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News evolves

anchorage

The mothership for what was once a news dynasty/Anchorage Daily News

In the Age of the Internet, the power of the press – an invisible force that once put fear into politicians – is fading fast in Alaska where the state’s largest newspaper is on the verge of going press-less.

The Alaska Dispatch News/ADN.com – the Anchorage Daily News/ADN.com up until about three years ago and expected to be soon renamed again – will continue to print a newspaper it was revealed Friday, but the paper will be printed on someone else’s printing press.

John Binkley, the father of acting publisher Ryan Binkley, said the Binkley Company LLC is looking to “out source” its printing as it tries to salvage the Alice-Rogoff-owned operation it bought out of the federal Bankruptcy Court for $1 million.

Contract printing is not a new idea for the ADN. Former Dispatch News President Tony Hopfinger negotiated two such deals with two different companies. Rogoff killed both plans in favor of building her own printing plant and proceeded to drive the newspaper into bankruptcy.

The revelation that the Binkley Company will not try to establish its own press comes on the heels of significant downsizing at a newspaper fighting for its life. More than 30 employees look to have been eliminated this week,  including a reported 17 in the editorial department.

The company did not reveal how many, saying only that the cuts were “significant.” But some well-known local names are confirmed to be leaving:

Doyle Woody, who grew up in Anchorage and went on to become a local sports-writing institution; Dermot Cole, a long time reporter for the Fairbanks Daily News-Miner who left that paper to become a columnist for Rogoff’s online-only AlaskaDispatch.com before transitioning to the new ADN; Yereth Rosen, who was the Reuters bureau in Alaska before joining AlaskaDispatch.com and then the ADN; Richard Mauer, the reporter who was at the forefront of the ADN coverage leading to the trial of Sen. Ted Stevens, R-Alaska; Mike Campbell, a one-time associate managing editor at the Anchorage Daily News, turned managing editor at AlaskaDispatch.com, and eventually outdoor and WeAlaskans magazine editor at the Dispatch News; long time ADN photographer Erik Hill; and newspaper designer Pamela Dunlap-Shohl, the wife of former Daily News political cartoonist Peter Dunlap-Shohl who lost his job in 2008 when the downsizing of Anchorage’s newspaper first began.

Economic realities

Reporters at the ADN and Rogoff in a departing commentary have blamed the downsizing on Alaska’s recession, but the staffing level at the ADN after the latest cuts is only slightly smaller than what Rogoff was advised to make it after she bought the Daily News from The McClatchy Company in April 2014.

Why exactly she never made the staff reductions necessary to maintain a viable business might never be known. On the stand and under oath at the bankruptcy hearing, Rogoff testified she never planned for the company to make money in the beginning, but it was never made clear when she planned to try to turn the company profitable.

After merging the online-only Dispatch.com with the Daily News, she repeatedly told company president Tony Hopfinger, the surviving founder of Dispatch.com, that “we can’t cut our way to profitability.”

Instead of reducing staff, she added personnel, making the impacts of what was to come even greater.

“When I bought the Anchorage Daily News in 2014,” she wrote in a final column published by the Dispatch News, “Alaska was as full of promise, as I was. Oil was at $120, our state’s budgets were growing and prosperity was in the air.”

The facts are that there were warnings of an oil glut as early as December 2013, months before the sale, and Alaska oil was not at $120. Alaska North Slope crude opened the year at $104.98 and closed it at $55.48.

State spending had peaked in 2013 and was already starting down by 2014, and by April  of that year, as the Daily News sale was announced, economist Bill Connerly was already warning the state of trouble ahead given the global outlook for oil.

Despite all that, Rogoff’s new business turned a slight profit in 2014. The next year , her first full year of her ownership, she lost $5.8 million – $3.8 million of it cash out of her own pocket, her bankruptcy attorney and friend Cabot Christianson told the bankruptcy court.

The newspaper’s 2015 loss was more than Rogoff spent over the course of the five years it took to build AlaskaDispatch.com from a struggling blog into a news website that brought McClatchy to the bargaining table.

Despite the staggering Dispatch News losses, Rogoff told Hopfinger to quit suggesting budget cuts.  He didn’t and by the end of the year, Hopfinger was gone. He and Rogoff are now locked in a nasty lawsuit over $1 million she promised to pay him to buy out his interest in Dispatch.com. 

After Hopfinger left,  losses at the ADN increased to $6 million – $4 million of it in cash – in 2016 and were on track to reach $8 million this year, according to Christianson.

By August, the company was losing so much money the Binkleys had to loan it $1 million so it could make payroll, cover employee insurance payments, and pay for paper and ink.

By the time that happened, the only words to describe the condition of the state’s largest newspaper were “train wreck.”

Why?

The Binkley bail out has raised a lot of questions.

The Binkley Company is equally owned by Ryan, Wade and James Binkley of Fairbanks and Kai Binkley Sims of Eagle River. They are the children of John, a former state lawmaker and one-time candidate for governor, and his wife Judy.

Mentioned as a potential Republican candidate for Alaska governor again in 2018, John has been regularly in attendance at ongoing bankruptcy hearings, but describes his only role in the newly formed Binkley Company as “proud father.”

Many have asked why the Binkleys, who have no history in the newspaper business, bought the state’s largest news organization. The answers have been amorphous, leaning toward the hard to pin down idea of “doing the right thing.”

Some of those who know the Binkleys well in their hometown of Fairbanks, where they run a hugely successful tourism business, said they get the feeling the Binkley kids were getting a little bored with the old family business and wanted a new challenge.

“We’re riverboat gamblers,” Ryan joked earlier this month. 

The comment was a throwback to the history of a four-generation, Alaska family that traces its roots back to the Klondike Gold Rush of 1898. Charles M. Binkley came over the Chilkoot Pass with other stampeders headed for Dawson City, but it wasn’t to mine gold.

He saw an opportunity in the steamship business on the big rivers of Central Alaska, and the family has been in the sternwheeler business ever since, first hauling freight on the Yukon and Tanana rivers and then tourists on the Chena River in Fairbanks. 

If the newest generation of Binkleys was looking for an adventure on the order of great-grandfather Charles, they have clearly found it in trying to save a newspaper deep underwater in a period when newspapers are struggling everywhere.

Rogoff’s Folly

Rogoff bought the Daily News for $34 million from California-based McClatchy.  The price was steep, and in order to make the deal work, she sold the California company’s Anchorage publishing plant to GCI, a telecom and cable company, for $15 million. 

The massive, two-story, 129,826-square-foot building that took up most of a city block was a monument to Alaska journalism when built not far north of downtown in 1985. A state-of-the-art facility, it was constructed with a look toward a future where McClatchy expected to be printing more than 100,000 newspapers per day in Anchorage.

The company met with incredible success in the late 1980s into the early 2000s. Under the leadership of publisher Jerry Grilly, now assisting the Binkleys, the Daily News engaged the long-dominate Anchorage Times in a full on newspaper war and by 1992 the Times, which legendary publisher Bob Atwood had sold to an oil field service’s company in 1989, was out of business.

For the next 20 years, the Daily News and the ADN.com website it spawned in 1994, dominated Alaska news. The Anchorage monopoly gave McClatchy a “license to print money” as the owners of monopoly newspapers in major U.S. cities used to joke.

By the year 2000, the Daily News was a $55 million per year business with a daily newspaper circulation of about 72,000 newspapers, according to filings with the U.S. Securities and Exchange Commission. 

It would still be sending $10 million per year in profits to McClatchy in Sacramento eight years later as newspapers suffered under the first of what were to be many costly challenges from online news, and ADN layoffs began.

More staff cuts followed in 2009, and again in 2010 as newspaper circulation skidded toward 50,000 daily.

By 2011, then Daily News editor Pat Dougherty was explaining to a Baylor University class back in his old home state of Texas how he’d cut the editorial staff of the ADN from 104 to 34. 

By 2014, when Rogoff bought the Daily News, the newspaper’s circulation was less than half of what it was in 2000 and so too revenues. Bankruptcy records this year show a $55 million per year business to now be a $20 million per year business.

At bankruptcy, Rogoff testified she thought the Dispatch News/ADN still might be worth up to $4 million, but the Binkleys got it for $1 million when no one else bid.

Good buy?

The biggest task the Binkleys face is right sizing the newspaper to the revenues. How to do that and still maintain the online news production that made ADN.com Alaska’s news powerhouse is the big question.

At this time, the ADN staff appears to be back to near the number of 2011. The newspaper was struggling then and began adding staff to stay ahead of Rogoff’s upstart, online-only Dispatch.com.

Dispatch.com is now ancient history, but the ADN still faces competition from mainstream TV and radio news sites such as KTUU.com, KTVA.com and Alaska Public Media, plus weekly newspapers such as the Alaska Journal of Commerce and The Anchorage Press operating online daily; independent online sites with a blend of news and advocacy such as Must Read Alaska and The Midnight Sun; and suburban papers in Eagle River and the Matanuska-Susitna Valley pecking away at the edges of Dispatch News circulation area.

On top of that, some in the industry have questioned whether the Binkleys cut deep enough to solve the newspaper’s financial problems.

John said he hopes the company doesn’t need to cut any more, but no one knows for certain what might happen going forward.

Rogoff is now gone from the newspaper scene, but not out of the picture. Bankruptcy Judge Gerald Spraker at a hearing Friday slowed a plan to move to liquidating old Dispatch News assets, such as the printing press in a building on Arctic Boulevard that the newspaper never managed to get into operation.

The Binkleys gave up on trying to turn the Arctic facility into a newspaper printing plant. GCI, meanwhile, has told the Binkleys it wants the old ADN press out of its building. Rogoff promised to get the press out within 18 months of the 2014 sale, but failed because of delays in getting a new press up and running.

The paper is still being printed at GCI, but that arrangement is not expected to last much longer. Meanwhile, GCI – now joined by some of the creditors Rogoff created with the Dispatch bankruptcy filing – is in state court trying to pierce what it calls her “corporate veil.”

The argument in state court is that the Alaska Dispatch Publishing LLC (limited liability company) of which Rogoff was the sole shareholder, plus a host of other LLCs in Rogoff’s name, are nothing but fronts for Alice Rogoff Inc., and because that is the case Rogoff herself should be responsible for the debts of the bankrupt Dispatch.

In court Friday, Spraker alluded to the “potential causes arising under state law” and how they “may lead to recovery or the possibilities of recovery” for Rogoff’s creditors. Christianson, Rogoff’s attorney and friend, did not look happy when the judge made those observations.

CORRECTION: An early version of the story had Judy Binkley’s name wrong.

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8 replies »

  1. Outsourcing of the printing by the Binkleys is likely a smart business move (depending on the contract with the printer and how easily they can exit the contract). It will likely give the Binkleys the option to quickly pull the plug on the printed part of the business, if they have to, and go on-line only. But on the flip side, if ADN becomes on-line only – would businesses pay as much for on-line ads as they do for printed ads? I’m guessing probably not. And if ADN charges high rates for their proprietary on-line ads, Anchorage businesses will probably migrate to cheaper Google ad options instead.

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    • You seem to be a little sensitive on this subject…lol….I get it. Glad to see that the editorial staff was reduced a bit. So who will be the new ADN conservative opinion columnist?

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  2. Yesterday KTVA reported “The case moved from Chapter 11 to Chapter 7…”

    So does that classification change the way the state and federal cases are intertwined?

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