'Tribune' is Gone -- But Scripps Still Sharing Profits in Albuquerque.
With the folding of the Albuquerque Tribune Saturday and the end of the nation's oldest joint operating agreement (JOA), E.W. Scripps no longer publishes a paper in the city -- but that doesn't mean it will no longer profit from a newspaper there.
In a Securities and Exchange Commission (SEC) filing that received almost no attention outside of Albuquerque, Scripps disclosed that it will continue to share profits from the Albuquerque Journal, even though it no longer is in a JOA with the Journal's parent company, the family-owned Journal Publishing Company.
In an earnings announcement and an SEC filing last October, Scripps disclosed that it had reached an agreement with Journal Publishing to retain its approximately 40% stake in Albuquerque Publishing Company, G.P., the business unit that had been the JOA for the Journal and the Tribune.
"The Partnership will direct and manage the operations of the continuing Journal newspaper and we will receive a share of the Partnerships' profits commensurate with our residual interest," Scripps said in the 8K report.
And while the JOA had an expiration date in 2022, this arrangement is apparently open-ended.
The agreement appears to be unique in the history of discontinued JOAs. Perhaps the closest parallel was the deal struck between Newhouse Newspapers and Pulitzer Inc. in 1983 when Newhouse announced it was closing the St. Louis Globe-Democrat, but would continue to be a 50% owner of the JOA that also published Pulitzer's St. Louis Post-Dispatch. That agreement had provisions that could have extended the Newhouse profit participation into the 22nd century, but in 2001, Pulitzer made a one-time payment of $306 million to buy out all but 5% of Newhouse's stake.
Scripps spokesperson Tim Stautberg said the Albuquerque agreement is really nothing new.
"We've had this partnership in Albuquerque ... since the 1930s," he said. "To the side of this partnership was the joint operating agreement as well. What we've done is closed the Albuquerque Tribune and ended the JOA, but we continue to maintain the partnership interest, the minority interest, in the Albuquerque marketplace. Although it's expressed in the 8K as a new agreement, we've always been minority partners, and we are just keeping that residual interest."
When Scripps announced last August that it would fold the Tribune if it could not find a buyer for the paper, it also said that the Albuquerque JOA, the nation's first when it was created in 1933, would cease if the paper were sold or closed.
That was another factor in making the Tribune unattractive to a buyer, which would have had to build from scratch the production, business, and distribution operations handled by Albuquerque Publishing. The afternoon Tribune had been in decline for years, sinking from about 40,000 circulation in 1988 to just 9,944 in its last Audit Bureau of Circulations report.
****This story has been corrected to reflect the fact that Scripps disclosed the Albuquerque Publishing partnership agreement in an announcement and SEC 8-K report prior to the 8-K earnings report filed with the SEC in January.
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|Publication:||Editor & Publisher|
|Date:||Feb 25, 2008|
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