Struggling ADN now faces an employee revolt

Older Alaskans will remember the days when you could drop a quarter or two in one of the news boxes scattered around Alaska’s largest city and grab a copy of the Anchorage Daily News.

Now the boxes are relegated to the dustbin of history, and if you’re connected to the newspaper’s email, the ADN will regularly push you offers to its online news for a fraction of a quarter. On Wednesday, the pitch was “5 months for $5. Unlock unlimited digital access to the Anchorage Daily News and never miss another article.”

On Monday, the tease was “What else can you get for just $1/mo? Save 65%,” which would suggest the “regular” price is about $2.82 per month, which is a rather odd and irrelevant number for something always on offer at a lower “sale” price.

Who’d ever subscribe for more than $1 per month or $5 for five months, which is the same price in a different package, when ADN online is always offering such a deal?

Think about this: A dollar per month works out to about 3.3333 cents per day or an eighth or less of what it cost to read the ADN on paper back in the last millennium. Is there anything else you can buy for less than four pennies these days?

Yes, unfortunately. At the time this was written, the Seattle Times was offering three months of digital access for a penny less per week and pushing that with some deceptive advertising.

“3 months of local news for 99¢,” the Times’ email claimed, though if you read on the actual offer was for “$4.99 per week 99¢, a savings of over 97%. Get full access to seattletimes.com, our mobile apps, Print Replica and more.”

Sadly, the low prices for news say a lot about the news business today.

Legacy media operations aren’t offering these deals because they want to do so. Rock bottom prices are offered because the websites need to attract eyeballs as they struggle to survive.

And now the ADN faces yet another problem. Its newsroom wants to unionize in the apparent belief more juice can be squeezed out of the legacy turnip.

“I have colleagues who have gone without raises for almost 10 years,” Megan Pacer, “a digital audience producer” at the ADN told the Alaska Beacon “I have colleagues who have started families this year and in the past couple years without paid parental leave.

“I have the benefit of living with a partner with whom I can split rent and expenses, but I have colleagues who don’t have that luxury in a city that’s just becoming more and more expensive to live in.”

Tough times

You have to sympathize with Pacer. Journalism has never been a high-paying profession, but it is worse now than ever, which is why most of the smart kids have jumped ship.

According to federal Bureau of Labor Statistics (BLS) numbers, the 291,700 Americans employed as public relations operatives a year ago outnumbered journalists five to one, and the ratio in favor of PR folk is probably even greater today.

Meanwhile, The Medill School of Journalism at Northwestern University reports that “newspapers are continuing to vanish at an average rate of more than two a week. Since 2005, the country has lost almost 2,900 newspapers, including more than 130 confirmed closings or mergers over the past year.

“In addition to losing almost a third of its newspapers, the country has lost almost two-thirds of its newspaper journalists – 43,000 – since 2005.  Most of these journalists were employed by large metro and regional daily newspapers, half of which are owned by the nation’s 10 largest chains. Today, many of the large dailies owned by chains employ less than a fifth of the journalists on staff in 2005. After years of buying newspapers and merging with one another, many of the largest chains paused and began shedding newspapers in 2023 – either closing them or selling them to other chains or local owners.”

Alice Rogoff, who according to city property records still owns a home on Anchorage’s Campbell Lake despite its reported sale, was the first of the “local owners” in Anchorage. She poured millions of dollars into the newspaper trying to make it work before declaring bankruptcy.

The Binkley Company, which bought the ADN out of bankruptcy for $1 million, are the second set of local owners. Though the company is based in Fairbanks, it is Anchorage-connected. One of the founders, Kai Binkley Sims, lives in Eagle River, the city’s biggest suburb. 

So far, the Binkleys have proven better business people than Rogoff. All indications at this time are that the ADN is financially stable, but the Binkleys do not appear to be making much money off the operation and possibly have yet to recover their $1 million investment let alone see a return on it.

As one former ADN reporter who used to oversee another newspaper and understands newspaper finances observed, “(I’m) not sure what (a union) accomplishes. The ringleaders must be too ignorant to see that until the business model gets solved all that magical collective bargaining power of theirs won’t amount to anything other than higher dues.”

Or, possibly,  in the worst-case scenario, it could lead to a decision by the Binkleys to cut their losses and get out of the business. Ryan Binkley, the head of the Binkley Company, was predictably evasive when asked about the newspaper unionization effort and the reasons behind it given talk of a lack of “transparency” along with a desire for better pay.

“Obviously I can’t really talk about it,” he emailed. “It’s a tough situation,” which is a pretty fair description of the business of journalism today in general.

Financial realities

When one-time Washington, D.C. socialite Rogoff, then the wife of billionare David Rubenstein, bought the Daily News from The McClatchy Company in 2014 for the then crazy and now seemingly absurd price of $34 million, part of her thinking was that newspaper advertising revenue would free her from the $1 million or so per year to which she’d been subsidizing the online only Alaska Dispatch.

Rogoff, in her mind, was still living in the golden era of print journalism in Anchorage, which once had two newspapers engaged in a war that pushed their combined daily newspaper circulation to near 100,000 newspapers with Sunday circulation even higher.

California-based McClatchy poured a lot of money into winning that war and succeeded. In 1992, the Anchorage Times, once the flagship newspaper in the state’s largest city, folded and the ADN essentially owned license to print money.

For 20 years, the newspaper and the website it spawned in 1994 dominated Alaska news. By the year 2000, McClatchy was reporting to the U.S. Securities and Exchange Commission that  the Daily News was a $55 million per year business with a daily newspaper circulation of about 72,000 newspapers.

A former publisher said the newspaper was then sending about $10 million per year in profits to McClatchy, but the end was near. By the mid-2000s, profits were declining and in 2008, McClatchy ordered the first of several staff cuts to try to maximize its returns in Alaska.

Less than a year later, almost 20 percent of the staff was laid off, and then publisher Pat Doyle announced “wage reductions for all employees whose compensation exceeds $25,000 annually.”

More cuts would follow. I was, at the time, the outdoor editor at the Daily News and had been employed there for more than two decades. When publisher Mike Sexton left the newspaper in 2007 to be replaced by Doyle, I remember asking Sexton how bad the clearly impending downsizing was going to get and his answer is still hard to forget: “It’s going to get ugly.”

When the 2009 downsizing came, I took a buyout and left in part because the ADN was becoming ever more bureaucrat even as it became smaller and in part because I pretty well knew who was going to lose their job if I didn’t go, and he needed a job more than I did.

By 2011, then ADN executive editor Pat Dougherty would be explaining to Baylor University students how a newsroom that had shrunk from a one-time staff of 102 to 34 would have been in even worse shape if not for former Gov. Sarah Palin.

The Baylor Lariat reported that “the benefits received by covering Palin were mutual as the ‘paper was actually very crucial to the rise of Sarah Palin,’ (Dougherty) said….Palin brought in huge hits on the paper’s website, and today 17 percent of its total revenue is a result of the Internet.”

The internet clicks were helping to keep some reporters employed, but the ADN was still under pressure to cut costs. ADN journalists thankfully received more help when Rogoff decided to buy into the online-only Alaska Dispatch in 2009.

Her infusion of cash allowed co-founders Tony Hopfinger and Amanda Coyne to move into an office in a hangar at Anchorage’s Merrill Field and begin hiring staff. The possibility of competition served to temper McClatchy’s interest in further ADN cuts, especially after the Columbia Journalism Review in 2010 labeled Dispatch “a regional reporting powerhouse.”

As the website began to rack up journalism awards, something that still mattered in those days, and McClatchy struggled with financial losses throughout its national chain of newspapers, the California company started considering a way out of Alaska and couldn’t resist when Rogoff offered way more money than the ADN was worth.

Hubris

I was by then working at Dispatch and was among those who advised her not to buy the newspaper. She was still losing money on Dispatch, in part because she was adding staff as fast as revenues increased, but the overhead for the online operation was low even with the kitchen Rogoff kept stocked with food for the staff and the refrigerator stuffed with free beer.

And the Hopfinger model of an advertising funded, hard-hitting news operation with the smallest possible operating costs looked like it might work. Dispatch was at the time a fun place to be as well, as the ADN had once been, which had a lot to do with Rogoff and the late Howard Weaver, the ADN editor in its heyday, being the best bosses I ever worked for right up until the time they weren’t.

Weaver abandoned the ADN shortly after the Exxon Valdez oil spill began, and the Seattle Times subsequently won the Pulitzer Prize for its coverage of the disaster in the ADN’s backyard. But that’s another story.

This one is about how newspapers went from being so profitable that Weaver got only mildly upset when I chartered a helicopter and spent a big wad of ADN cash to spend any afternoon flying around in the Chugach Mountains with visiting national columnist Dave Barry in the late 1980s (Hey, Weaver had told me to show Barry a good time in Anchorage) to being so strapped for cash they’ll sell you the news for less than 4 cents per day.

Market economies

Why is the product now so cheap? Obviously, as with most things, there are a number of reasons. One of them is that the old journalism, which at least tried to be objective enough to appeal to the masses, has been devalued as it has become more obviously partisan with readers gravitating to entities they think share their political views.

Another is competition.

The ADN on paper was (and still is in its shrunken, two-day per week form) the only newspaper in Anchorage. ADN online, however, competes with Alaska’s News Source, the website of the state’s largest TV news organization; MustReadAlaska, a conservative news source that describes itself as “news of people, politics, policy, culture, and happenings in Alaska; Alaska Public Media, a government-subsidized news organization; the upstart Beacon, funded by the North Caroline-based States Newsroom, and more, not to mention social media and a multitude of government agencies which now cover themselves.

For most of the above “news” organizations, crime reporting in Alaska’s largest city is now relegated to picking up and rewriting, with no value added, the APD News from the Anchorage Police Department or the Daily Dispatches from the State of Alaska produced by the Alaska State Troopers, which anyone can read daily for free.

Court reporting, which was once one of the ADN’s great strengths, died long ago, and what newspapers used to call “community news,” the social goings on of the city and various community gossip, has pretty much been taken over Facebook and NextDoor where various interest groups and neighborhoods can talk among themselves.

But these aren’t the only reasons for pennies cheap news. Advertising also plays a role, because the real money in the news business has always been in the sale of advertising. And to sell advertising to business owners you need to convince them people are looking at the vehicle carrying their advertisements.

The printed newspaper is in this regard an easy sale, which is the reason ADN, which has no printing press, continues to pay Wick Communications to print two editions of the newspaper every week. The ADN needs those papers as advertising vehicles.

Meanwhile, it needs people to subscribe to its online edition to enable it to tell advertisers, “We have X number of subscribers,” which indicates that at least that number of people are seriously interested in looking at ADN online on most days. Why else would they pay for it?

This is the minefield in which the legacy media, which once printed big profits for their owners along with the news, now dances. As a business, journalism has become a tough and cutthroat struggle illustrated by the recent history of the ADN.

Truly recent past

It was only a decade ago that Rogoff paid that now hard-to-believe $34 million to The McClatchy Company thinking she could make money the old-fashioned way by selling lots of newspapers.

A woman without a clue as to how to actually run a business, she promptly expanded the staff of the ADN, which she’d renamed the Alaska Dispatch News; handed out raises to reporters; and began printing fatter newspapers despite the high cost of newsprint.

Her unwillingness to recognize the realities of the business at that time served to put her increasingly at odds with Dispatch cofounder and later ADN executive editor Hopfinger, who did have some idea of how to run a business.

He, in fact, had enough of an idea of how to run a business that he could see what might be coming at the time of the McClatchy sale and famously got Rogoff to promise to pay him $1 million for his interest in the online Dispatch. She would, however, force Hopfinger to go to court to collect.

There her signed and dated, $1 million promise to pay “Tony $100k at end of each calendar year beginning ’14 for 10 years” – written on a cocktail napkin – would become the centerpiece of the lawsuit.

An Anchorage jury eventually told Rogoff to pay up, but by that time she’d already bankrupted the Dispatch News, which was in deep financial trouble by the time Hopfinger jumped ship in early 2016 to get married and settle in Chicago.

By the summer of the next year, Rogoff had the ADN teetering on the edge of the precipice, but Rogoff’s new editor, David Hulen, managed to keep his new boss happy by ensuring no ADN reporters went sniffing around what was developing as the biggest business story in the 49th state.

When the news did start to leak out that the ADN wasn’t paying its bill and appeared to be racing toward bankruptcy, he even had his staff report the newspaper was merely dealing with the sorts of issues that confront all businesses (and some journalists wonder why the general public thinks them untrustworthy).

Not long after that claim, GCI – the state’s biggest communication company – announced that Rogoff was almost $1.4 million behind on the her rent and electric bills and filed suit to evict the ADN from a building owned by McClatchy when Rogoff bought the newspaper. 

To help cover the huge price tag for the Daily News, Rogoff had agreed to sell that building to friend Ron Duncan, GCI’s founder, and then rent back on favorable terms until she could find a new headquarters for the newspaper’s staff and its printing press. Finding accommodations for the former was easy, but Rogoff quickly discovered how difficult and costly it was to get a printing press up and running, a task she never completed.

When GCI went to court, ADN reported it was because the newspaper had “outstayed its welcome at the GCI-owned building,” and that Rogoff was in discussions with potential new owners and investors to “keep Alaska’s largest newspaper alive and robust for the sake of our readers and the community.

“Alaska Dispatch News has leased another site on Arctic Boulevard for its printing operation and bought a used press in the Midwest, but construction at the new press site has fallen behind schedule.