Sunday, January 22, 2017

Chapter 1: The lead up

The newspaper industry has been in decline for over a decade. In 2012 alone, print advertising revenue for newspapers fell 8.5 percent. For every $16 in print ad revenue lost, there's only $1 in digital revenue to replace it, according to the Pew Research Center. And from 2014 to 2015, advertising revenue declined a further 8 percent. 

In short, digital advertising "does not come close to covering the print ad losses," Pew concluded.

And The Colorado Springs Gazette has been affected just as much as any other newspaper.

"The breadth and the scope of the coverage of the paper is dramatically different from what it was even 30 years ago," former Gazette editor Jeff Thomas told me. "In the glory days, at one time, The Gazette was a $60 million a year business, just in terms of top line revenue."

Thomas, who worked at The Gazette from 1988 until he was laid off in December 2011, estimated that in his last year at the paper, revenue had shrunk to $20 million-$30 million, or "certainly less than half the top line (advertising) revenue."

"Thirty years ago, The Gazette was in the first few years of a major investment campaign. They deliberately grew their news operation aggressively," Thomas recalled. "We had a projects team, we had a projects editor. We had columnists in every section. Not only in sports, where they still do, but metro had different columnists most days of the week. Lifestyle, too, had columnists. So you just sort of contrast that with what you have today. Just by function of resources alone, you can't help but pronounce the news coverage of The Gazette today as dramatically diminished."

Starting about a decade ago, Thomas said, the longtime owners of The Gazette, the Hoiles family, began divesting from the paper.

"They leveraged themselves to the hundreds of millions of dollars, and bought out the shares of the family that wanted out. Most of the family was stuck with hundreds of millions in debt, and then the bottom caved," Thomas said.

The paper went through two rounds of bankruptcy, Thomas said, and "by the time the second round was done, the family was out. They basically had to walk away from all of their holdings in order to forgive the debt. So the family lost it all in all of that."

The owner at that point, a private equity fund, retained the name Freedom Communications. But newsroom layoffs had become almost an annual event every December, Thomas said, starting at the latest in 2005.

"I remember having this discussion (with the executive editor at the time), 'This is the first time we're going to have to remove someone from a position they are currently occupying,'" Thomas said. "It's difficult to count (the layoffs) as rounds, because it was more like a steady drip."

It has been precisely this entire industry downturn - thanks largely to the Internet - that is allowing Philip Anschutz and other wealthy individuals to snap up newspapers at rock-bottom prices. The result has been increasingly difficult times for traditional journalists who want to make a career out of telling stories, performing watchdog government journalism, and ideally serving the public in a time-honored fashion.

But the turbulent financial history and steadily declining revenues - of both The Gazette and the newspaper industry writ large - set the stage for what happened next.

Over the summer of 2012, Freedom Communications was purchased by 2100 Trust, LLC, a private company led by CEO Aaron Kushner. Many observers, including Thomas, believe Kushner bought The Gazette solely because he wanted The Orange County Register, which Freedom also owned.

Regardless of Kushner's motives, he sold The Gazette to Clarity Media in November 2012, just months after he purchased it.

To the reporters and editors at The Gazette, Anschutz appeared as a savior.

Reporter Daniel Chacon was hired at The Gazette in 2009, after the closing of The Rocky Mountain News in Denver. Chacon watched a number of rounds of layoffs during his time at The Gazette, before the purchase by Clarity three years later. It was an incredibly painful experience for those who lost their jobs, as well as for newsroom survivors.

"One of the most vivid incidents I remember is when the staff had already been shrunk down, and (human resources staffers were) going to people and just kind of tapping them on the back. And you just kind of looked around, like, you didn't know if you were going to be next," Chacon recalled.

"It was almost like a feeling of euphoria when Anschutz bought the paper, because all of a sudden, you knew you had stability," Chacon said. "You don't have to worry about people being laid off, more and more and more cuts. Finally, it was just like, we're on solid footing. And when they announced that Joe (Hight) was coming, it was like, 'Oh, this is a perfect combination,' because you have someone leading the paper who's a solid newsman, and you have Anschutz, who has very deep pockets."

Hight, a longtime editor at The Oklahoman (which Anschutz purchased in 2011), was famed for his part in covering the Oklahoma City bombing in 1995, and had a reputation as a solid journalist. He was even inducted into the Oklahoma Journalism Hall of Fame in 2013. That reputation preceded his entrance into The Gazette, and gave staffers like Chacon hope that things were really turning around.

Former Gazette business editor Barbara Cotter, who worked at the paper from 1988 to 2015, agreed with Chacon about the newsroom atmosphere that November, when the sale to Clarity was announced to Gazette staff.

"When Anschutz bought the paper that year, there was great hope. They talked about beefing up the paper and the staff. It felt good," Cotter said. "A new editor was brought in to replace one that had not been very popular. The hope was so high, and it's been hard to see what's happened. I feel like it's being run not as a product to produce great journalism as it is to convey a message, or to sort of control the message in a way."

Everyone I knew at The Gazette believed at the time that Anschutz's entrance signaled an end to the seemingly continuous cycle of layoffs and cuts, and that the paper had a billionaire benefactor who wouldn't care as much about the financial bottom line.

While Kushner owned The Gazette, perhaps the change he made that had the longest impact was when he installed his friend, Dan Steever, as the publisher (Kushner and Steever worked together at Marian Health Greeting Cards in Massachusetts). When Clarity bought the paper from Kushner's 2100 Trust LLC, Anschutz - despite the fact that Steever had no background in journalism - kept Steever as publisher.

"Steever was the only person (among Gazette executives) who survived the purchase (by Clarity). Why do you suppose that is?" asked Barry Noreen, a former editor and columnist at The Gazette, who retired at the end of 2013 but continued working occasionally at the paper on a fill-in basis until early 2015.

"I think it's because (Steever) doesn't know anything about newspapers, and Anschutz doesn't care to have anyone in that position who knows anything about newspapers," Noreen said. "What he's looking for in that position is somebody who's not very discriminating about the dark holes into which he'll place his tongue, and that's the chief quality - if you want to call it that - that they're looking for."

Before becoming publisher of The Gazette in 2012 - a post he still holds to this day - most of Steever's career was spent in marketing. He also spent six years as the head of the aforementioned Massachusetts greeting card company, working with Kushner. But he has zero journalism credentials.

Don't take my word for it. Steever himself admitted during a 2014 speech in downtown Colorado Springs that, until his appointment by Kushner, his knowledge of the newspaper industry extended to delivering papers as a kid (he starts talking about his own background at about the five minute mark in the linked video, and then jokes about his lack of journalistic knowledge at about six minutes).

That may be an amusing anecdote to Steever, but it wasn't funny to those of us who watched him at work as The Gazette's publisher.

"They got someone from the greeting card industry, because they don't care if that person knows anything about newspapers," Noreen said of Steever. "That's not really what they were looking for. They're looking for someone who will salute the underpants as they're going up the flagpole, without any reluctance or hesitation."

Perhaps it was because of this ignorance on Steever's part that he became a tool, used by Anschutz, McKibben, and their cronies to dismantle much of The Gazette's journalistic credibility and independence between 2013 and 2016. At least, that's how it appeared to many of us from inside the newsroom.

An early sign of the troubles to come happened in mid-2012, during a meeting between Steever, Chacon, and a few of the editors at the time, before Anschutz bought the paper. According to Chacon, his warning bells went off when Steever said during the meeting that it was the paper's job to be "an advocate for the city."

"At one point, Steever says that we are supposed to be an 'advocate for the city,'" Chacon recalled. "And the meeting continued. But when he said that, that we're supposed to be advocates, I was like, 'Whoa, whoa, whoa. What is he talking about? We're not advocates for the city.'"

Chacon, a 20-year veteran of the news business, earned his journalistic chops at the Santa Fe New Mexican and the Albuquerque Journal. In 2001, he moved to the San Diego Union-Tribune, and stayed until 2005 before graduating to the now-defunct Rocky Mountain News, where he worked until it closed in 2009. In both of those latter jobs, he covered city government, and when the Rocky shut down, he found a home at The Gazette, covering City Hall. (He returned to the New Mexican in September 2013, and is again covering City Hall, and winning awards for his work.)

I can say from firsthand experience that he was and is damn good at watchdog journalism.

That's why Steever's off-hand remark was so disturbing to Chacon. It struck a basic nerve.

"I see my role as providing news to people, and educating them about what's going on, and being a watchdog, but I'm not an advocate for the city," Chacon explained. "I'm not their spokesperson. I'm a reporter who delivers the news to the people. I don't advocate on behalf of anyone. If anything, I'm an advocate for the people, not the city."

"I just remember so vividly him saying it, and you kind of expect the editor to say, 'No, no, no,' and the meeting just kind of kept going. And then I had to stop the discussion, because it struck me as such an odd thing to say."

Despite Chacon's objections, however, he said Steever simply brushed it off and kept going with the meeting. Perhaps it was Steever's marketing background kicking in, combined with his ignorance of how journalism works. I have no idea, since Steever has declined to reply to any of my inquiries.

And while this in and of itself may not constitute a serious break from the traditional role of local journalists, it was a harbinger of things to come. Because this is just the beginning of the story.

Worth noting here as well is that The Gazette was not Anschutz's first nor his last foray into media ownership. As far back as 2004, Anschutz purchased Journal Newspapers Inc., the parent company of the Washington Examiner. By that point, he already owned the San Francisco Examiner, The Washington Post reported at the time.

Also in 2004, Anschutz founded Clarity Media Group, and former Denver Post president and publisher Ryan McKibben (who is now chairman of The Gazette) was brought on to run the company. In 2009, Anschutz bought The Weekly Standard, a longtime right-leaning publication.

In 2011, the Anschutz Corp. purchased The Oklahoman newspaper in Oklahoma City as part of a larger acquisition of the Oklahoma Publishing Company (OPUBCO), which owned The Broadmoor hotel in Colorado Springs and had many other holdings. Then in 2014, the Anschutz Entertainment Group (AEG) bought the "news" site, which lasted until the summer of 2016 before shuttering.

Anschutz's political leanings, however, have never really been in doubt. He's a longtime donor to various conservative political causes, including Republican presidential candidates. In 2009, newspaper analyst John Morton told Politico, "You have to look at what he's doing as partly a reflection of some of his political convictions... It was no accident that it was The Weekly Standard he bought and not The Nation."

And all of these purchases by Anschutz, even back in 2009, have "given him a megaphone for his right-wing views ... that the 130 or so companies he owns have not provided him," Politico reported.

Three years after Politico's report, The Gazette was next in line for the role of megaphone. All of which was made possible by the general decline of the newspaper industry.

Chapter 2 will be published Wednesday morning.

No comments:

Post a Comment