down. That neglect tore the veil off what we thought was Rogoff’s saintly face.
If ADN dies — and a sale to Billy Morris is a death all the same — it will be a miserably sad day for me and many, many others. If only I was rich enough to buy it.
Peter i am curious, if you had enough money you would buy the ADN. What would you be purchasing? I see there is most likely no real property that can be sold.
I think if you had the money. It would be better used to create your own new paper from the ground up, and not get into the plethora of debt, leans, and mismanagement Rogoff has created.
Allen, you’re asking me to leave the realm of fantasy and get acquainted w/ reality. So here goes. If I had, say, $20-$30 million dollars to play with, I might get into some negotiations w/ Ms. Rogoff. I would ask to look at all the books. Assuming what Craig has told us about her debts, about the fiascos of both printers, about all of this — assuming it’s accurate, I’d offer something like — oh hell, this is so arbitrary — say, $10 million for the paper’s name, all its equipment (you’re talking the furniture, electronics, and everything that’s used by those 200 employees in doing their jobs), and the smaller printer. She would be responsible for the big printer (whatever happens to it) and all the debts except for those directly tied to daily operations like payroll, accounts payable, and such. In other words, what I’d be purchasing would be an ongoing process of publishing the paper. That’s no small matter and is the reason for my interest in the first place. But I’d be free of any debt burdens (those go with her) and free of having to deal w/ that massive printer in the GCI (formerly ADN) building. My attention then would be on improving the paper where I felt it could be improved. First order of business — hire a general manager. Then begin the really difficult work of improving the editorial product. No need for details here, but it would probably mean higher standards for writing stories and new ways of getting those stories in front of readers’ eyeballs. … To create a whole new paper from the ground up — that’s a massive undertaking. Why bother to do that if there’s another paper with a history, a name and a means of production already available. Now if Rogoff says no to the deal, then either I want the paper badly enough to make the buy on her terms or I say forget it. Who knows what happens after that? But I think she would come around to my offer or to a similar offer from someone else. Which brings us back to Morris.
Peter: If you offered, $10M she’d be crazy not to take it. The Orange Country Register and Riverside Tribune went for a real value of about $16M last year, and they had a combined circulation of close to 340,000 – at least 10 times the circulation of the ADN. but the bigger problem with ADN is you don’t know the full costs of fixing the new print plant (I’ve been told it’s more like $2 million than +1, and there could be some serious debt lurking out there in accounts payable. i’ve heard some big numbers there i’m simply not going to repeat because i find them hard to believe. but you’ve got the right idea in making it an “asset sale” to purchase the name, equipment and printer, and not a newspaper sale. that was Ms. Rogoff’s first mistake in purchasing the Daily News; she bought the newspaper as an entity which meant taking on responsibility for all employees then working there, taking on workman’s comp debts for employees no longer working due to injury and more. the first thing i would suggest anyone thinking about purchasing do is retain the services of a newspaper broker who knows the ins and outs of newspapers.
Just a though from a business prospective. If you have no real estate to sell, no equipment to sell (stuff of real value) and your clients are no obligated to patronize a business. What is for sale? If a newspaper is needed, what is stopping any of the mentioned prospective buyers from just starting a new paper, with no strings attached from a current miss managed endeavor?
What he says, says it all. Right on point. All ADN publisher has are her staff, some of whom would probably go to a new publisher, and a domain site for her online edition. That might have some value. Her press is inop as is the foundation on which it sits. With her debt and pending lawsuits, a good argument can be made that she has nothing to sell except liabilities. No one wants those without compensating value.
Great job reporting on the challenges facing a storied news organization of immense value and importance to all Alaskans. Here’s hoping that Alice Rogoff continues to navigate tough financial times, or manages to find a new owner with the resources to preserve and build on her efforts.
Who ever ends up with an Anchorage paper will have to have the E version as well as the print version. And there is no guarantee of success in today’s world where print versions are so challenged. Morris Inc is among a very small number of companies who might be able to pull it off. But it will not be easy. There may come a day that some kid will
ask his father “what is a newspaper Dad?” Many of today’s youth do not read newspapers and get their information through social media. They miss out by not getting complete content or have the experience of reading print on news paper while having a morning cup of coffee or tea with their spouse or another special person.
One thing for sure! ADN has to go. The publisher views Alaska through her dark blue sunglasses and fails to recognize she is in a bright red state.
great article Craig, and you thought navigating through fish and game laws and regulations was complicated, this is quite the soap opera.
Well done Craig.
Michael Schoder 907-240-1494 Sent from my iPad
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Life is filled with ironies and inexplicable connections. It would be interesting if Morris wound up as the newspaper voice of Anchorage. Morris’ flagship paper is the Augusta (Georgia) Chronicle, the oldest continuously published newspaper in America. I was born and raised a few miles south of there. Just after the end of the Civil War, the Chronicle was bought by Ambrose Ransom (Rans) Wright. Wright had formerly been Mj. Gen. Wright in the Provisional Army of the Confederate States. He was before The War a successful lawyer and became a Georgia State Senator as well. Mj. Gen. Richard Anderson court-martialed Wright after Gettysburg, but Wright won. Mj. Gen. A. P. Hill wanted to sack him after a particularly unsuccessful attack at Spotsylvania, but General Lee checked the ever aggressive Hill; Lee said to Hill, “General Wright isn’t a general, he’s a lawyer, and what would the people of Georgia think?” Most of my ancestors served in the 48th Georgia, Wright’s Brigade, Anderson’s Division, Hill’s Corps, Lee’s Army of Northern Virginia; most didn’t live to tell the story. Rans Wright was elected to the US Senate after Georgia was restored to the Union but died before he was seated.
In my youth in rural Georgia, the Savannah Morning News was the Republican paper, and while there weren’t a lot of White Republicans in Georgia in those days, you did want to read the ads. The Chronicle was one of the conservative Democrat papers, but you have to understand what a conservative Democrat was in that day and time. The Atlanta Constitution was the voice of the “New South.” Atlanta was the “City too Busy to Hate,” yeah, right. That was the difference in newspapers in those days; there were a lot of them, you know their point of view, and you could choose which one to buy.
Anyway, I got into a battle with the Juneau Education Association over their bargaining position back in the Nineties; it was kinda’ a busman’s holiday. Suzanne Downing was the editor of the Juneau Empire in those days and she finally called me and the JEA and said you each get one more Letter to the Editor. I lost because the NEA can put Lenin’s corpse on any school board in America, but I had fun f*cking with them. Perseverance Theater was giving the Empire Hell because they wanted the Empire to assign a “professional” theater critic to all their performances. Suzanne hired me; we had fun; first check I ever got for writing. Imagine an ideological conservative as the theater critic for a troup that likes to cast Joan of Arc as a beer-swilling lesbian bar maid. We had fun!
I know your concern about journalism, but I think the future of journalism is in the niche markets. I learned to walk in a retail store when the retail stores lined the courthouse square. I watched my father try to compete with the “big boxes” for thirty years or so. It drove him into an ever diminishing niche. He couldn’t compete with WalMart in men’s size 32 – 38 pants, but he could provide the 28 – 31 and the 40 – 46, or more, that you couldn’t buy at WalMart.
Maybe you, Suzanne, I, and people like us should talk about some niche marketing.