Media

Binkleys buy ADN

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At the end, the woman who long professed a desire to change Alaska journalism for the better cut a pathetic figure as she scurried away from the federal Bankruptcy Court in downtown Anchorage on Monday with a lone television cameraman in pursuit.

Atop the concrete steps of the historic Old Federal Building behind her, Fairbanks’ Ryan Binkley was holding court before a phalanx of journalists to explain his families’ high hopes for the news organization newly purchased for $1 million.

Only a little more than three years earlier, Alice Rogoff, the woman in the oversize wool coat now fleeing for her Porsche SUV, had paid $34 million for the Anchorage Daily News in order to merge it with the online-only Alaska Dispatch.com into which she had poured more than $3 million over the course of five years.

She had visions of creating an Alaska media empire.

“Many of you know the ownership of the paper changed hands in early May when I bought it from the California-based McClatchy newspaper chain and announced that I’d be combining my Alaska Dispatch staff with the employees of the Anchorage Daily News,” she wrote in July 2014. “Since then, you may have noticed we have more Alaska news every day. That is no accident, as our mission is focused on expanding news coverage, both in Anchorage and across the state.

“We aim to supply you with more information and many perspectives — not tell you what to think. Just as important is for you to become a voice in our state and share your thoughts with others. We encourage you to share your own opinions and to write letters and comments. The livelier and smarter the debate becomes, the more people will participate in it. We need that for our civic society to function as well as it should.”

She had a big dream.

It died an ugly and public death.

Rogoff, the estranged wife of billionaire David Rubenstein, possessed the sort of wealth that made her a friend to everyone until the money ran out. When she left the bankruptcy court, the people who had seemed always with her – Rogoff personal attorney Bill Bittner, bankruptcy attorney and old friend Cabot Christianson, sidekick and ADN vice-president Margy Johnson – were nowhere to be found.

Rogoff was a lonely, defeated figure hurrying to get away, a woman in her 60s with a heavy shoulder bag now on the run. And the Binkleys were a family wondering what they’d done.

Patriarch John Binkley, a one-time candidate for governor, admitted he felt a little like the dog that had chased a truck only to realize it had caught its quarry.

Now what?

Bankruptcy Court Judge Gary Spraker confessed in court the he had to “bite my tongue” to keep  from asking the Binkleys’ how they plan to resurrect a newspaper without a printing press that is bleeding money at the rate of $500,000 per month.

He was quick to add “that is not my concern.”

As a bankruptcy judge, he explained, his job was more triage than rehabilitation. The court sought to obtain “optimal value under the circumstance,” Spraker said, emphasizing the circumstance:

“The debtor was running out of money….there is no more money. There is no more time.”

The Unsecured Creditors Committee wanting to get creditors something out of the collapse of the ADN had hoped another buyer for the state’s largest newspaper might show up to engage the Binkleys in a bidding war.

It didn’t happen.

Sans another bidder, UCC attorney Micheal Mills asked the judge to raise the price the Binkleys would be required to pay or give the UCC time to get an appraisal on the value of the paper.

Given that another payroll cycle is approaching, Spraker concluded that wasn’t realistic. He weighed the possible collapse of the ADN, which would put more than 200 people out of work, against the $2 million owed about 180 ADN creditors, and moved to protect the jobs.

“I wish there was more time,” he said, “but we take it as we see it.”

He expressed the “firm conviction this is the best thing we can do at this time.”

All indications were that Bob Kaufman, an Anchorage businessman assisting Rogoff in trying to sell her company, had made a good faith effort to market ADN to other buyers only to come up empty, Spraker said.

“There was a nibble,” the judge added in a pitch-perfect Alaska analogy, “but they couldn’t set the hook.”

Bad days for newspapers

 

Kaufman took the stand in bankruptcy court to paint a grim portrait of the state of the old media in the U.S. today.

His first effort to market the ADN, he said, was to approach a newspaper broker who handles about half of the country’s newspaper sales.

“He wasn’t interested,” Kaufman said. Kaufman asked for advice. He was given the names of some people, who might – just might – be interested in buying a distressed newspaper.

Eventually, Kaufman rounded up a handful of potential buyers, none of whom were named in court.

The first spent a week in Alaska, and left. Another came up from Chicago for a few days, Kaufman said. The most recent spent a couple of days. Another spent 10 days before saying it “found (the ADN) to be extraordinarily risky,” Kaufman said.

The reasons, he added, are obvious: A 10 percent per year revenue decline at newspapers in general; a state suffering through its worse recession in 30 years; and a newspaper with no press, which is sort like being a taxi business with no taxis.

Kaufman said the ADN’s latest looker – a group which appears to have been affiliated with the Glacier Media Group out of Vancouver, British Columbia, Canada – explored the idea of contracting out the printing for the ADN and concluded “you will never make money.”

That buyer, Kaufman said, “ultimately concluded he was not comfortable.”

The ADN under Rogoff, Kaufman noted, is a company that bought a $600,000 press it has “spent millions trying to get to work. The value is not in the assets.

“This is not a company that owns a beautiful office building….there is way more cost than value” in the assets.

No one in the court room was surprised to hear that after earlier listening to Rogoff explain her long history of subsidizing ADN.

A love affair

That Rogoff poured an astonishing amount of money into the ADN over the course of her ownership is undisputed.

Her bankruptcy court filings claim she is owed about $12.8 million as a creditor. She still owes Northrim Bank about $10 million on the loan that helped her buy the newspaper and website. She invested about $6 million of her own – or husband Rubenstein’s money – in the original purchase.

All told she appears to have spent close to $30 million – maybe more – in her slightly over three years-plus ownership of the ADN. As late as June of last year, she was describing the newspaper as in “investment mode.”

“….Like so many of you, (we) believe that a smarter, more diversified business sector will lead us to a healthy and different next chapter in our state’s development,” she wrote in June 2016. “So we’re continuing to develop new lines of business— new features that provide value to you, our readers: For stimulating tourism, we’re launching ShowMeAlaska.net, a new resource for Alaska travelers from in-state, Outside and around the world ; for Alaskans, a new and improved AKCarFinder.com, providing comprehensive dealer listings from around the state; and, yes, even a dating site, NorthernLove.net.”

ShowMe never really got off the ground. NorthernLove never made much money. But the ADN advertising department did manage to increase revenue by about a half million dollars or so between 2015 and 2016, according to court records.

It remained a company bringing in about $20 million per year in revenue when Rogoff decided early this year she had to get out and quit propping up the business she professed to love.

Why is still not clear.

When asked in court Monday specifically why she stopped subsidizing the ADN, she said, “I simply had no further ability.”

No further questions were asked. No details were given. Outside the courthouse Rogoff’s only comments to reporters were “no comment.”

Her sole source of support is $5 million per year that comes from Rubenstein per a “spousal agreement,” according to sources with knowledge of her finances.

What happened to that arrangement to diminish her benevolence toward Alaska journalism is not known. Various theories have been offered by those in the know:

  • The projected $8 million loss for Dispatch in 2017 was simply more than her income.
  • Rubenstein somehow cut off the payments.
  • Northrim Bank, noting the dire financial problems of the ADN and the publicly unknown end date on the spousal aagreement, started to take bigger bites out of Rogoff’s income. The bank has revealed the Rubenstein payments, the size of which it did not specify, passed through a Northrim account.

Whatever Rogoff’s financial difficulties, she testified she began trying to pedal the company early in the year and “got a vague, generic statement of interest from one” potential buyer. Billie Morris, the owner Alaska Magazine and the Alaska Journal of Commerce, was reported to have offered $1 for the ADN.

“I had not put a price on the company,” Rogoff said, “(but) we believed there was value in the company. It would have been a very small percentage of revenue….We did not have any particular number.”

Pressed on that subject, she said the thinking was the company might have been worth up to $4 million – $30 million less than she paid – but “that would be high.”

Whatever the estimated value, it didn’t matter because Rogoff couldn’t find a buyer, although it should be noted that she didn’t start off trying to sell all of the ADN. Most of her early efforts, according to potential buyers, were aimed at selling the Alaska Dispatch News newspaper with Rogoff hoping to keep the ADN.com website.

No one would touch that deal in a world rapidly moving from words on-paper to words online.

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Ryan Binkley meets the press/Craig Medred photo

The save

Rogoff said she talked to the Binkleys about buying ADN early in the year, but like the other discussions that one went nowhere.

By early August, however, the news organization was in serious trouble. It was months behind in its payment of health insurance premiums – a legal violation that had been reported to the authorities – and GCI – the telecom and cable company which owned the building holding ADN’s only working printing press – was dunning the news operation for money.

Then, in early August, GCI went into state court to ask a judge to evict ADN from the GCI building and order it to pay $1.4 million in overdue rent, penalties and electric bills for the ADN printing press. 

It was then Rogoff turned to the Binkleys for help. They loaned her $1 million in early August to keep the ADN afloat and offered buy ADN by paying themselves back the $1 million.

As of Monday, the $1 million loan was largely spent.

It will be “totally absorbed by this week,” Ryan Binkley testified when he took the stand in court on Monday.

Binkley attorney Erik LeRoy then walked him through a discussion of all the “snakes in the grass” the Binkley Company LLC, of which Ryan is the managing partner, had discovered in trying to sort out the ADN’s massive financial problems.

Rent is due GCI on Tuesday, Ryan said, and $350,000 in payroll needs to be met next week although ADN has almost no cash on hand. The suggestion to Spraker was obvious but unstated:

The ADN was going to fold unless it was sold to someone with enough capital to keep it afloat.

How much that will eventually cost the Binkleys is an unknown. Ryan said anticipated costs vary “depending on the location of the printing.” The Binkleys are still working on ideas for how to print the paper.

“We don’t have a plan yet,” he said.

“We are trying to sort out the printing,” which he described as “job 1-A.” As he spoke, his father and sister Kai Binkley Sims watched intently from the front row of court. The Binkley Company, Ryan said, might be interested in buying one of the ADN presses.

Which one is undecided. The others could eventually end up with the Bankruptcy Court to be auctioned off to help pay some of the debt owed creditors, but their value is so small they wouldn’t pay much.

And Northrim has claimed first position on any debt as a secured creditor, a position the Unsecured Creditors Committee is challenging.

For the Binkleys, though, that is now all in the rearview mirror. They’re position going forward is clear. The job is to salvage the state’s largest news organization. Some wonder if that can be done.

Christianson – Rogoff’s bankruptcy attorney – said the purchase agreement requires the Binkley group to take on about $2 million in liabilities, including up to about $600,000 in severance payments to ADN employees who lose their jobs and aren’t rehired.

Everyone in the news business who has looked at the ADN has said costs need to be cut dramatically. Estimates on required personnel downsizing have ranged from 30 percent to 50 percent.

Erik LeRoy, the bankruptcy attorney for the Binkleys, confessed there are those who think anyone buying the ADN is irrational.

“I’m representing three irrational Fairbanksans who thinking they’re doing the right thing,” he added. He confessed that the Binkleys might be doing the same as Rogoff once did, but he was confident they could do it better and make it work.

Ryan had a simpler explanation.

“We’re riverboat gamblers,” he said.

The Binkleys started building their family fortune hauling tourists on tours of the Chena River in Fairbanks on the Riverboat Discovery, a classic sternwheeler.  They later diversified into other tourism businesses. 

Over the years, they have succeeded as bottomline businessmen in a sometimes inhospitable corner of the 49th state. Winter temperatures in Fairbanks sometimes drop to 55 degrees below zero. Or colder

It takes a special breed to survive there for generations.

 

 

 

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30 replies »

  1. I always thought she was up to making the newspaper into a propaganda machine. She used her “pull” to control her business. why not? What did the ruling elite have to lose? They could fund it, let it tank and nothing happens. Now this transpired and it looks as if she just tanked a newspaper company. Very nice. Pure speculation as I do not have what it takes to make my theory, fact.

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  2. The key is the press. If they can get either one running, they can make money if they cut costs.
    $20M with bad management is still $20M. If the paper can bring in that kind of cash, it has a future. Cutting the staff will save a bundle and to be honest, that much staff with that little print run and content…can easily be done. Binkleys will have a tough time for awhile, but if they have the cash to keep it afloat and are frugal with their funds, it will succeed. They brought back Grilly who certainly can do a number on the numbers.

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    • exactly. $20M is a good revenue stream. i suspect it’s down a little due to the loss of some commercial printing, but even at, say, $18M, that’s a lot of money. if they cut costs and maintain reasonable productivity, they should be able to find a solution here. it all seems to hinge on figuring out how to print a paper, or get it printed, at a reasonable cost.

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  3. Oh BTW who is this David Hulen dude? My experience with him is he is a lying toadie for Alice (money) or a fascist liberal who denies dissent for political reasons…Am I close?

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    • David Hulen is a nice guy who wants everyone to get along. those are inherently good things that stifle a news organization, maybe any organization. but then again, i admit bias. i’m prejudice to a broad range of views, and i like people who tell me what they think without trying to whitewash it.

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  4. You know, If Alice paid the unsecured creditors and the New ADN (NADN) fired its entire opinion-column lineup with the possible exception of Charles because he is so adorably liberal and a good writer to boot. (Dermot, Elise, Shannyn, Paul, John H.,Clem, the exit door is just past the payroll desk)……this would actually become a positive outcome!

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  5. Alice needs a mere $5 million to pay down the Northrim loan and pay off the unsecured creditors. Oh yeah she is personally on the hook for the press removal too . She can easily afford it. I could settle this in a heartbeat. Money is like water to Rogoff/Rubenstein.

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  6. I just had a thought about how the unsecured creditors can get paid. Put negative publicity out into the media to force an embarrassing situation for Rubenstein. Can’t we get Drudge to reprint a great story by Craig or Suzanne.” How the Billionaires Wife Screwed Alaskans for Chump Change”.

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  7. What was Alice’s driving motivation for something she paid such little attention? A Guggenheim-like extraction of resources? A political quest to educate the masses and win an election for Hillary? Turn Alaska from red to blue? A Romney Republican? Money is power and power corrupts as they say.

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  8. Posted two comments on Alice Rogoffs ADN article. I very civily questioned how she could say she didn’t direct the content of ADN, it was all the editors and the ADN was “old school” Alaskan with regard to political views. Poof, Poof. Comments initially approved, but then removed. Apparently her lieutenants at ADN didn’t get the memo that they don’t work for her anymore. Still insulating her from critique, as usual, by deleting comments from unwashed deplorables. Still making sure Google has no record of public discontent with her. Bizarre.

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  9. “Pressed on that subject, she said the thinking was the company might have been worth up to $4 million – $30 million less than she paid – but ‘that would be high.’ ”

    Isn’t it more accurate to say she paid approximately $19 million for the ADN since the sale of the building to GCI for $15 million was part of what made the deal work?

    Bottom line: She paid too much, immediately sold the one thing that held substantial value, and then mismanaged pretty much everything (except for the actual newsroom, for which she can probably thank Hulen and staff.) Wasn’t she the Chief Financial Officer for U.S. News & World Report for over a decade? How does someone with that past experience and a relationship with one of the most financially shrewd people in the world mismanage something so catastrophically?

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    • Barry: i think it reflects the Alice of Dispatch.com and not the Alice of ADN. i think it was too sympathetic and should have taken a closer look at “Alaska House,” a business failure, and the “Alaska Native Arts Foundation,” which would end up being another Alice failure – the latter costing the state about $6 million as best i can tell.
      i also think it was an accurate report at the time of what Alice Rogoff wanted to be, but it was clearly more of her vision of what she wanted to be than what she was and certainly had no hint of what she was to become once she gained the power of the ADN.
      what can i say? she was a friend. i didn’t look at her with the brutally cold, hard eyes i usually look at everything. maybe that’s why i don’t make many friends. but then again, she wasn’t what she became and in many ways still isn’t. there aren’t many people who come from where Alice came from who are happy to roll their sleeping bag out in a grungy cabin in rural Alaska, express thanks for someone allowing them to use whatever shelter available, and crawl into that bag without any whining at all.
      that said, a lot changed after she bought ADN. Dispatch.comm was run by Tony Hopfinger, who had a contract with Alice that cut her off from any editorial control whatsoever. she quite regularly offered advice and ideas on stories, and he and i and a couple others regularly told her “no,” usually for the reason that her story ideas were totally off the wall. but sometimes for the reason that she appeared to be pushing some sort of agenda.
      at ADN, Hopfinger’s contract went away, and Alice got herself a nicer editor,and she started running things. she wanted that power. she refused to hire a publisher or general manager to run ADN. she started spending a lot of time whispering in the ears of some of the Alaska ruling class.
      and almost everything changed from the Alice of Dispatch.
      i’d say the ADN coverage of President Barack Obama’s dinner at Alice’s house pretty well summarizes it. there is simply no way the old Dispatch would have stood for the dismissive nonsense of that being a “non-political event…Rogoff, who has been acquainted with the president for several years, described it as a private dinner featuring an Alaska-grown menu. She did not disclose who attended the dinner or how many guests were invited.”
      at the old Dispatch, there would have been a riot over that sort of whitewashing of coverage with Hopfinger, Jill Burke and others leading it.
      it’s the POTUS. everything he does touches on politics.
      and there’s no way, in my opinion, that Kay Fanning or even Bob Atwood would have allowed their newspapers to let a dinner with the president be recorded in history with three paragraphs of pablum. Fanning’s ADN would have covered the dinner like the news story it was. Atwood’s Anchorage Times i’m less sure of but of the opinion the late Bill Tobin would have likely been at the table and later written about it in his AT column because he was a compulsive reporter: https://archives.consortiumlibrary.org/collections/specialcollections/hmc-1054/

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      • Thanks for the response, Craig. I’ve always wondered if you were assigned to write that piece by Alice or someone else?

        Also, the fourth to last graf: “An Anchorage businesswoman suggested that maybe it would be easier to team up with Hopfinger and Coyne, who were already operating Alaska Dispatch. A meeting was arranged. Soon, Rogoff was making a big investment.” I assume that the “Anchorage businesswoman” was your wife, Robbie Graham, because a DeMarban story at the time referenced it with that detail.

        Did you make the choice to not identify the “Anchorage businesswoman” as your wife or did an editor? It was just odd for me when I read both stories within the same 24-hour period.

        When in 2014 did your wife come on board at ADN as executive vice president of Alaska Publishing LLC? Your footnotes on your past with the paper never acknowledged that connection. I’m curious why you haven’t addressed that on here?

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      • I totally agree. I was baffled and angry that the ADN refused to cover the Obama dinner. It was a huge deal and she was the publisher of the biggest media entity in our State and she would not allow any coverage. I still want to know who was at the dinner! If you know, can you divulge it finally? My guesses: Gov Bill Walker, Lt. Gov Mallot, Ethan Berkowitz, Katherine Gottlieb and her husband, Heather Kendall Miller and her husband, etc. Basically, liberal political leaders, some Native leaders and prominent Alaskan Jews.

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  10. Speaking of that crook you exposed, what ever happened to Mr. Maw in the Alaska Court system? Did he ever get his case heard in court, or did the second attempt die under the cover of darkness?

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    • Good Question about Maw. His trial is now scheduled for November with a trial call the Friday before it is supposed to start. Am pretty sure that Walker would like to see it go away as it is a reminder of his embarrassment when he initially took office. This is the perfect case to provide an example for others who might consider cheating in their PFD applications. These are very difficult cases to prove. When a good one comes along it should be show cased. We need pressure on the AG’s office and some publicity would help. I have a feeling that Grilly will be in the loop soon.

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  11. So the lawyer who got $50K recently declared those who are owed over 2 million won’t get a dime. The Binkleys get the whole $hit $how for one million, Alaska gets a newspaper for awhile longer. Justice it seems, is as fickle and empty as Alice’s dreams.

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    • justice is almost never perfect in real life, only in movies. the judged weighed a bunch of creditors suffering in the rear view mirror against a bunch of employees in front of the windshield and tried to save as many of those ahead as he could. it’s all sad on many levels.

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      • John Melloncamp said it well in his 1983 hit “Crumbling walls”

        Some people ain’t no damn good
        You can’t trust ’em, you can’t love em
        No good deed goes unpunished
        And I don’t mind being their whipping boy
        I’ve had that pleasure for years and years
        No, no I never was a sinner-tell me what else can I do
        Second best is what you get-till you learn to bend this rules
        Time respects no person-what you lift up must fall
        They’re waiting outside-to claim my crumblin’ walls

        Saw my picture in the paper
        Read the news around my face
        And now some people
        Don’t want to treat me the same

        When the walls come tumblin’ down
        When the walls come crumblin’ crumblin’
        When the walls come tumblin’ tumblin’ down

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  12. It seems like emotion won out over math with the Binkleys. They say Alaska needs the “institution” of the ADN. Actually, nobody needs an “institution” if it makes no financial sense. Sorry Binkleys. Time to bend over. This is gonna hurt real bad.

    Probably an entertaining and bittersweet day for you Craig. Seeing the woman that fired you, for exposing the truth about a crook that was her friend, run off with her tail between her legs. Oh well, at least she still has her bush pilot career she can fall back on.

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