Media

Lost in weeds

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Abandoned newspaper boxes/Craig Medred photo

On the outside, all looks fine for Alaska’s largest news organization. The website ADN.com keeps on keeping on. The commenters still gravitate there en masse to call each other names.  The Alaska Dispatch News newspapers still plop down in thousands of  Anchorage driveways every morning, and some employees tell their friends that all will be good from here on out thanks to the Binkley family of Fairbanks. 

 

But behind the scenes, the story of the collapse of Alice Rogoff’s would-be media empire just keeps getting stranger and stranger.

As 9-11 approaches – the official date on which the Binkley family from Fairbanks and/or others are to submit their offers to buy the Dispatch News out of Chapter 11 bankruptcy, a flurry of filings in federal Bankruptcy Court paint an ever crazier picture of this saga:

  • The court trustee has suggested the company of which Rogoff is now the owner-in-name only is such a train wreck that it might not be salvageable via a Chapter 11 reorganization and should be moved into a Chapter 7 liquidation.
  • Rogoff, who bought the newspaper and website from The McClatchy Company of California for $34 million about three years ago, has filed with the court as a creditor claiming that Alaska Dispatch News LLC, the limited liability corporation she set up to run the newspaper, owes her $8 million. For what isn’t clear.
  • Editor David Hulen, Rogoff’s right-hand man, appears to have lived up to what he once described as his greatest skill: “survivor.” Bankruptcy records reveal that he cut a deal that requires anyone buying the company pick up his contract. Other news employees are unlikley to make out nearly as well.
  • And the Dispatch News’ summary of assets for the bankruptcy court defines what might be its most valuable product at the moment – ADN.com, the elephant in the jungle of Alaska news – as worth nothing.

Big trouble

Overall, the Dispatch News’ accountinng of assets and liabilities filed this week paints a picture of a company deep under water.

It has debts totaling almost $21.5 million and assets of only about $11.9 million – some of which appear inflated. The company claims to own about $2.5 million worth of office furniture, fixtures, computer equipment,  communications equipment and software, plus $4.5 million in “construction in progress.”

What exactly the latter references is hard to tell  given the Dispatch owns no real property. The company’s business offices on C Street are leased. A building on Arctic Boulevard which holds two idle Dispatch presses is leased. And Dispatch has a lease on the part of the GCI building on Northway Drive where the company’s only fully operational press prints the newspaper.

GCI, which bought the old Daily News building from Rogoff when she bought the Daily News from McClatchy, is in the process of trying to evict the newspaper that was supposed to have been out of the building almost two years ago.

The Dispatch does have in its possession about $670,000 worth of newsprint and $2.5 million worth of what is defined as “total newspaper equipment (book value before depreciation).” This equipment would appear to be the presses in the leased building on Arctic. Their actual market value at this time is thought to be significantly below $2.5 million.

And an attorney for the building’s owners, Arctic Partners LLC in Tacoma, Wash., – has said the company now wants the presses out of its building, and the sooner the better.

No Anchorage businesses are known to be shopping for printing presses at this time, and even if they were, any sensible business would try to low-ball a purchase knowing the predicament the Dispatch is in.

The Binkley family from Fairbanks, which loaned the Dispatch News $1 million in an effort to keep it temporarily afloat in hopes that it will prove worth buying for $1 million, has given mixed signals as to whether it would be interested in the presses on Arctic.

Everyone in the printing business seems in agreement the only place for the old Daily News press in the GCI building on Northway is the scrap heap. When Rogoff made the deal to sell GCI that building, she agreed to pay for the removal and cleanup of that press.

Costs of that have been estimated as high as $1.5 million. GCI says it has now made arrangements with Rogoff to ensure she pays for removal. The company refused to provide details, but it would appear to have more than just Rogoff’s signature on a contract.

She has proven much better at signing such agreements than keeping such agreements. GCI is in court trying to evict Dispatch from its Northway building because she violated contractual agreements for paying the rent, and former Dispatch president Tony Hopfinger is suing Rogoff because she refused to abide by a cocktail napkin agreement she drew up with him to avoid running a formal contract agreement past Northrim Bank, her biggest creditor.

Some things worth something

Bankruptcy filings indicate the Dispatch does own three motor vehicles – a car in Bethel and two vans in Anchorage – valued at about $39,000, and a brand-new drone worth $9,324.66. It could probably liquidate those fairly quickly for something near their valuation.

And then there are a bunch domain names for website addresses. Dispatch News’ latest bankruptcy filing lists ownership of more than 100 of these including the well-known ADN.com; NorthernLove.com, a dating website once expected to increase Dispatch News revenue; AkCarFinder.com; and two websites Rogoff wants to take with her after she closes the door on the Dispatch – ArcticNow.com and ShowMeAlaska.com.

ADN.com, NorthernLove, AkCarFinder, ArcticNow and ShowMeAlsaka are specifically listed in the bankruptcy filings as worth zero.

Suzanne Downing, the editor and owner of MustReadAlaska.com, said she isn’t buying that assessment. Downing said she’d willingly pay $1,000 for ADN.com today. The site is the biggest news draw in Alaska.

If the traffic to all other mainstream news sites – KTUU.com, KTVA.com, and newsminer.com plus all the comparatively pipsqueak news and news-like sites such as MustRead, The Midnight Sun, The Anchorage Press, and craigmedred.news – was combined, they all wouldn’t come close to attracting the number of eyeballs that daily turn to ADN.com.

All of which is why Downing says she’d be quick to buy. She’s already snatched up the AlaskaDailyTimes and AnchorageDailyTimes, which harken back to the Anchorage Times, the state’s once most powerful newspaper. It lost one of the country’s last great newspaper wars to the Daily News, which became the Dispatch News, which took an unbelievable tumble.

Dispatch News claims in its bankruptcy filings it had once been in possession of $12.4 million worth of “goodwill” which it depreciated to $8.1 million and which is now gone.

The company is on track to lose a record $8 million this year, and remains deeply in debt to Northrim. Northrim helped Rogoff swing the $34 million deal to buy the News. She paid McClatchy about half of what the Boston Globe, a newspaper seven times bigger than the Daily News, sold for a year earlier.

Dispatch still owes the bank about $10.2 million on what started out as a one-year bridge loan only to be twice renewed.

Northrim, according to the bankruptcy filings, does have a “personal guarantee,” apparently from Rogoff, on the loan to the Dispatch, and records indicate the loan has been co-signed by someone. The documents don’t say who. That could be Rogoff or billionaire husband, David Rubenstein, the co-founder of the Carlyle Group and one of the richest men in the country.

The bank has already stipulated that it has access to funds from a spousal agreement between the long-separated Rogoff-Rubenstein duo. She lives in Anchorage; he lives in New York and Washington, D.C.

He reportedly pays her $5 million per year as part of their contractual agreement. Details of that deal are unknown.

When the Dispatch first went into bankruptcy, there was speculation that Rubenstein might have stopped making the spousal payments, but sources familiar with some of what went on prior to the Dispatch collapse now says it appears Rogoff – who had been losing millions of dollars per year on the newspaper and was on pace to lose a small fortune this year – decided on an easy way to save her money:

Stop spending it to prop up the failing limited liability corporation she started to run the newspaper she managed.

Deep dive

Once she stopped subsidizing the project, the Dispatch went into a steep, nose-down dive from which the bankruptcy trustee has now decided a recovery might be impossible.

The trustee has suggested the company be moved into Chapter 7, which would lead to its liquidation. In Chapter 7, the company’s assets are sold by the trustee and whatever revenues are collected are used to pay creditors as much as possible.

The Dispatch’s biggest creditor at the moment is Rogoff, who contends the company owes her $8,187,281. The documents do not say for what she is owed.

Aside from Rogoff, there appear to be just shy of 170 unsecured creditors owed about $2 million. Many of them are Alaskans. Many of them are small business people, including freelance writers whose work the ADN bought but for which it had yet to atually pay.

Among the other creditors, M&M Wiring Service Inc., the company that wired the building on Arctic for the Dispatch News’ new presses is owed the most, about $491,000. And Roger Weinfurter, the circulation manager at the Dispatch, is owed the least, $10.

Between those extremes are freelance outdoor columnists John Schandelmeier, who is owed $50, and Alli Harvey, who is owed $160. And Bethany Goodrich, the Tongass Policy and Communications Specialist with the Sustainable Southeast Partnership and the Sitka Conservation Society, who is owed $1,000.

Goodrich wrote a story about kelp farming for WeAlaskans, the Dispatch’s Sunday magazine. The story identified her in this way: “Bethany Sonsini Goodrich is a Sitka-based multimedia storyteller living and working across Southeast Alaska.” There was no mention of her connection to an interest group, albeit a well-meaning one.

The Dispatch owes Coul Productions of Yorba Linda, Calif., $12,250. The company helped stage the Best of Alaska Showcase in Anchorage earlier this year. Coul won high praise from Kea Cuaresma, the Dispatch’s director of marketing services, for meeting project revenue goals. But the company never got paid.

Anchorage Conventions Centers is owed $9,395, possibly in connection with the same event. It was held at the Egan Convention Center.

The list of creditors makes for interesting reading for the insights it offers into how the newspaper worked.

The Trustees of Columbia University in New York are owed $25,000. Rogoff promised that money as funding for postgraduate fellowships to send Columbia students to work short stints as Dispatch interns in Alaska. Rogoff is on the Board of Overseers for the Columbia Journalism Review.

Rogoff was a leader in the world of online journalism before becoming a newspaper owner and a biggest loser in the world of print journalism.

But there was one bright spot in the Dispatch filings. The financials show the company increased its gross revenue by about $550,000 between 2015 and 2016. It generated a healthy $22.9 million in 2016.

The problem was that its costs far exceeded that and Rogoff was from the beginning loathe to cut costs.

CORRECTION: This story was corrected on Sept. 4, 2017 to reflect that Alaska Dispatch News hoped NorthernLove.com would make money but had no revenue projection for the dating website.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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