DFM’s COO Guy Gilmore and president Joseph Fuchs attempt to justify Alden Global Capital’s business practices to Denver Post staff

Here’s a transcript of the meeting between Digital First Media management and employees at the Denver Post on June 19. DFM’s chief operation officer Guy Gilmore and DFM board chair Joseph Fuchs were the main speakers. The meeting took place days after several exiting Denver Post employees announced they are forming a new Denver news website, and it was several months after the “Denver rebellion” garnered headlines and TV news coverage across the nation.

Gilmore was the Pioneer Press president and publisher when he was promoted to DFM’s COO in late 2017. Fuchs has business ties to Randall Smith, co-founder of Alden Global Capital, the hedge fund that owns DFM newspapers. (According to court filings in a recent lawsuit against DFM, Fuchs “previously was the president of Rockfleet Broadcasting, Inc., which (as of 2011) had a management agreement with Smith Management LLC” and “eighty-eight percent of an affiliate of Rockfleet Broadcasting, Inc., Rockfleet Broadcasting, II, LLC, was (as of 2007) owned by Randall D. Smith.” )

Some of the takeaways from this meeting (and similar ones held Wednesday and Thursday in the San Francisco Bay Area and Southern California) were:

  • DFM executives would not say there will be no more layoffs.
  • The only new investment management committed to was paywall technology.
  • The executives said DFM plans to buy up more of other investors’ shares in DFM.
  • Often, the most challenging questions were answered with “I’m sorry I don’t have a better answer than that.
  • The executives implied that DFM papers had reached some sort of financial “plateau,” but would not offer up specifics about future cuts. Considering that layoffs took place this week in Colorado and California, we can assume they aren’t done cutting.
  • The executives acknowledged they’ve been aiming for (and getting) a 15-20 percent profit margin — in line with analyst Ken Doctor’s report that the chain earned 17 percent across all papers last year. DFM says this percentage is a “middle” figure for newspaper companies today, Doctor say’s it’s much higher than average.

Below, then, is a full transcript of the first hour of Denver’s meeting. Employees at a subsequent meeting on Thursday in Southern California said they were told they could not record the meeting and to leave their cell phones behind.

If you click the FACT CHECK BOXES under the text in RED, you’ll see my annotations. And please note, this was a rush transcript, so there are probably more than a few typos.

— Julie Reynolds


Joe Fuchs

JOE FUCHS: Thank you very much. This is clearly the heart and soul of what makes a newspaper — or any media company — go. And given all that’s come down in the last year or so, I thought it would be a very opportune time to stand in front of you and have a discussion. No holds barred, ask whatever you want, I’m trying to [inaudible] or what I think. There’s no total magic for this thing. Make no mistake, there is nobody that wants this business to succeed more than the board. Perhaps ownership, you know, they’re — ownership does not want to lose money, they want to make money, and it’s like a public company. And every quarter counts. However we have gone through a period where, clearly the focus is on the three-to-five year timeline, not every quarter, and what we’re trying to do is have a sustainable and a profitable operation. And I think that we’ve moved a long way towards that, not without pain.

A couple of things that I would want to say, first of all about my self: I was a media analyst on Wall Street for many years, probably, I’ve written thousands of pages on the media business, the newspaper business. I first became involved back in the dark ages, when Gannett became public and I was pretty young, and somebody said, go to work on them, see what this is all about. And it ended up being sort of 20 years of following the, the industry, and becoming involved on an ownership basis, after leaving Wall Street.

One, two — I still own personally a couple of television stations, so, you know I, what I tell those people, is probably different than what I’m gonna tell you — no, not really. This is a very difficult business, technological innovation has created havoc, it has for a number of years, and this morning when talking to some of the other people I was reminded in my mind as I was talking of some of the early days, of walking in o the Knight organization’s brand new building in Miami. It was a gorgeous thing!

And what did you walk into, when you walk into the front door, it’s on Biscayne Bay, I mean, couldn’t have been any nicer. What you walked into was an enormous floor, and it was all the classified advertising department. Alvah Chapman and Jim Knight were over in the back in the corner of the classified advertising department. And that was the first real hit in the head in terms of the economics of the business.

Technology took over the classified section, and we have continued to evolve since then. So what we’re looking at, from the perspective that ownership has — and I guess a board sort of sits between the operations of a company and ownership, and you try and balance all the elements here — is a desire to yes, produce a profit.

This is not a [unintelligible] institution. We don’t produce the kind of profit margin that some of the competitors do, but we are in there to be sort of be in the midrange of what I would call profitability.

Fact Check
Ken Doctor of Harvard’s Nieman Lab has called DFM’s margin a higher than average profit margin, not a “midrange.” But then, we’ll see below what the executives think of Doctor.

The destruction that’s going on within the business is — causes great pain and difficulty in terms of making decisions. And I hope to open it up in this room, but all I can tell you is, if you meet a manager who enjoys doing terminations, you’ve got a bad manager.

And I’d better tell you there’s nobody in this company that I have worked with at the top levels that enjoys what has had to be done. We often make mistakes in terms of strategy, but we’re trying very, very hard to maintain the franchises that exist in every one of the properties, small and large. Because the franchise in a community is what a media company is all about, whether it be newspaper or television, uh that local franchise is everything. And the quality of what we put out, in publication form or any other form that it be — internet, et cetera — is what drives people to buy us, look at our advertising, give us subscription revenues. And so the quality of everything that we do rests on the shoulders of an editorial department.

Having said that, you know, there is a financial obligation, and I don’t care whether it’s the New York Times or the Wall Street Journal or the Washington Post, or everywhere else that you look. What we have done, what we’ve had to do to, quote, “right size” the organization to meet the financial needs of sustainability, in not driving the thing into bankruptcy, is one of those necessities that’s going on everywhere. And I think that we did it, painfully, aggressively. But part of the philosophy was, if you’re going to do something, you take a five-year view and you see exactly what’s happening and you look at the numbers, and you look at the Sears going out of business, the Kmarts, the big retailers, the people that filled the paper with pre-prints, filled the presses with pre-prints — you gotta take the whole operation together and look at it and say, ok, what is the future? How do we sustain ourselves, maintain a reasonable level of profitability, we [inaudible] or hopefully augment the franchise in the community, in structure for the future.

Fact Check
“Right-size” is a euphemism for “downsize.” A relative term, of course — Alden has cut staff at twice the rate of other newspaper chains, and its profit margins are twice those of most chains.

So that we have a business that hopefully in three to five years we’d sit in this room and say, yep, we did a reasonable job. We may have made a few mistakes along the line, but by and large, sustainability, accountability, and a good solid future, in the reality, in the confines of the business as it currently exists, is what our objective is. And so, with that little bit of of whatever that was — I am here really to discuss with you. Take whatever you wanna throw — not a shoe please — but any questions, discussion. This is meant to be a discussion not a speech. So shoot, up front.

Fact Check
Alden’s history and its brochures for prospective investors show they don’t invest in sustainability. As far as accountability, as a privately held firm whose business units are based in Delaware and the Cayman Islands, Alden has a long and well-earned reputation for secrecy.

REPORTER: We understand that classified is long gone and it’s not coming back, and we also understand that a business has to be profitable, including newspapers. But it’s been reported that the Denver Post made 26 million dollars in 2017. We’re negotiating, bargaining for wage increases, both last year and this year have been total flat-out no —

JOE FUCHS: right

REPORTER: We’ve had one raise in the last ten years, a 3 percent raise, meanwhile like you said everything else is going up, and we’re going down because we’re not getting raises. So how can you justify that after —

JOE FUCHS: I remember approving that 3 percent a few years ago. Couple of things — number one, the Denver Post, regardless of what numbers you see or have, is our lowest-margin and lowest-cash-flow industry property. And there’s some of that, that relates to, to history, and it probably goes back to Dean Singleton, and the fight between the [Rocky Mountain] News and the Post and what went there. The CPM rates for advertising are among the lowest, if not the lowest, in our company. All of which says — this is a premium property. No question about it. And it needs to be sustained, in trying to make moves that are there.

Fact Check
The execs never explained in detail why the cash flow is bad in Denver. In addition, they went to great lengths to explain that DFM has a solid line of credit, which should ameliorate some cash flow issues.

The issue of a union and of wage increases is a sensitive and a difficult one. I would say that it’s much easier to handle raises in a non-union shop than it is in a union shop.

REPORTER: Why is that?

JOE FUCHS: Because, the union contracts are difficult, we treat everyone [inaudible].

REPORTER: A union would make it easier, wouldn’t it?

JOE FUCHS: No, more difficult. More difficult, especially when you’re functioning within a competitive — very competitive environment — where, what you wanna do is try and reward excellence and increase productivity — I hate to use that word, productivity, it’s a business word — and I think that, I’m not arguing it, the reality is a reality, and I think that the newspaper business from that point of view has suffered with this issue for many many years. You know as well as I do.

Some of the really bad ones that you fellas may, and ladies, may remember, the Washington Post, where that was a pressroom strike, where they had to helicopter people into the Washington Post and [inaudible] Washington. And the answer is: it is on the table, it is given consideration to.

Fact Check
Not clear what this means. But DFM specifically rejected the NewsGuild’s proposed wage increases for 2017 and 2018, so in fact, nothing is on the table.

We just spent a fair amount of time in Washington, with some of your union people, bargaining on the pension issue. And we are talking about ways to ameliorate that, and we think that are, that has not come to fruition in frankly some of the things that have occurred in the last six months just gave us pause and said, this is the time not to do There was a wage reopener, and we decided that given everything that was there, this was not the time to make a move. [cross-talk] Good, bad or indifferent, go ahead.

Guy Gilmore

GUY GILMORE: You mentioned the profit; it’s worth noting that those numbers that were leaked or, we don’t know where they came from, but — they do not reflect the true cash flow of these businesses, so. We don’t talk about it much because it seems negative, but it’s actually true the Denver Post has the lowest cash flow of any, any of our papers, or any of our clusters, even the small ones, and it’s, there’s a historical reason reason for that, there’s benefits — union benefits, and so on that have a huge bearing on that, but the cash flow is very low here, so. Not, not to negate the paper, but — and some of the people that are bandying those numbers around, know better. Union leadership, in some cases sees the P&Ls [profit and loss statements], the full P&Ls, when they bargain. And so they know that those are just the tip of the iceberg and those aren’t the real numbers. That’s the one thing.

Fact Check
He’s referring to Ken Doctor’s report on DFM’s 2017-18 finances.

On the other thing, on the union bargaining, we were this year, sort of governed by a wage reopener feature, which doesn’t allow us to bargain work rules. And so the decision for us was — my thought was, well, let’s talk about wages, but let’s talk about work rules, and you know kind of match things up, and the — but the provision doesn’t really call for bargaining work rules, and ultimately the decision was, we’re not gonna, you know, we’re not gonna wanna try to bargain work rules and wages together because that’s not really the way this thing’s been designed at this point in time. So those are a couple of details that fit your question.


JOE FUCHS: Don’t, don’t don’t think for a moment we’re not sensitive to both compensation, and oh by the way enormously sensitive to the pain and suffering that goes into termination. It’s awful.

[audience member whispers: “Oh, for fuck’s sake”]

REPORTER: Just two quick things and I’ll give up the floor to my colleagues. On the profitability or the lack of profitability; if the Guild were to put together a committee and you control the setting, can we meet and go over the books with the company?

[long pause]

JOE FUCHS: I think we’d have to think about that. [cross talk] You can understand why that, would be uh — .not the Guild — [cross talk] I mean I spent, I spent a life, as an analyst, trying to get at the books of many companies.

REPORTER: We’ve looked at the books in the past when we were fighting the newspaper war with the Rocky Mountain News, and that helped the Denver Post make decisions, which included — we gave back raises — that’s why, in part, why the Denver Post won the newspaper war and the Rocky Mountain news is no longer here. So we would like to see the books and I’m formally making that request, I’m glad the door’s not been slammed shut on that.

And then the other thing on bargaining wages, we bargained a contract that called for a wage reopener only in 2017 and 2018 and when we bargained that, we bargained that in good faith. And the way it’s been playing out, it doesn’t seem that that good faith is reciprocal. So if you’re looking for more than wages, perhaps that should have been bargained in the initial contract.


REPORTER: And we had the proviso of wage reopeners only and we feel like we should be able to exercise that — we have been exercising it — to I think deaf ears and just an absolute NO. [DFM counsel] Marshall Anstandig was at the table, I’m not sure you were at the table.

GUY GILMORE(?): No. I know he was at the table. I, I’m not trying to be cont — I just, and so that’s how we, that’s how we considered it, we considered it as a wage reopener, and treated it as such.

JOE FUCHS: With a definitive no for this one. Yeah, no yeah. Honest answer: it was a no. For a whole multiplicity of reasons. Nothing is very sacred [?] that’s for sure. Please.

REPORTER: So amid, you know, the layoffs cuts, things like that, buyouts, the last few years, certainly the last six months, nine months, year. The perception here as I’m sure you guys have seen in the media coverage of some of our union efforts is that a lot of this is due to Alden, and their tactics and their business strategy being majority owner. And I’m getting the sense — and correct me if I’m wrong — but I’m getting the sense from you — that that, you, you would say that’s more of a perception than a reality, and I guess — A, tell me if I’m correct in that or not, and B, if if you do believe that’s a perception, then how do you square you know — I mean maybe they’re not the full numbers but the numbers that Ken Doctor reported that the guy addressed — how do you square the profits and the continued viability of this as a business with this extreme and deep cost-cutting, despite the fact that we have risen to challenges, we have continued putting out a good product, meeting page-read numbers, things like that? So you know, again, I guess it’s two parter.

JOE FUCHS: You’re getting to the heart of the issue, you really are. Number one, Alden or any of their peers, doesn’t get involved in something to lose money. So, they don’t put that that way. So, what is an appropriate profitability? You know, that’s a real tough question to ask. I’d say, I said to you before, we compare our numbers with everybody and then some private companies when we can. And we’re sort of in the middle.

Fact Check
This “middle” claim is disputed by Ken Doctor, and is not what DFM former CEO Steve Rossi said in a 2016 email to all employees. “Our revenue performance is at the top of the industry,” Rossi wrote.

REPORTER: Other media or just all different —?

JOE FUCHS: No, no, no, no, no, newspaper — well, you know, some of the different newspapers are in broadcasting, and magazines, but all of the what I would call the print and news media type companies. Number one.

Number two: the perception, that massive amounts of money have been taken out of this business and funneled up to Alden, or to Randy Smith, who is the controlling owner of Alden, and invested in houses in Palm Beach — the houses in Palm Beach are real. The money coming out of this business, MNG, not true.

REPORTER: So that’s, that’s not true?


GUY GILMORE: —has other investment vehicles that, that are associated with that.

JOE FUCHS: There has not been a dividend sent up from MNG that in any way shape or form would be the basis for any of that. It’s just plain not true. What is true is that we have as a matter of strategy in long term, let’s call it survivability and consistency, set up a strategic opportunities group all under the same ownership, the board of MNG, where we are making sort of Warren Buffet Style investments in some other things — first one, not very successful, at first.

Fact Check
At this and other meetings, Fuchs specifically refers to “no dividend.” An interesting choice of words — no one has reported that Alden’s founders, Randall Smith and Heath Freeman, ever took a dividend. But there are other ways to extract profit.

REPORTER: Fred’s Pharmacy?

Fact Check
He’s referring to a $158 million investment, now worth  roughly $20 million, that Alden made in the Fred’s chain. DFM/Alden acknowledged in court filings that it took the money to fund Fred’s from an LLC set up as a DFM subsidiary. 

JOE FUCHS: Yeah. Having said that, what the effort did — and it may not be dead for long-term but [unintelligible] it was just a time issue with the deal and it didn’t happen — but the whole notion here is to nurture the newspaper business, right-size it to be sure, within the economics, take what cash flow can be taken, diversify into other assets to provide overall stability and financial success for the entire company.

But none of those funds have leaked up through, this way. Is it the right strategy? We’ll see in three to five years, but it is a variation on the Warren Buffett strategy. And so some of that stuff of bleeding this company for personal intent it just simply isn’t true.

Fact Check
He’s referring to Alden/DFM investing in unrelated business, such as Fred’s.

REPORTER: And this is the last thing, I want to ask you. Are you concerned about combating that perception? I haven’t heard or seen much from DFM about that, and when you do hear about it it’s people saying that they were told not to mention Alden in editorials, things like that, people being fired or leaving of their own accord. Is there a concern about combatting that perception?

JOE FUCHS: Yeah, there is.

REPORTER: Publicly, though?

JOE FUCHS: Well, that’s a good question. We went — there was such a concern, we spent a lot of time talking about it. And we even went out and hired a consulting firm, and not for not very much money because it was an initial view, the same people that did the Tylenol thing for Johnson and Johnson — best possible people. And the answer that we got, given our situation, where we didn’t have to make an excuse for a bad product, where we had a business. What we had to make an excuse for is sort of right-sizing a business, so, for sustainability, and the general notion was, don’t say a word.

Fact Check
First time we hear they consulted with a damage control firm in response to news coverage of Alden! For younger readers, he’s referring to corporate damage control after the Tylenol murders in the 1980s.

Work internally so people understand what you’re doing, continue to do and perform superbly, and that will right-size itself. And — even to the extent as you guys know, ladies and gentlemen know, we’ve had a couple of disturbing elements, a couple of them here in Colorado. We had recently a (unintelligible) guy from Philadelphia that went up and did some things in the Hamptons.

Fact Check
He’s referring to this.

And under all those circumstances, after much debate — a little debate, a little agony — we decided to shrug our shoulders and leave it alone. Leave it be for what it is. And nobody was, just absorb the blows, do our business, and do it as well as possible.

Good answer? Bad answer? The answer is there is no way to defend publicly — eh, you just have to run a great business. I don’t know. [Cross talk]

Fact Check
An interesting observation.

GUY GILMORE: In that sense it’s difficult, you’re talking about your own newsrooms are bound and determined to denigrate the owners. And not all the newsrooms are, but numbers of outspoken newsroom people in this company are bound and determined to denigrate Alden. So if you have — it’s pretty hard to swim upstream against that, publicly. And then you have the Ken Doctors of the world who like to pile on. So, we’ve thought a lot about it. And hopefully we decided the better part of valor was to just let it wear itself out.

Fact Check
He’s referring to the Denver rebellion here, and probably Dave Krieger’s firing at the Boulder Daily Camera. As a side note, the “wear itself out” comment briefly lit up the Twitter-sphere the day of the meeting.

And we may have people that know better though publishing things that are just — the best description you could come up with would be deceptive. And they work with our newsrooms and union leadership on the East Coast. So if you’re dealing with that kind of climate, sometimes you let it wear itself out rather than try to combat it or confront it, publicly.

JOE FUCHS: I hope that in a year from now, this organization and all of our papers will still have a reputation as being a trusted brand and a strong franchise in the communities, doing what we’re supposed to be doing. But that —

GUY GILMORE: This is interesting, you never hear, you know — there’s this yearning now for the white knight, who’s a multi-billionaire who comes in and saves, saves us all. And yet, you kind of have that in the Newhouse company, corporate — I mean, multi-billionaires, these guys are, not publicly traded. And what do they do? They take something like the Oregonian and cut it to three days. And yet you don’t have this hue and cry about the evils of the Newhouse brothers.

Fact Check
Actually, you do.

So it’s a, it’s just a cauldron of emotions and you can’t really explain why some publicity doesn’t happen and other publicity does, and unfortunately people inside a newsroom will denigrate itself effectively. It’s not — and you understand where they’re coming from, you totally can understand it, but it’s sort of self-destructive.

REPORTER: Well from my perspective you’re still talking about how there was this effort to kind of diversify, and the newsroom would be supported by things like Fred’s Pharmacy and I don’t view it that way at all. It feels like we’re supporting investments that are completely shaky, and even if they would have been profitable, we wouldn’t have seen any of that money. And on top of that there’s these LLCs that Alden benefits from. I mean, and you say that you hope that the franchise will continue to be looked at as the gold standard — we’re not.

I mean, when you look at our peers, at other newspapers around the nation, we’re not near staffed with what the Houston Chronicle is, the Minneapolis paper is, the Utah paper is, the Philadelphia paper is. I just don’t know how you can with a straight face say there’s some sort of effort to diversify us and support us. It feels like we’re being raped and raided. That’s what it feels like from our perspective.

Fact Check
Alden’s “distressed” business strategy has often been referred to in pirate metaphors — raiding, pillaging, plundering.


JOE FUCHS: I understand, looking at it from the perspective that you are. In terms of an overall corporation, the sustainability and the profitability of an overall corporation helps sustain all of the elements to it. What you’re saying is, wouldn’t it have been better to take that cash flow and hire or sustain or keep more people?

REPORTER: You would get more clicks if you did—

JOE FUCHS: Well, that’s the issue. That’s the issue. And I’m not so sure we’re going to agree on that one.

REPORTER: So you cut it and make a bad product?

JOE FUCHS: That’s the problem. I cannot make Sears not close stores. I can’t make Kmart not close stores or the electronics companies. They have dealt us a major blow.

Fact Check
If Alden invested in Sears/Kmart while Sears was struggling financially, that is Alden’s normal M.O. So it’s curious that Fuchs connects an unrelated and apparently bad investment to DFM’s cash flow problems.

REPORTER: We took $126 million from the media properties and put it in a crappy investment! And then not — if it would have made an investment — shared any of that money with the properties. To grow ‘em!

Fact Check
It was actually $158 million.

JOE FUCHS: We have shared some of the money with expanding our footprint in the newspaper business. And the commitment to this business is real, we would not have poured, purchased the Orange County [Register] property, or more recently the Boston Herald, if there wasn’t a conviction that this is something that we want to be, that they they — they want to be invested in, and that can be run in a solid footing and make it work.

Fact Check
This is a disingenuous twist of logic. Buying even more newspapers to strip of their real estate and other assets, then drastically cutting their staff to achieve above-average profit margins is not showing a commitment to the news.

REPORTER: And when you did that, you you laid people off! You made investments and laid people off in the properties that are suffering.

JOE FUCHS: Because, they’re not —they’re not suffering as much now! But they did get some layoffs to make them economically viable. It is real easy to drive this business into bankruptcy.

Fact Check
‘Not suffering as much.’ DFM did make them highly profitable thanks to severe staff cuts that were more than twice the national average rate.

REPORTER: Are you confirming that you’re not going to file for bankruptcy this year or next year?

JOE FUCHS: Yeah, yes, for sure!

REPORTER: Because there’s a big belief, that they still — they have a credit line, and they’re saying that they can’t meet the credit line.



JOE FUCHS: Oh my God. Well that is really off-balance. I hadn’t heard that one. The answer is: under no circumstances, is there any even shadow of a prospect of anything like bankruptcy, not funding a credit line — which we do have, by the way—

Fact Check
This is surprising, because it was detailed in court filings in the Solus hedge fund lawsuit against Alden/DFM.

REPORTER: I thought we were trying to renegotiate, we were having troubles.

OTHER VOICE: He’s talking about Alden, specifically

JOE FUCHS: Alden doesn’t have a credit — this is MNG, the debt on MNG — it is true we have explored, yet again, redoing the financing to lower the interest rate and fix the amortization schedule. And the bond market moved away from us. But that is, uh, this is just financial movement back and forth. Had nothing to do with the credit line, the funding of the credit line, anything to do with the business whatsoever. It had to do with the bond market. And this is, this is smar —

Fact Check
So here he seems to be acknowledging the existence of the $225 million loan that comes due this year, and that, according to filings in the lawsuit, DFM is trying to refinance.

REPORTER: It had to do with Fred’s Pharmacy, too, didn’t it?

Fact Check
Fuchs is correct here. The line of credit or loan was not related to Fred’s. Alden/DFM, however, did set up an LLC under DFM to finance its $158 million investment in Fred’s and admitted it in court.

JOE FUCHS: Not at all, not at all, not at all. No way, there was no…[sigh] the balance sheet of MNG, Media News Group, is as strong as you could possibly want it to be. No, there’s zero, zero financial vulnerability.

REPORTER: The way the LLCs are structured, do those benefit Alden?

JOE FUCHS: No. Their only ownership is of the equity and debt, the equity, essentially, of Media News Group. And there’s some outsiders that own it, too. And oh by the way we’re trying, we’re in the process of buying some more people back. They want to control more of it.

GUY GILMORE: More shares, yeah.

JOE FUCHS: We bought a significant minority owner, uh, nine months ago? Or maybe a year ago? And within the next week or so we hope to buy another minority shareholder, shareholders’s position back — for cash! Yes. So yeah, that notion is — put that apart. A good argument is, wouldn’t it be better if we had another hundred people in the newsroom, and didn’t have the profit margin that we have?

Fact Check
This is news. The existence of other shareholders was only made public recently, when minority shareholder Solus filed their lawsuit against Alden/DFM.

REPORTER: I don’t think we need a hundred more people but I do think we need to have it explained.

JOE FUCHS: I’m sorry I exaggerated that one, but it’s a balance.

REPORTER: What is? What can you tell us about — what’s the level of resistance that DFM is willing to show to Alden when it comes down to making these cutbacks? So Heath and Randy come up with a number, you’re gonna get it down 30 percent — does DFM get in their face and say ‘guys, we’re newspaper people, this is not the way to run a newsroom, this is getting reckless, this is getting ridiculous.’ Is there any kind of resistance that you can impart to us that gives us comfort that you really have our back?

JOE FUCHS: The answer is that discussion absolutely occurs, did occur, and (sigh) you may not like this answer, but I can tell you what happened. The answer was, given a three-to-five year projection — and it was really the three-year projection of revenue trends — the decision was made around should we do it piecemeal, or get it over with? And I know that sounds like an awful thing to say, and put in sharp contrast. But we decided — management and ownership and the board decided — that the way to go about this was to face up to it, do our right-sizing that we hope then we would get through this tough period — and people are people so you know it’s going to be tough, there’s nothing good about this — and then go back to work and build a business and continue the business on a sustainable basis.

Fact Check
He’s apparently referring to massive layoffs across all DFM papers in the past year. But the papers have had near-constant layoffs ever since Alden took control in 2011-2012, so it’s unclear why the latest rounds of cuts were somehow different. Other than they come at a time when newsrooms are already at extremely bare-bones staffing levels.

Now, the next question is, will there be any more cutbacks? Agh, I hope not in the sense of right-sizing the business. Can drama occur, can something bad happen? Sure, I guess it could, but the intent here was, if I can use a metaphor, to rip the bandage off. Face it, face everybody, get it done, get the bad publicity — and we got our share of it. Could it have been handled differently? I don’t know.

REPORTER: And I don’t use the term reckless lightly because just this week we saw the startup of a competing organization with the fine folks of this newspaper that now are gonna make our lives more difficult and a more saturated media market —

Fact Check

GUY GILMORE: You don’t really believe that, do you?

CHORUS FROM ROOM: Yes! Yes, yes we do, absolutely, that’s what we believe, it’s a direct result of Alden. It wouldn’t be in existence had that not happened.

REPORTER: Do you guys have a strategy to deal with startups like this? Because they’re popping up all over the country. And say —

GUY GILMORE: We’ve had a startup like this in the twin cities, called Minn Post, it’s been there for years, it’s run — these are not weak people, it’s run by a former publisher of the star tribune, it’s got name journalists in it. It’s been out there for years. It’s affect on the business is zero, it’s just, it’s a distraction. [cross talk] We don’t wish them ill…

[cross talk]

GUY GILMORE: If that’s your biggest worry, you’re doing terrific.

VOICE IN ROOM: That’s not our biggest worry.

JOE FUCHS: That’s not true, that’s not true, the St. Paul paper has a great share in the St. Paul market.

GUY GILMORE: We don’t publicize this for related reasons to why we haven’t gone public about Alden. We’ve outperformed the [Minneapolis] Star Tribune every year for ten years —

REPORTER: Because you cut the crap out of the property! That’s why —

JOE FUCHS: No, no, market share, print market share, we’ve outperformed — we’ve gained share and held it.

REPORTER: Is your subscriber roll bigger than their subscriber roll?


JOE FUCHS: Yes! In our home, it’s — we outperform them two to one in the East Metro —

REPORTER: On your side of the river.

JOE FUCHS: The only place we distribute, yes.

REPORTER: So, what’s your Sunday subscriber roll? How many people are subscribed?

JOE FUCHS: It’s about 180,000

REPORTER: And what’s their Sunday subscriber roll?

ANOTHER VOICE: Twice that.

[cross talk, shuffling, noises]

JOE FUCHS: People don’t want to believe what the facts are. It’s like here’s the facts, we’ve outperformed, we dominate them on our side of the river, our sales people worry more about the weeklies, and when you say that it’s like oh, we don’t believe that. We have never competed on the west side, ever, for a hundred years.

REPORTER: So they [the Minneapolis Star Tribune] compete with you? They try to, not very well. Not very well.

ANOTHER REPORTER: Their newsroom sure seems happy.

JOE FUCHS: OK, this is a good one here. This is a good discussion here. Trust me.

GUY GILMORE: Keep pushing.

REPORTER: Well I feel like you’ve made a decision that you cut it and ensure a certain level of profitability but it’s not good for the employees and it’s not good for product.

JOE FUCHS: Well it’s not good for, unfortunately, the employee that had to go.

VOICE IN ROOM: Or the employees who had to stay! The people who are staying are dying. We’re dying. Doing twice and three times what we used to. We’re working three different jobs, four different jobs to make up for the people who are gone.

REPORTER: People are leaving voluntarily, we don’t feel valued — why should we stay? We’re all dying.

OTHER REPORTER: Why shouldn’t everyone in this room be looking for another job elsewhere right now?

GUY GILMORE: Because you can’t — because you have a better job than probably you can — I mean, as hard as it is right now, you have one of the finest journalism jobs in the country. Yes, there are better places, New York Times, but —

REPORTER: Why is it the finest journalism job in the country?

GUY GILMORE: It’s a great market to be living in, it’s a great paper to be working for, the wage scales are high here.

JOE FUCHS: You’re going to get exposure, you’re gonna get your name in print.

REPORTER: Do you work in the same newsroom as I do?

GUY GILMORE: I’m associated with about 50 newsrooms who would die to work here. Mostly.

REPORTER: Well, we’re dying right now.

JOE FUCHS: No, you’re not dying. You’re frustrated.

Fact Check
Literally correct, but astoundingly patronizing.

REPORTER: So, my name’s Noelle Phillips and I’m a reporter that covers public safety and I’m the vice-chair of the Denver newsroom Guild, and I appreciate the fact that you guys have finally showed your faces here and talk to us and answer our questions. It’s been a long time coming. Digital First Media’s decimated this newsroom through massive staffing cuts, and we can no longer cover this city in the manner it should be covered.

For example, I alone must be the watchdog to nearly a dozen police and sheriffs departments, I monitor court systems in five counties — just me, because everybody else is gone, because of your cuts. You moved us out of the heart of the city into the most polluted zip code in the United States of America to sublease our former newsroom to city government for millions of dollars, yet this newsroom hasn’t benefited from the money that was made.

In fact, we were here in less than two months, and we got orders to cut a third of the staff. You refuse to negotiate with the Guild to increase our pay and like you said, it’s hard to give pay raises to a Guild, well, our sister papers in Loveland and Boulder and other Colorado communities are not Guild and they’re not getting raises and they’re getting laid off as well. We’ve given enough, it’s time for you guys to invest in this newsroom.

My main concern is the vision and plan to do what you have to do for the long term viability of this Denver Post newsroom. There’s been a lot of platitudes today about sustainability and risk management and all this corporate speak, but there’s no real plan.

For example, our paywall was put in place, it’s never been given a chance to succeed. I subscribe to my own paper, would love to read my own paper on my iPad at home, the thing cannot retain my own password, I can’t tell you how many times I’ve had to reset the password to my own newspaper.

Fact Check
The Denver Post recently set up a paywall for readers to access its online content.

And I’m not alone in this, I have sources all the time talk about it. So here’s something we’re trying to do to make money, and it doesn’t work, and instead of giving us the resources to make it work, you cut again. And so like, we need to hear like real talk about what you’re gonna do to support us, rather than, ‘oh we wanna be sustainable.’ Part of sustainability is when you put out a paywall, make the thing work. Everybody has multiple questions, that’s mine, like, let’s get on that.

JOE FUCHS: There’s no question that that’s gonna get investment. It’s been a concern to us, and it’s a real one. And in the fight for investment, that one is gonna get it, you’re going to see it over the next year. That one is gonna get it.

Fact Check
Setting up paywalls is the ONLY thing Fuchs or Gilmore have said they will invest in at DFM papers during the coming year (in both this and their meeting in Walnut Creek the next day).

REPORTER: You promise? You’re gonna give it, because, our digital staff has been decimated, and they’re the ones who like have the brain power and the understanding of how to do it. I’m a reporter it’s not my specialty I admit it. I can write some kickass stories, but you know that paywall needs to work! It needs to work.

ANOTHER REPORTER: You might note that our entire app is on the wrong side of the paywall. You download the app you read everything for free.

Joe Fuchs


REPORTER: it’s just complete — there’s just no vision or plan, it’s just haphazard. That’s what we’re asking you to do.

JOE FUCHS: It’s not that there’s no vision or no plan. The vision was not to pursue the paywall. We made that decision a year ago. Why did we do that? Because we’ve watched people like Bezos at the Washington Post who hasn’t been able to make much profits with it. The New York Times and Wall Street Journal have made progress with it. And middle-sized, major-metropolitan-area-papers like the Denver Post should be able to do do better. We made that decision we’re going to fund it. It’s going to be — that is a strategic move that we are going to make. Hopefully it works. No guarantees

REPORTER: And I have one more question, if my colleagues will let me go. My big question is, what is the approved staffing level for this newsroom, like what — how many people can we have — and retain at at least this level of stability. Like what’s the number. Like, how many people are you authorized to have in this newsroom. Y’all know.

JOE FUCHS: No I don’t really know.

GUY GILMORE: Joe would not know.

REPORTER: Do you know Guy, could you tell me?

GUY GILMORE: It’s probably 72 or 3, some number like that.

OTHER VOICE: We’re budgeted for 73 with 5 open positions, so net 68.

OTHER VOICE: We’re at 63 now, counting rank and file Guild and managers, we’re at 63 —

GUY GILMORE: — and she’s [not clear who this refers to] hiring. Yeah. And she’ll be successful at hiring, because this is a place where people want to come and work.

REPORTER: So the five open, does that mean you just always count on having five positions?

GUY GILMORE: It’s kind of a natural, Justin can speak for himself but we call it churn, because people can come and go so it’s, it’s some number like that.

JOE FUCHS: The the question always is: how do we grow the franchise, or sustain the franchise, if you want to put a negative spin on it? And the answer is, content is critical. An appropriate amount of content put in the right place, there’s absolutely — there’s nobody denying that. And I’m not sure that any of us have the magical answer for the, quote, right number of people in a newsroom, or the right number of printing presses, or any of that stuff. The whole industry is suffering with that.

Fact Check
Perhaps, but DFM papers have laid off staff at twice the rate of the rest of America’s newspapers. Put another way, DFM has cut 45 percent of its workforce at its 12 union newspapers since 2016. The newsroom of the Minneapolis Star Tribune has more employees (around 245) than all of the Guild-represented employees in those 12 DFM newsrooms combined .

We are determined to have this property to continue to be a premier property in the country. Now, I know that sounds disingenuous given what’s just come down, but the answer is there is a right-sizing requirement, and I hate that word, you hate the word

REPORTER: Despise it.

JOE FUCHS: Yeah, you should despise it. And I think that we all do, but I don’t know how else to describe it, you know?

ROOM: Cuts! Downsizing! Lunacy!

JOE FUCHS: Yeah, yeah. There’s no good way to word it. There’s no good way to word it.

REPORTER: I have two very different questions. I’m a digital guy that Noelle mentioned you know, and she mentioned very specifically the login for the paywall, the login for the e-edition app et cetera, I have been sending up as high as I am aware of someone to send to complaints about this login system for four years. And nothing has ever improved not one bit, I have forwarded hundreds of emails from readers.

You say content is important. But if we’re driving readers away, what does the content matter? We need to fix the technology. And if you guys were the top and you have the power to send down the order, fix this damn technology, please do it. I’d like to see this stuff fixed. We’re talking about tiny, tiny issues change of one word in a line of code, that would fix a problem for thousands of people, someone just needs to change that word in the line of code — I could do it, but I’m just a schlub in Denver who can’t get a raise.

[cross talk, laughter]

REPORTER: I’m another one of the reporters, [unintelligible]. One of the things that the premier properties in the news biz have in line with the nation’s tradition is a kind of robust and independent editorial page. And I’m wondering it that might help boost our actions on the front lines, getting that content, if we had some sort of restoration of that kind of thing that all of the premier properties have. At least it could stop the hemorrhaging that’s really still going on here since you took off that bandage.

Fact Check
Both the Denver rebellion and the Boulder Daily Camera uprising involved editorial page editors. Their firing and resignation have left the question of continuing the editorial pages in limbo.

JOE FUCHS: It depends what you mean by a robust editorial page. If what you mean is a political position that pokes the eyes out of fifty percent of the population, I personally would argue against that. There’s some argument internally about that. If I had to make a decision, which — this is a discussion this a really tough one, because the tradition in the newspaper business is what it is. And a political argument for the newspaper was very valid when there were two, three and four newspapers in a marketplace and you could position — we have that on cable television now, that’s taken that over.

I would argue, and do, and I and some other people argue back and forth on this issue, so I don’t see an absolute decision at the moment. But personally, I like the USA Today model better, where you have a pro and a con, on a politician, or political issue. And, well written, well done, but where the newspaper itself is not saying, ‘dummy reader, if you don’t believe me you’re wrong.’ I just don’t think that that’s where we ought to be in terms of building a franchise, but a good editorial page, that does some of that with well written pieces. Guy do you wanna negate me on that?

GUY GILMORE: Yeah, I mean it’s become a topic, we talked about this with our last meeting with the managers. It’s become a topic, I consider it a historical accident that we had — it just so happens that you know we had this rogue situation here, and up in the mountains, and they just happened to be editorial people. And so people far away from this, they’re like ‘what’s with this editorial page thing, what’s this?’ And so then it becomes a — just by accident — a topic of conversation, and it’s, it’s sort of accidental. And then all the views come out. And you know Joe’s background, in recent years, is in broadcast — they don’t have editorial pages in broadcast. They don’t do that. So people — and I love reading editorial pages — so I’m the wrong person, you know, to be a skeptic. But I find it hard to believe that you could ever tie a daily newspaper’s success and profit to an editorial page. I think if you’re the New York Times, maybe, Wall Street Journal, maybe — diametrically opposed editorial pages, but then once you get even into the regionals, major regionals like you or the Star Tribune, I, I mean I think the Strib [Star Tribune]could kill its editorial page and it wouldn’t make a difference. Doesn’t mean you don’t want to run ‘em, but I think it’s not a huge issue and it came to the fore after the —

Fact Check
Another reference to the Colorado rebellions. The “rogue” adjective was hotly debated the next day at meetings in California.

REPORTER: Profitability and success are not always the same thing in the newspaper world. Like yeah, we want to make money, but our success as journalists is to foster change, and I can guaran-damn-tee you — ‘cause I cover public safety and then city hall a little bit because they oversee public safety — when we write a story, they react. And when our editorial board weighs in on it, they react. And that’s part of our mission and our success too. It’s not all about money, which I often think is part of the conflict here between you guys in suits and us, is —

Fact Check
Guaran-damn-tee: word of the week.

JOE FUCHS: Sure it is, sure it is.

REPORTER: — because, if I wanted to be rich, I would not be a newspaper reporter. If I want to make a difference in my world, I’m doing damn well what I want to do, and I don’t feel like I’m getting the support for that mission from the people in the suits.

And it doesn’t feel like you guys care about Colorado, Denver, journalism, First Amendment. Because we don’t feel like we’re getting that support. So when you talk about getting rid of an editorial page, which I have nothing to do with because I’m a reporter, that’s part of what makes a newspaper. and like makes change and makes a difference in a community, and that’s what we are here for that’s our number one mission.

JOE FUCHS: You write about things that are important to the community. You don’t editorialize in your articles.

REPORTER: Absolutely not but they jump at our opinion page. I hear it, it makes a difference.

JOE FUCHS: Well so do we, on the other side, too.

REPORTER: Well, you’re not going to make everybody happy with that kind of stuff but you foster a conversation in the community.

JOE FUCHS: Fostering a conversation in the community is what we should do. I think we’re all agreed with that. But a plus and a minus. A pro and a con. On that same issue, would be just as stimulating as us saying to half the readership, who don’t agree with something, that you’re a dummy.

REPORTER: It feels like we’re like, not flexing our muscle.

[cross talk]

OTHER REPORTER: How much does the newsroom have to pay to rent to pay for the printing plant and where does that money go? Do we have to pay rent to be here?

Fact Check
This is referring to DFM’s sale/leaseback of its offices and printing plant in Denver. First, the main Post building was sold, then the newsroom moved to its printing plant, which was also sold to an Alden subsidiary and then leased back to the paper. If you’re dizzy, it’s understandable. Solus, the hedge fund suing Alden, calls this action improper and possibly fraudulent.

JOE FUCHS: Well [laughs]. Uh, no. The cost of the building is the cost of the building,

REPORTER: So to be here the newsroom pays no rent whatsoever to be in the printing plant?


ANOTHER VOICE: We don’t pay anything incremental to what we paid before the newsroom moved in.

REPORTER: What does that mean? We don’t speak your accounting language.

VOICE: We rent this building, and we pay the same rent that we paid before the newsroom moved in.

REPORTER: And we pay some of that rent? Who gets the money?

OTHER REPORTER: So Denver Post pays who to be here? It comes out of the newspapers bottom line to be in this building. And who gets that check?

VOICE: The landlord

REPORTER: Who’s the landlord?


OTHER VOICE: Twenty Lake Holdings.

REPORTER: Who’s Twenty Lake Holdings? Who owns that?

JOE FUCHS: Alden, Alden owns Twenty Lake Holdings.

Fact Check
Press releases (and news stories) for several years have implied that Twenty Lake was unrelated to Alden, although this website linked the two through mailing addresses and public records. Alden recently admitted Twenty Lake was an affiliate in court filings, but here Fuchs is acknowledging that Alden “owns” the real estate firm.

REPORTER: Yeah it’s an LLC. We pay them.

OTHER REPORTER: Hurtin’ our own bottom line.

REPORTER: And you’re taking money from us, to be here.

JOE FUCHS: Well, you would have to do that anywhere. I mean, I don’t understand that, if you rent —

REPORTER: Yeah, the interest rate that we’re paying is 14.5 percent, where is that fair? That’s not a fair interest rate. That’s an interest rate that benefits Alden.

Fact Check
Unclear what this is referring to.

VOICE: I’m not sure what you mean by interest rate, we pay rent..

JOE FUCHS: you pay rent… I mean you gotta pay for wherever you’re gonna be. Is this as expensive as the downtown?

REPORTER: And it goes to Alden.

OTHER REPORTER: Yeah I would bust a politician for double-dipping if I was writing a story about that.

JOE FUCHS: Double-dipping? Oh. Because a separate entity owns the real estate —

Fact Check
The sale/leaseback was labeled “troubling” insider dealing by Solus in its lawsuit.

REPORTER: What did we sell the printing plant to them for? And what did we bill them for? It cost us a hundred million to build it, we sold it for like five million.

JOE FUCHS: I don’t know the numbers on that one. Yeah I don’t remember.

VOICE: How much did we sell this building for? Fifteen million, and it was used to pay down our debt.

JOE FUCHS: Correct. Yeah.

REPORTER: And what was the interest rate?

Fact Check
It’s unclear what interest rate this speaker is referring to.

JOE FUCHS: There was no interest rate. Rent is a different number. Paying a market interest rate for property in this location, but there is no, in the sale of real estate —

REPORTER: And I thought you earlier said that the LLCs were structured such that Alden doesn’t get any of that money. That’s obviously not true.

Fact Check
He is correct.

JOE FUCHS: The LL — well, ok, so the LLCs, I was referring to the LLCs under MNG. There’s a whole host of them — Media News Group owns God-knows how many LLCs.

REPORTER: Alden owns some too, right?

JOE FUCHS: They own — yeah but not of the — not under the umbrella of MNG. They do own real estate. They also own substantial real estate in Dallas and Houston and — there is a real estate, a very sophisticated real estate business, but that — if you’re asking are we paying for this building a competitive, a market competitive rate, the answer is yes. Now, would we be better off if we owned the building?

REPORTER: At one point in time you did, did you not?

VOICE: We did.

VOICE: It’s not unlike Colfax, that was a sale/leaseback too, we used to own that building too.

Fact Check
He’s referring to the Denver Post’s former office building on West Colfax.

JOE FUCHS: Ownership of real estate is not something that the newspaper business, and most people in the newspaper business are walking away from. I wish we didn’t have to have a manufacturing plant too, but we do.

Fact Check
Historically, owning buildings and real estate gave newspapers a safety net for recessions and other times they might have needed to draw on their equity. The massive sell-off of newspaper real estate today is related to the trend of hedge funds like Alden taking over the country’s major news chains.

REPORTER: Speaking about the editorial, again, backing up to that a little bit. You mentioned that you’d like to see the point-counterpoint, both sides, and you said several times, “well-written editorial” and I’m curious if you’ve read many of our editorials, because I’ve worked here for thirteen years and they’ve all been brilliant, and they’ve always offered both sides of everything, even if they came down on one side or another. And some of them, like our very unexpected, even to me, endorsement of Senator Cory Gardner, to this day garner tons of web traffic because people are still shocked by that. Anyway, just the —

JOE FUCHS: The word well-written, if I implied that this newspaper is not well-written, I did not mean that. I think it is very, very well-written.

REPORTER: Beyond that, and Jonathan forgive me, I want to give you guys both huge credit for coming here to sit in front of us. I appreciate it. Because it’s gotta be a little scary to sit in front of these fifty angry people who are used to making people mad on purpose.

JOE FUCHS: Remember I was an analyst for many years.

REPORTER: So you know!

JOE FUCHS: Yeah I made lots of corporate people mad.

OTHER VOICE: He still makes us mad, Joe does.

REPORTER: So here we are, right , and there’s a lot of anger in this room as I’m sure you guys can both tell. And you said that a lot of what we’re angry about we’re maybe misinformed on. Is there any thought on your parts that seven, eight years of total lack of transparency, not communicating these things to us, is why we’re misinformed and angry. And that maybe if this kind of discussion keeps going —

Fact Check
Alden is well known for its secrecy.

JOE FUCHS: It’s only part of it, it’s only part of it.

VOICE: But Mac [Tully, Denver Post publisher who resigned in January] spoke to you guys on a regular basis, right?

REPORTER: Well, a couple of times, but he wasn’t even CEO all that long.

REPORTER: A lot of times he’s not privy to what DFM is gonna do —

JOE FUCHS: Yeah, I see, I see.

REPORTER: That understanding from the very top of Digital First all the way down, you know: how the umbrella works, how everything underneath it fits together. Things that you’ve told us today are things that we’ve never heard before and whether or not we believe them, you might be right that we don’t believe all the stuff we’re hearing because it’s a contradiction to —

[cross talk]

JOE FUCHS: If the reality comes through. I understand the issue of the financial part of, who owns what, who does what, what’s right, what’s wrong, what’s the transparency? We will make an effort to be more transparent. There’s no reason not to be.

Fact Check
Observers, including this website, will keep an eye out to see if this promise is kept.

[cross talk]

REPORTER: These things, so if they’re not hidden and they’re true, and you’re telling them to us, why can’t you say them publicly or why won’t you give interviews and say things publicly when your Ken Doctors call and stuff like that?

GUY GILMORE: I will tell you and Joe can elaborate on this but in a former life, I have tried this. I mean I’ve sit with analysts’ pages of numbers, some of them publicly available. And I know before me Steve Rossi, I think you know was really careful, and I think it was Ken Doctor and they staged this conversation and they put all kinds of, in order to try to keep Ken Doctor from pushing whatever his line was, which was never favorable, and I utterly failed. I told the absolute truth, I had all the numbers. I got the response from him that I got from you all — it’s not true. You’re not [unintelligible], it’s not true. And Rossi went to Doctor, and had a similar conversation, and it was an utter failure. And Rossi, whatever else he is, is not a liar.

So, you go through some of these, it’s like — we come from where you come from, it’s like, well let’s just explain it to these people. And then you sit and you stage it and you work it and you explain it and they ignore you, and take the line they want to take. They show you the commode in Pottstown, Pennsylvania that’s on a floor that nobody uses, hasn’t used in years, no employees ever use it, and says that’s Alden.

So when you’re dealing with people like that, you try, and then you realize the better part of valor is let’s just stick to our knitting, try to run the business, and not get drawn into these traps. They’re traps! And we saw it today about the Strib [Star Tribune] — it’s not true.

Guy Gilmore

JOE FUCHS: OK. Why dialogue helps. I don’t expect you to believe everything that I say, but at least there’s a dialogue, and you may certainly not agree with everything. Certainly this issue of LLCs and who owns what, is a fairly detailed issue. But a good one.

REPORTER: So in the process of ‘right-sizing’ the company, have you factored in raises for yourself, have you gotten any raises in the last ten years or not?

JOE FUCHS: No, no, no. And Randy Smith, who owns Alden, hasn’t got a nickel from it. So the answer is —

REPORTER: He gets nothing from the LLCs?

ANOTHER VOICE: You mean he gets nothing from the cuts?

JOE FUCHS: Yeah, from the real estate portion, I believe he does. And I don’t know, I have no visibility on the real estate business that they have, to which businesses, not only ours, but other people have sold buildings. You know, so, yeah. They do buy real estate. They do lease real estate, and I know —

Fact Check
Fuchs is acknowledging here that Smith personally benefitted from the massive sell-off of DFM newspaper real estate via Twenty Lake Holdings.

REPORTER: And some of that, presumably, could have gone toward his mansions?

Fact Check
Referring to Mr. Smith and his wife’s years-long buying spree of more than a dozen Florida mansions for more than $50 million, plus two more in the Hamptons valued at $20 million.

JOE FUCHS: (laughs) Presumably not those mansions. His wife’s real estate business in Palm Beach, I’m pretty sure it was from his own money prior to anything to do with MNG.

Fact Check
No one has reported the money came directly from DFM, but the timing is curious. Smith’s buying spree began in 2013, a year after DFM papers became Alden’s principal holding. And as Fuchs says, Smith did profit from selling the newspapers’ land and buildings, worth many millions.

GUY GILMORE: Let me go back to the raises thing, I can tell that, I’m just new at this. But I know now that the leadership at the various papers and publishers and so on, I can tell you that they do not get raises. They have not gotten raises and it’s probably been five years. We promoted a person on the East Coast, when we bought the [unintelligible] and he got a raise because his revenue doubled. But that’s the exception. The other publishers, and department heads for that matter, they’ve been locked down, too. So, I guess it’s not great news but it’s not been some of what you read about other companies where the brass are really [inaudible], that certainly hasn’t happened at the publisher level or any other level, so.

Fact Check
It’s unclear who the “person on the East Coast” is.

REPORTER: So we had 30 layoffs, ripping off the bandaid, but then yesterday Loveland [Colorado] just had a layoff. So my question is are we just gonna be next — oh, and Daily Camera had a layoff. So are we just gonna continue to have layoffs or are there gonna be layoffs next year? Is the Denver Post going to be here in five years?

JOE FUCHS: It better be. The plan is to have it be here, be a vibrant force in the community.

REPORTER: It’s not vibrant! You’re making it not vibrant.

JOE FUCHS: Well, it’s a definitional, yeah, that’s a definitional issue. And it needs to be.

REPORTER: Well, I think the way to judge it, like you say St. Paul is so solid and beating all your expectations.

GUY GILMORE: No, I’m not trying to exaggerate the situation. They’re [The Star Tribune] twice our size, they have 250 people in the newsroom. But all I’m saying is, we have fifty people in the newsroom and they have 250 people in the newsroom and we continue to sustain against them.

Fact Check
That’s Alden’s model: put out papers with the minimum staff possible, even if it means fewer reporters are simply regurgitating press releases. Fortunately for the public, DFM’s remaining reporters continue to take pride in and excel at their jobs, even winning Pulitzer prizes.

REPORTER: And where will those two properties be twenty years from now? Because one seems to have vision for the future and the other seems to be just taking the money.

GUY GILMORE: I think we hear you and I think reasonable people understand the question and the concern. We don’t know, you know, we can use that one as an example or any other one — you had the Huntsmans who were gonna be the saviors in Salt Lake City and they cut their newsroom what, 30 percent? So there’s a lot of it going around.

Fact Check
Well, that’s an acknowledgement.

REPORTER: Can we go back to the layoffs? So why are those happening and are they just gonna keep happening?

JOE FUCHS: The intent is no, given the view that we have of the business over the next three years.

Fact Check
That’s a carefully worded non-promise.

REPORTER: So the 30 percent is the projection of where revenues are going over the next three years, where the numbers — ?

JOE FUCHS: I think [combinating?] it, and it’s yeah, I’m afraid there’s some truth to that. Within a margin, you know?

REPORTER: So, do you go every year and re-evaluate, every six months and re-evaluate, every three months and re-evaluate, like how often are we going to be faced with?

JOE FUCHS: The next evaluation is how much money do we put into solve the problem that was brought up in terms of your issue of the paywall. The answer is, yeah.

GUY GILMORE: I have to say that there’s not a centralized, there’s not a control center somewhere that says, OK, there’s generally the local management, publishers, nine times out of ten work through what they think needs to be done to keep pace with the revenue trends and so on. Then this was sort of an exceptional situation in Denver. And I think what you have to assume is that you know the leadership is going to continue to try to adjust expenses to revenue. You know as time goes on, revenue trends will influence expense trends.

JOE FUCHS: There is no magic to this thing. Next week on Wednesday, next Wednesday, we have a board meeting. And Guy and the team are gonna present the budget for fiscal ‘19, 18-19. And we’ll chop ‘em apart. In terms of, why this, why the other thing, how are we doing, what’s the circulation? All of these pieces. There is no clairvoyance to exactly what it is. But trust me, we do not want this thing to fail, we want it to be vibrant we want it to be a force in the community and yes, we want it to be profitable in the range that is sort of the norm within the industry. Nobody’s driving it to be the most profitable.

REPORTER: We don’t really have an assurance then that next week we’re not gonna have a layoff.

GUY GILMORE: Probably not next week, no.

ROOM: But what about next year, how about next April?

GUY GILMORE: We don’t have anything, the budget doesn’t have anything built in like that, no the budget — I mean, there is — it doesn’t sound good, but there’s a momentum that has been created, a financial momentum that is gonna carry though. I think it’s fair to say, Joseph, wouldn’t you? That it’s gonna carry, we think, is gonna carry us through this upcoming fiscal year July through June. And that’s a good thing.

And we haven’t talked about this much, it came up in the manager’s meeting but there is the  — you see it in the New York Times, the foremost practitioner, but you’re seeing the revenues shift in this business in a significant way. Bill and circulation this year will do more revenue this year than advertising. That’s a first. But the beauty of that is that circulation revenues sustain much better year to year at this stage of the game than does advertising. So your core advertising dollars are gonna fall, let’s say 15 percent — those numbers will fall two or three, two? Some circ departments are flat. And what that means is that the combined revenue stabilizes.

Fact Check
Ken Doctor has said DFM has calculated how long it takes loyal subscribers to stop their subscriptions due to diminished content, and the company has factored that “lag time” into its revenue projections. That’s in addition to raising subscription prices.

[Discussion for about an hour of advertising vs. circulation, paywall, subscribers and other business details… At the end, newsroom Guild chair Kieran Nicholson read a statement.]

REPORTER: Guy, I apologize I didn’t introduce myself earlier. I’m Kieran Nicholson. I’m a reporter, I’m the chairman of the newsroom unit of the Denver Post, and please just indulge me with a brief statement on behalf of the newsroom unit.

“The Newsroom unit of the Denver Newspaper Guild has no confidence, no trust, and no faith in Alden Global Capital as owner of the Denver Post, the newsroom has no confidence, no trust, and no faith in Digital First Media’s operating practices.

“Years of job cuts and budget cuts along with a diminishing product and subscriber base has led us to this unfortunate state. Again, the newsroom unit of the Guild demands that Alden sell the Post and its other Colorado properties to a local owner or a local ownership group. The Guild is confident that legitimate offers have already been made and the only thing standing in the way of the sale is greed. Sell us now so that a new owner can fortify the Post, something that Alden and DFM have failed to do. Sell us and the paper can continue its longstanding journalistic mission and serve the Colorado community to the best of our abilities.

“Sincerely, Newsroom Unit, Denver Newspaper Guild.”