The legal faceoff between former Alaska Dispatch News publisher Alice Rogoff – the one-time Washington, D.C. socialite who plotted to own the media landscape of the 49th state before bankrupting the state’s largest media operation – and former Dispatch editor-in-chief Tony Hopfinger opened in Anchorage on Tuesday with nothing but bad news for journalism.
If there’s anything worse than being known and hated in the media business, it’s being invisible.
Asked for a show of hands from the jury pool in Superior Court Judge Andrew Guidi’s courtroom on how many there knew of Rogoff, Hopfinger or the Dispatch News, only a quarter to a third of the potential jurors raised an arm.
If Rogoff bought the Anchorage Daily News/ADN.com and turned it into the Alaska Dispatch News/ADN.com hoping to buy influence, as some believe, it would appear to have been a bad deal, though probably not as bad the purchase itself.
In April 2014, Rogoff paid $34 million to take the helm of the state’s largest newspaper and by far biggest news website. Under her command, the operation lost $23 million over the course of the next two and a half years.
Lacking the necessary funds to pay paperboys to deliver the product by August of last year, she took the Dispatch News into bankruptcy. At the fire sale that followed, the Binkley Company from Fairbanks ended up buying what was left of the news operation for $1 million.
Oh how the media landscape has shifted in earthquake-prone Anchorage.
The 44-year-old Hopfinger, neatly dressed in suit and tie with his dark hair graying at the temples, and the 67-year-old Rogoff, bespectacled and looking grandmotherly in a sweater with her brown hair pulled back, sat at tables side by side in the Nesbett Courthouse in downtown on Tuesday just across the street from a long-gone journalistic institution – the Anchorage Times.
Forty years ago, almost everyone in Alaska – not just Anchorage – knew the name of Bob Atwood, the Times’ owner and publisher. Atwood was an iconic Alaska figure who bought a local newspaper with 650 subscribers and five employees in the mid-1930s and grew it into an operation with nearly 400 employees printing and distributing almost 50,000 copies by the start of the 1980s, according to Alaska History.org.
The U.S. Census counted only about 400,000 people in the entire state in 1980. There are now almost that many living in the Anchorage Metropolitan Area alone. The reach of the Times by modern standards was nothing short of phenomenal. There seemed to be Anchorage Times boxes outside every house in the state’s largest city.
Today, the circulation of the state’s largest newspaper – renamed the Daily News after the Binkley purchase – is thought to be between 20,000 and 30,000. Once approaching 100,000, it has been in steady decline for a long time.
Rogoff thought if she spent enough money, she could turn the steady drop in circulation and then start selling more newspapers. The scheme didn’t work.
The Dispatch News is now as dead as the Times.
The conservative, evening newspaper led by the man who chaired the Alaska Statehood Committee – the man who helped get Anchorage International Airport (now the Ted Stevens Anchorage International Airport) off the ground and much more – was sold in 1989 in the middle of one of the country’s last great newspaper wars.
The Times would be dead three years later, a victim of the more aggressive and better-funded Anchorage Daily News owned by The McClatchy Company in Sacramento, Calif. One of those who played a role in bringing down the Times was in the audience behind Hopfinger during jury selection.
W.P. “Pat” Dougherty was a former employee of Atwood, who joined the Daily News as the newspaper war was just beginning, and worked his way up through the glory years of victory over the Times and the circulation growth that neared 100,000 on Sundays. He eventually become the ADN vice-president who oversaw its shrinkage as it began to fade before the onslaught of the internet.
By the time the online-only AlaskaDispatch.com bought its bigger competitor and Doughtery was shown the door, the newspaper which was once an Alaska powerhouse was smaller than the Times under Atwood.
Rogoff was the majority owner of Dispatch. Hopfinger and now ex-wife Amanda Coyne were its founders. Coyne was gone by the time Rogoff bought the News and moved it out of the massive 125,000-square-foot palace to publishing McClatchy built on Northway Drive in Anchorage’s Airport Height districts.
A telecom and cable television company – GCI – now owns the building destined to quickly fade away into history as did the Times. The building across from the Nesbett Courthouse is officially today “The Alaska Judiciary Snowden Administrative Office Building.”
It bears no hint of the man who once owned the news business in Alaska in the way Rogoff wanted to own it. Judging from the lack of name recognition in the courtroom, she will fade from memory even faster than Atwood did.
An infamous napkin
But first there’s the little matter of $1 million still connecting Hopfinger and Rogoff to be resolved. Once the best of friends and allies in the news business, they are now locked in a legal dispute that looks emotionally more like a divorce than a business deal.
Simply put, Rogoff promised Hopfinger $1 million for his assistance in helping manuever her into position to buy the ADN. Rogoff, according to friends, is a serious shopper, and the ADN was for her to be the purchase of a lifetime.
She wanted to own the newspaper so bad that she ignored the advice of Hopfinger and others in her inner circle that McClatchy’s asking price was way too high, according to former associates. After the purchase, she ignored the advice of Hopfinger and others to trim costs to get them in line with revenues, they say.
Seeing the handwriting on the wall, Hopfinger decided he wanted out and began negotiations to sell his 5 percent interest in Alaska Dispatch Publishing, the company that bought the ADN. With the purchase having set the market value at $34 million, 5 percent would have been $1.7 million.
Hopfinger, however, offered to sell his shares for $1.3 million “to be paid over five years,” as Guidi summarized in ruling on a pre-court motion. “According to Hopfinger, Rogoff immediately made an oral counter-offer of $1 million plus stock options, which he accepted. He then pressed Rogoff over the next several weeks to memorialize their agreement in writing.”
The problem was there was a problem.
Rogoff, the then-wife (now ex-wife) of billionaire, East Coast, business mogul David Rubenstein, had taken out a $13 million personal loan from Northrim Bank to help buy the ADN, and the bank had her on a short leash. She was under orders not to make any commitments of more than $50,000 a month without Northrim approval.
On April 18, 2014 – as the merger of the operations of the Dispatch News and the Anchorage Daily News was just getting underway – Guidi wrote, there was another meeting between Hopfinger and Rogoff that “culminated in Rogoff writing on a paper napkin, in the presence of her lawyer and Hopfinger, that she would pay Hopfinger $100,000 per year for ten years at the end of each calendar year, starting in 2014.”
Satisfied with a napkin promise that mimicked the way Rogoff bought controlling interest in Alaska Dispatch, Hopfinger continued contract negotiations with Rogoff’s lawyers while they waited for Northrim to lift the contract restriction. Rogoff made the first of 10 promised payments of $100,000. But a formal contract was never completed.
Negotiations continued “until November (2015),” the judge wrote, “when Rogoff emailed Hopfinger, stating that the Northrim loan no longer barred the agreement. As a result, the parties planned a face-to-face meeting on November 30 to finalize the deal, but Rogoff failed to attend the meeting.”
A few days later, Hopfinger and Rogoff had a parking lot confrontation. Rogoff contends Hopfinger quit on her. He says she fired him. Whatever happened in that parking lot, Rogoff concluded that Hopfinger had abandoned her.
The next payment due Hopfinger failed to show, and in June of 2016 Hopfinger filed suit asking for the $900,000 Rogoff owed him for Dispatch, severance pay for his dismissal from the ADN and more.
Rogoff countered that part of her deal with Hopfinger was that he stay in Anchorage for the 10 years to help her run the new ADN, and once he deserted her, all deals were off.
Much of the disintegration of the business is expected to get dissected in court.
The lawyers for Hopinger, Jeffery Robinson, and Rogoff, David Gross, spent Tuesday trying to sort through potential jurors they thought might be most friendly to their case and to develop some rapport with those people.
Robinson told a story about how he once traded a perfectly good 2005 Volvo for a beat-up, 1985 Jeep Waggoner – the so-called “Woody” model – because he’d always wanted to own a Woody.
One of the potential jurors told him it sounded like a bad deal.
“I appreciate that you wouldn’t have done that,” the attorney said, and then queried jurors on whether they understood that the value placed on things is highly subjective and depends to a significant extent on what the buyer is willing to pay.
The question was a clear setup to prime the jury to counter expected Rogoff arguments at trial that she shouldn’t have to pay Hopfinger $1 million because his 5 percent interest in the Dispatch News wasn’t worth that much.
Gross led potential jurors through a confusing litany of questions about what they’d do if they unexpectedly discovered something valuable. It started with a story about his brother being given a box of throwaway coins by a friend only to discover one of the coins was worth $5,000 and evolved into one of the jurors finding cash in a freezer.
Gross’s questions focused on what prospective jurors would do with the discovery of an unexpected profit: Give it back to the original owner unaware of its value or pocket the cash.
The prospective juror who found the money in a freezer he’d been given said he gave the money back and got a reward. Most of the others said their action would depend on whether a friend or a stranger were involved. Several said they’d feel guilty if they kept the money, but might do that.
What Gross was looking for or where he was going with that questioning was unclear, but his “craigslist” question was obvious. It was focused on the need for formal contracts and who would or wouldn’t sell something valuable without drawing up such an agreement.
The scenario started with selling cars but detoured when a member of the jury pool pointed out that to sell a car you have to fill out a title transfer, which is in effect a contract. Discussions of selling antiques, snowmachines and more followed.
Gross has tried to make the case in pretrial filings that Hopfinger isn’t entitled to anything because he and Rogoff never completed a detailed, formally binding contract. The judge earlier rejected that idea and said it was up to a jury decide whether the napkin on which Rogoff scribbled her promise in the presence of her attorney is contract enough.
Gross also queried jurors on how they would feel about selling their craigslist item on time with a series of payments. Most said they wouldn’t do it with a stranger, but might with a friend.
Gross appeared to be trying to prime the jury for the argument that if Hopfinger really expected to get his money, he should have gotten a better agreement in writing from Rogoff before they parted ways.
Gross also asked a few questions about bankruptcy. He wanted to know if any jurors thought it was wrong to use the system if that was warranted. All seemed to agree that was fine, but the necessity of the matter in Rogoff’s case could become an issue at trial.
Rogoff, with financial assistance from her ex-husband, in late September agreed to a Bankruptcy Court plan calling for her to pay about $1.5 million of the $2 million in claims against her company after court documents indicate an attorney working for the bankruptcy trustee began looking into possible fraud.