First in a series
The story of the rise, the fall and the tragedy of the media empire former Alaska Dispatch News owner Alice Rogoff and company president Tony Hopfinger once envisioned building in the north appears headed toward its final chapter in an Anchorage court room later this month.
Once the best of friends, Hopfinger, the man with the plan, and Rogoff, the woman with the money to make it happen, came together in 2009 with the dream of creating a new, Alaska-based, news portal to the world.
The plan died an ugly death. The duo split. And their courtroom battle now focuses on a cocktail napkin on which Rogoff penned an infamous pledge to pay Hopfinger $1 million for his interest in a business that grew to become the state’s largest news organization.
But the Rogoff-Hopfinger story is bigger than any napkin, wrapped up as it is in an Alaska-size dream and an even bigger, very public business failure.
The latter part of story – which begins with Rogoff’s purchase of the Anchorage Daily News/ADN.com, proceeds through the newspaper’s transformation into the Alaska Dispatch News/ADN.com and ends with the Dispatch News’ death in bankruptcy and resurrection as the Daily News under new owners from Fairbanks with deep Alaska roots – is now well-known to most in the 49th state.
The dream that preceded it less so. What follows is the story the precedes the legal confrontation. It is based on the authors observations as a reporter at Alaska Dispatch from 2010 to 2013; his many discussions with those who worked there; his regular and intimate conversations about the business with Rogoff, Hopfinger and Dispatch co-founder Amanda Coyne during that time; and his relatively short tenure at the Alaska Dispatch News after Rogoff purchased it from the Daily News.
A new model
What the Associated Press (AP) had long done in Alaska on a microscale, Hopfinger and Rogoff envisioned recreating on a macroscale. They had a grand scheme to take over the venerable AP’s role and expand it.
They hoped to turn the Dispatch into the go-to-source other news organizations would be forced to turn to for material when anything of national or global significance happened in the American Arctic, along with a place where surfers on the worldwide web could probe every news nook and cranny of the country’s last frontier.
It was a big vision, a vision of owning Alaska news the way Google owns internet search.
Struggling public radio stations in remote Alaska villages would be tapped for their local news. New Dispatch news bureau’s would be established in regional hubs across the state. Alaska’s ugly problems – the nation’s highest rate of rape, the plague of domestic violence in rural Alaska, the state’s chronic drug and alcohol abuse, and the jobless, ghetto-like plight of some rural communities – would be dragged out into the open while the existential beauty and regenerative power of the state’s unadulterated wilderness were featured and explored.
It all sprang from the tiny dream of AlaskaDispatch.com, the online-only, news website begun by Hopfinger and then-wife Coyne in 2008. They drove themselves hard to make the Dispatch work and along the way killed their marriage.
Rogoff’s marriage was already on life support when she arrived from the nation’s capital in the north to stay in the late 2000s, but that was not a bad thing. The payments that now-former husband David Rubenstein, one of the richest men in the country, was making to her as part of a marital separation agreement served to finance a foray into what she saw as “Arctic journalism” in the 49th state’s largest city.
Anchorage is 370 miles south of the Arctic Circle and enjoys a climate moderated by the waters of Cook Inlet, a long finger of the Pacific Ocean jabbing into Alaska’s urban underbelly. Average January temperatures with a high of 23 degrees and a low of 11 are warmer than those of Minneapolis.
But Anchorage was the only real, U.S. metropolitan area near the region of the globe that had fascinated Rogoff since before her late father, Mortimer, helped pioneer the navigation technology that enabled the ice-reinforced, oil tanker SS Manhattan to in 1962 make the first and only delivery of oil from Alaska’s North Slope to the U.S. East Coast via the Northwest Passage.
She’d spent some of her formative years off the coast of Massachusetts on Nantucket Island, which is historically linked to Arctic Alaska through the long-dead, commercial whaling industry. Once the whaling capital of the world, Nantucket was home to a fleet that followed ever declining whale populations every farther west and north from the 1720s until they ended up off Barrow at the top of the North American continent in the mid- to late-1800s.
Rogoff was familiar with the history. She’d also traveled extensively in far north Alaska and fallen in love with it. She truly wanted to help people there. Wherever she went in rural Alaska, she spent lavishly on Alaska Native art and handicrafts, and eventually helped found the Alaska Native Art Foundation (ANAF) with the idea of helping sell more of the art of rural Alaskans and at higher prices.
As with many of Rogoff’s big ideas, the Foundation ended up a failure after frittering away millions of dollars – state grant monies in this case. Rogoff blamed others for the Foundation’s demise, establishing a pattern that would become a norm.
“I would rather be ashes than dust,” wrote the long-ago author Jack London, the best known northern writer in history and the man who helped immortalize the Klondike Gold Rush. “I would rather that my spark should burn out in a brilliant blaze than it should be stifled by dry-rot.
“I would rather be a superb meteor, every atom of me in magnificent glow, than a sleepy and permanent planet. The function of man is to live, not to exist.”
Modern-day adventurers in the north, Hopfinger, Coyne and Rogoff lived that theme at the Dispatch. Rogoff poured in much of the money Rubenstein sent her, not to mention her sometimes slightly crazy ideas as to what constituted news. Meanwhile, Hopfinger, Coyne and a handful of journalists they recruited attacked the juiciest of Alaska stories.
As a small, online start-up, Dispatch was free from the daily newspaper burden of must-be-covered topics – crime, local government, middling breaking news. It had the liberty to choose the interesting over the “important” and the freedom to skip some of the stories that were for the local newspaper mandatory and often predictable.
By the end of 2010, only two years after Hopfinger and Coyne started Dispatch, the Columbia Journalism Review was describing the website as “a regional reporting powerhouse,” and The McClatchy Company, the California-based owner of the dominant, online ADN.com and the incredible, shrinking Anchorage Daily News, was starting to notice.
Once a small, Sacramento-based newspaper chain with a few other newspapers scattered across the country, McClatchy had purchased the much-bigger Knight-Ridder newspaper corporation in 2006 for a staggering $4.5 billion and quickly began to choke on its catch in a news market steadily shifting from high-profit reporting on paper to low-profit, sometimes no-profit reporting, online.
By October 2011, Patrick Dougherty, the executive editor of the Daily News, was telling a small gathering of journalists and students at his alma mater in Texas that “the paper struggled from the recession and the competitive news market. When he started, the Anchorage Daily News had 104 (newsroom) employees. Today, that number is 34,” as the Baylor (University) Lariat reported.
The numbers as to the ADN shrinkage were accurate, the description of the reasons for the decline less so. Only a year before Dougherty’s speech, the Dispatch would eventually learn, the ADN had turned a profit of $10 million even as it began laying off editorial staff.
In Alaska, the newspaper was in great shape, but back in California, McClatchy wasn’t. For a company that bought the Daily News in 1979 and subsidized it for years to win a newspaper war with the once dominate Anchorage Times, it was Alaska payback time.
McClatchy badly needed newspapers producing hefty profits to keep its sinking corporate ship afloat. The only problem the California company faced in Alaska was the problem newspapers were facing everywhere, the steady erosion of revenue as online news began to push onpaper news to the business sidelines.
From a business standpoint, McClatchy really had no choice but to cut costs in Alaska to maximize profits even if it meant a steady deterioration of the Daily News as a product.
Between 2010 and 2013, the company shrank the ADN to almost nothing in an effort to maintain a healthy profit margin. The downsizing of a once robust newspaper did not go unnoticed in the Anchorage market, and when the newspaper added staff in 2013 with revenues still falling, it was clear one of two things was happening;
Either McClatchy had decided it needed to push back against the growing competition from the upstart Dispatch in a bid to maintain profitability over the long term, or it was sprucing the business up in the hopes of selling it.
By the end of 2013, McClatchy and Rogoff were discussing a sale, and in April 2014, McClatchy announced it planned to sell the ADN to the Rogoff-controlled Alaska Dispatch Publishing for a staggering $34 million.
“The Anchorage Daily News is a profitable newspaper that makes us proud journalistically,” McClatchy President and CEO Pat Talamantes said in a press release. “We weren’t looking to sell the Daily News, but after Alaska Dispatch Publishing approached us, we saw advantages to local ownership in this case and opportunities for consolidation that would strengthen both news organizations.”
What was not reported at the time was that most of those in Rogoff’s inner circle, including Hopfinger, had advised against the purchase as too expensive. Some of those advisers would soon be gone.
A different Rogoff
Rogoff would become a different person as well. At Alaska Dispatch, she almost never meddled in editorial decisions. There was only one exception that stood out.
Rogoff asked to have a story on the stroke history of 62-year-old pilot Theron “Terry” Smith killed. Smith was the man at the controls of a DeHavilland Otter when it crashed into a mountain in remote Southwest Alaska killing iconic former Alaska Sen. Ted Stevens and three others.
In a brief op-ed in the Dispatch not long after the accident, Rogoff described Smith as “my teacher, friend and mentor, as he was to many Alaskans. As every one of his friends would say, Terry was a ‘pilot’s pilot.’ That is high praise. He was enormously intelligent and competent and cared deeply about doing things the right way. He is the reason I live here, fly an airplane and love to visit every village I can get to.
“Terry and his wife, Terri Ellis Smith, were the first people I met when I came to Alaska in 2001. They became my closest friends, the ones I turned to for answers to all the hard questions. They were part of the many subparts of Alaska: Native and non-Native, urban and rural — fine humans who had friends in just about every corner of the state.”
A former chief pilot for Alaska Airlines, Smith lost his pilot’s license after his stroke, but somehow managed to get it back with little fanfare. In many European countries, victims of stroke must undergo fairly strenuous testing before they can even get a license to drive reinstated. A stroke kills parts of the brain, and though the brain has an amazing capacity to rewire itself around such damage, there is no guarantee as to the reliability of those fixes.
Rogoff made a humanitarian plea to spike the story to spare Smith’s widow, and her good friend, the agony of any suggestion her husband’s past medical history might have contributed to the death of Stevens and the others, and a decision was made to kill the story.
The intervention, which came in the form of a request to the author from Rogoff over coffee at her home, was a unique event.
At the Dispatch, Hopfinger had a contract with Rogoff that guaranteed him full editorial control of the news operation. And he was never afraid to point that out to the majority owner of the company.
At the new Dispatch News, this changed. Hopfinger became a minority shareholder in the newspaper operation, the contract went away, and Rogoff began to take a more active role on the editorial side of the newspaper, especially the opinion pages.
Just print it
She was not always happy that editorial page staff demanded that commentary containing information claimed to be factual actually be factual. She sometimes told editors to stop asking questions and just print the commentary, especially if it was written by those in her social circle.
She largely kept her hands off the “news” side of the operation, but her feelings on many issues were well known, and there were those who tried to cater to those feelings.
Meanwhile, she was trying to oversee the business side of the newspaper. It was a job for which she was poorly equipped. She did not favor long hours in the office. Hopfinger repeatedly talked to her about hiring a publisher or general manager to handle the day-to-day business operations of the newspaper.
Names of potential publishers were tossed around a few times, but only one individual – retired Coast Guard Rear Admiral Thomas Ostebo – was ever considered a real possibility for the job. The one-time Coast Guard district commander for Alaska, Ostebo was a former search-and-rescue pilot. That won him the admiration of Rogoff, an avid amateur pilot.
The possibility of his managing the ADN went away when it became known he was likely going to take a job with the Cruise Lines International Association after retirement. Ostebo became the president and CEO of the CLIA in 2015.
By then, Hopfinger had grown disenchanted with Rogoff’s management of the company and simply wanted to move on. He was planning to remarry and was trying to ease out of the job at the ADN and relocate to Chicago where his new wife was taking a job and where his mother was dying of cancer.
He and Rogoff talked repeatedly about his working remotely from Chicago on a new Rogoff project, a website devoted solely to Arctic news. Rogoff told Hopfinger she believed “it would make millions,” he said at the time. He was skeptical.
Climate change has heightened interest in the Arctic, but on a day-to-day basis there aren’t a lot of people searching the internet for news from the Arctic. Starving polar bears traffic well, as do some of the protests of any development in the region, but on an everyday basis, far more people are interested in the antics of B-grade American celebrities than life in the months-long winter darkness of the North Slope.
When Hopfinger expressed the opinion that what was to become “Arctic Now” (later Arctic Today) didn’t look to have a chance of reaching profitability, he said Rogoff told him that if he wasn’t interested in the project she’d find someone else to work on it.
Given that he needed something to do in Chicago, Hopfinger decided to take the project on from there no matter the slim odds of success. Rogoff seemed satisfied with that and with Hopfinger’s departure.
On April 9, only about a month before Rogoff happily attended Hopfinger’s wedding to his new wife in New Mexico, the Dispatch News reported “President and Executive Editor Tony Hopfinger will be stepping down as editor later this month but will remain president of the company…Hopfinger will be moving to Chicago to be near an ill family member. He will regularly travel to Anchorage in his role as president, Rogoff said.”
The statement was partly true, but both Rogoff and Hopfinger knew the move to Chicago was but step one of his departure. Hopfinger had already turned control of the news side of the business over to David Hulen, the managing editor for the Daily News under McClatchy ownership, and the main role Hopfinger had left was trying to help steer Rogoff’s management of the business, which was a near impossible task.
Hopfinger was already hinting to friends his belief the newspaper was doomed. Nationally, the newspaper business was disintegrating so fast that the idea of making any money off repackaging Dispatch News content for Outside markets looked to be a loser. And Rogoff refused to make the spending cuts necessary to stem the financial bleeding at the ADN because she worried downsizing would look bad.
On top of those two significant problems, the newspaper still faced a major new cost to obtain a printing press and print plant. To make the $34 million purchase from McClatchy work, Rogoff sold the building that housed the Anchorage Daily News and its press to GCI, an Anchorage telecom and cable TV company.
Rogoff had a short-term agreement to continue printing at GCI, but the time on that agreement was fast running out. She needed to either build a new printing plant or negotiate a deal for someone else to print the paper as the Binkley Company did after buying the Dispatch News out of bankruptcy last year.
Twice Hopfinger thought he was close to agreements with two different printers on deals to print the ADN. Both times, Rogoff vetoed the plans. She eventually settled on the idea of converting an old, oilfield services warehouse in the industrial section of Anchorage’s Midtown into a printing plant.
It was the last in a string of bad decisions, and the one that finally sank the Dispatch News.
By then, the Rogoff-Hopfinger partnership had ended with Rogoff contending Hopfinger quit and abandoned her, and Hopfinger saying he was fired. That issue is expected to be debated at trial.
Whatever happened, Hopfinger’s departure didn’t alter Rogoff’s belief that if the paper only got bigger and editorially better, in her view, readers would flock to it, circulation would swell, and everything would be fine.
In the face of newspaper trends nationally, that belief could only be described as delusional, but it was the premise on which Rogoff had been operating since the day she bought the Daily News.
Early in her tenure as owner, the situation reached the point where many of the people working for Rogoff became reluctant to tell her how bad the newspapers financial position for fear she’d lash out at them. Hopfinger said it fell on him to be the bearer of bad news, and the situation eventually reached the point where, he told friends, Rogoff’s response to his attempts to explain the newspaper’s losses was met by “if it’s bad news, don’t tell me. I don’t want to hear.”
When he suggested cost cuts as the only path to survival, Rogoff rebuked him with the catch phrase “we can’t cut our way to profitability.”
In March 2016, only about 18 months before Rogoff took the newspaper into bankruptcy and less than a year before she told ADN managers to quit paying some bills because of the newspapers perilous financial situation, she went public with the theme of spending her way into solvency.
In a very strange op-ed with a headline containing an asterisk – “2016 ADN update: To quote Jeff Bezos, we’re in ‘investment mode’*,” Rogoff wrote that “like all news companies, we’re diversifying. But unlike many, we’re driven by more than the bottom line; we aim to connect Alaska, in more and better ways, both around the state and to ever-larger audiences.”
Below that was a footnote linked to the asterisk in the headline:
“* Amazon CEO and Washington Post owner Jeff Bezos used these words recently when addressing staff of The Post. He was distinguishing between operating at a financial loss, versus making a planned choice to invest in future growth.”
Clearly, the investment worked out better for Bezos than Rogoff whose financial losses disintegrated into an unplanned choice to declare bankruptcy and a whole lot of time in court battling over money.
A print supplier; GCI; the company that owned the warehouse where her print plant was to go; the electrical contractor doing the work on the print shop; and a Bankruptcy Court trustee, who questioned her trying to leave creditors holding the bag on about $2 million in debt, have all demanded she pay up on her past promises.
Rogoff has now settled or is settling with most of them.
Now comes her once best-friend and confidant Hopfinger wanting his money. Anchorage attorneys familiar with state contract law are a little amazed the case wasn’t settled out of court long ago.
But then there are aspects to this case that make it look more like a nasty divorce than a dispute over the sale of interest in a business.
Part two: Words on a napkin