Two more former top editors of the Anchorage Daily News (ADN) are now in court battling to get their former bosses to pay them more than $1.7 million dollars they are owed.
The last chief editor to leave the state’s largest newspaper, Tony Hopfinger, made headlines when he sued then publisher Alice Rogoff for $1 million for reneging on her napkin-written promise to pay him $1 million for helping her wrest ownership of the newspaper from The McClatchy Company.
A one time Washington, D.C. socialite who left billionaire husband David Rubenstein (now ex-) to pursue a love affair with Alaska, Rogoff had a dream of taking over and dominating journalism in the 49th state. Instead she managed to run a once profitable newspaper into the dirt and was forced to file for bankruptcy.
And now the California-based McClatchy, which once had a dream of becoming one of America’s biggest names in national news, is itself in bankruptcy, and a long list of the company’s former top executives say they want the money the company promised them.
Among those filing claims are former editor Pat Dougherty from Anchorage, who says he is owned almost $220,000, and former editor Howard Weaver from Sacramento who has staked a claim for $1.5 million from an executive retirement plan McClatchy Company set up to reward its top managers.
These are tough times for one-time news bigwigs.
Weaver is a legendary Alaska newsman who grew up in Anchorage and eventually helped lead the ADN to two Pulitzer Prizes in the days when newspapers competed aggressively for those awards. He then rose through the ranks of McClatchy to become the company’s director of news operations.
“As Vice President, News at The McClatchy Co. I was the chief editorial officer of what became the country’s third-largest newspaper company, with 31 daily titles and more than 50 weeklies all operating alongside a growing digital news operation at McClatchy Interactive,” his bio says. “The papers won numerous awards – including additional Pulitzers – and saw considerable competitive success during my tenure.”
Unfortunately, the company did not see the same amount of financial success.
A big loss
McClatchy’s bankruptcy will not leave Weaver pensionless. The executive retirement plan, as he informed former Daily News staffers worried about the loss of pensions as McClatchy stumbled toward bankruptcy earlier this year, was in addition to the regular, federally insured retirement plan covering all McClatchy employees.
But $1.5 million is a lot of loot to lose from the reward promised Weaver for guiding McClatchy into the digital age.
Years before Hopfinger and now ex-wife Amanda Coyne started the online news organization Alaska Dispatch on the way to building a relationship with Rogoff that ultimately led to her purchase of the ADN, Weaver was helping lead McClatchy into the brave new world of online news.
He was the key player in the company’s news operation when it in 2006 agreed to purchase Knight Ridder Inc., a news organization more than twice McClatchy’s size, for $4.5 billion in cash and stock. McClatchy at the same time assumed responsibility for about $2 billion in Knight-Ridder debts.
Some newspaper analysts questioned the financial viability of the deal, but Weaver saw great opportunities.
“Think about what a talent pool has been assembled,” he told Rick Edmonds of the Poynter organization at the time. “Someone has to prove that quality, independent journalism should be at the heart of the enterprise, and we intend to be the one to do it.”
“People are leaving the print product and moving online,” he said. “And the problem with that is that a newspaper makes — for every dollar that it makes in a — with a print reader, it’s making only about 30 cents from that online reader in ad revenue.
“It’s just not a very good ad delivery system at this point. That may change. The economics of the business may change. They may be able to start charging subscribers for online content, something the industry is not able to do right now.
“But you have a problem with advertisers who are disappearing, classified advertising, which is going away from the newspaper business, and then the migration of readers online to a less profitable delivery platform.”
Despite those problems on the horizon, McClatchy charged ahead anyway with Weaver helping guide company president Gary Pruitt. Weaver was at the time considered something of an internet-news guru.
After leading the ADN newsroom through a better than decade long war to put the once-dominant Anchorage Times out of business in the 49th state, Weaver left Anchorage for Sacramento – the headquarters for McClatchy – in 1995 to advise senior corporate management on a digital publishing strategy when online news was still all new.
Good ‘talent,’ bad game plan
Online was where McClatchy planned to grow its fortune in the new millennium and though there were those like Rosenstiel questioning whether that was realistic, there were others who – like Weaver – believed there were opportunities in the tubes.
“People “see that circulation has been in decline for – since the late 1980s,” industry analyst John Morton told PBS in that Knight-Ridder interview. “That’s true. What they don’t recognize is that it’s not just circulation that determines whether a newspaper is financially successful.
“For example…most of the doom and gloom is because of the internet. People say people are flocking to the internet and leaving newspapers behind. Well, where are they going on the internet? Most of them are going to newspaper websites. You go to almost any town, and the second-largest audience delivered to advertisers in…almost any city is the newspaper’s website, second only to the newspaper.”
The trick then, as it remains to this day, was in how to monetize the web traffic in a competition-filled market. Newspapers early on overlooked competition in the form of online TV news – print journalists having historically looked down on TV as shallow – and the ease with which low-budget news operations could get into business on the internet.
Hopfinger and Coyne started Alaska Dispatch at their kitchen table with a vision of a new model for a new sort of news organization made more efficient by reducing overhead to almost nothing, the polar opposite of high-overhead newspaper printing operations.
With financial backing from Rogoff, they grew that operation big enough to threaten the profitability of the Daily News and push McClatchy to the bargaining table in Alaska. Rogoff promptly abandoned the Hopfinger-Coyne model in her lust for immediate market dominance.
She in 2014 paid $34 million – two or three times what Alaska’s largest newspaper was estimated to be worth – for the ADN over the objections of top advisers and Hopfinger, who then put on a happy face and publicly muttered an echo of Weaver from eight years earlier.
“This is a chance for us to get even more reporters on the ground and do more journalism,” Hopfinger said.
Privately, he told Rogoff she had no choice but to cut staff and reduce overhead if her new vision of the ADN, renamed the Alaska Dispatch News, was going to survive. Rogoff’s answer, offered publicly, was to proclaim that “to quote Jeff Bezos, we’re in ‘investment mode’*.
“*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.”
Sixteen months after Rogoff penned those words, the Dispatch News filed for bankruptcy with an attorney for Rogoff claiming she’d squandered almost $17 million of her own money over the course of less than three years trying to grow the ADN into a successful business.
McClatchy hung on for much longer than Rogoff though it was clear within a year of the Knight-Ridder deal that the California dream was in danger of becoming a major California disaster.
Only two years after the sale, Weaver was on his McClatchy vice-president’s blog writing about “the troubles” – the general topic being, as the ADN described it, “the company’s current financial problems, which recently led to the laying off and buying out of 10 percent of the company’s workforce, about 1,400 people, including 10 journalists at the Daily News.”
The ADN that year made about $10 million in profit which it sent to McClatchy headquarters while the Alaska reporting staff was led to believe that the ADN was losing money. They were so convinced that their newspaper was in financial trouble that when the publisher told them such was not the case, some refused to believe him.
But then the size of the Alaska profit was not disclosed at the time, nor was the perfectly legitimate reason for the layoffs honestly explained. The ADN was at the time a McClatchy cash cow and the company needed to continue to maximize the profits flowing from its successful operations if it was to have any hope of surviving.
Weaver at the time pushed back against “the mistaken impression that The Present Troubles arise primarily from strategic or management mistakes.
“…While everybody would agree it’s good to avoid ‘crushing debt,’ as (commenter) Anon526 reminds us, the definition of ‘crushing’ has changed dramatically since McClatchy bought Knight Ridder just two years ago. The price we paid was a bargain by any historical measure, the papers we bought and kept have actually outperformed the Classic McClatchy titles since the purchase, and the debt was easily manageable with the projected, relatively conservative forecast of cash flow at that time of about $800 million for the newly configured company.
“Today’s McClatchy is more diversified geographically and economically and stronger on the internet. Our total audience is growing. Our journalism is strong and mission-centered.
“We have challenges, but we will overcome them. I agree with you that not every newspaper company will get across the bridge. But as I offered here before, if anybody wants to put his money where his mouth is and bet against McClatchy, I’m easy to find.”
More McClatchy layoffs were on the horizon, and Weaver – a man accustomed to being revered for his writing skills and editing smarts – was finding himself facing increasingly hostile newsrooms at McClatchy newspapers across the country.
When he went to visit the News & Observer in Raliegh, N.C., he got roasted for staying in a posh hotel.
“…As employees lose their jobs….N&O staff cites executive vice-president Howard Weaver’s stay at the ultra-luxurious Umstead Hotel during his April visit as a prime example of management’s inconsideration,” Raliegh Downtowner magazine reported in 2008. “Former N&O journalist G.D. Gearino noted the irony of belt-tightening
measures being implemented at McClatchy newspapers while their
executives travel in style.”
So Weaver quit and went blogging.
Brave News World
As a blogger, he might have been among the first to recognize journalism’s slide toward the post-truth world of today.
When discussing facts at journalism conferences, he wrote in 2012, “I took as my starting point a brilliant headline from The Onion, which said, ‘One in five Americans now believes Obama is a cactus.’
“Clay Shirky, in characteristically sweeping and insightful style, today weighs in on roughly the same subject with a different (though not contradictory) tack. One of his conclusions? This isn’t such a bad thing.
“The headline on the Poynter Institute excerpt reads ‘We are indeed less willing to agree on what constitutes truth’ He’s right about that, and it changes things.
“For 40 years, I played ‘you-bet-your-career’ on roughly these assumptions: that verified information is more valuable than rumors, opinions or speculation; that broad debate yields better results than narrowed discussion; and that an open mind is more productive than a closed one.
“Playing by the rules of the time, I won big. I had a satisfying and, I’d argue, productive career.
“But as Shirky makes clear, whether we like it or not, the old rules have been irrevocably altered.”
Weaver didn’t specifically say he was abandoning the old rules, but his blogging – and more especially his Tweeting on a near Trumpian scale – in the years since has become increasily partisan as the media – like American society – has steadily fractured into the tribes of the left and of the right.
“The state of journalism today,” Weaver argued in 2012, “is a classic example of what physicists call a phase transition, the transformation of a system from one state to another. In physics that’s defined by turbulence, uncertainty and chaos, a place where ‘complexity is maximal.’ Sure sounds like the news business to me.
“The good news is that phase transitions lead to something new. It doesn’t matter that you didn’t want to change from ice to water, or from water to gaseous steam. Change you will, though you’ll still be H2O.”
Yes, words will still be words as well. Weaver earned his living being good with them. Now he largely appears to devote them to a Twitter stream that runs counter to that of President Donald Trump and is, ironically, part of the social media landscape which put his old employer out of business and left it trying to avoid paying him what he’d earned.
One can only wish Weaver the luck of Hopfinger in the courts. Hopfinger eventually won his $1 million suit against Rogoff though how much she finally paid him to avoid spending additional hundreds of thosuands of dollars appealling the jury verdict in his favor remains unknown.
The final settlement between the parties was sealed.