Disappearing Ink | Cover Story | Salt Lake City | Salt Lake City Weekly

Disappearing Ink 

Former journalists say the decline of The Salt Lake Tribune stems from a conspiracy between the paper's corporate owner and the LDS Church

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On the 25th floor of 5 Hanover Square in New York City, no one is answering the phones.

These offices house Digital First Media, which has cast its broad net over 800 “multi-platform” media products that, the man’s voice on the message machine insists, reach 57 million Americans each month. Even so, no one appears to be home.

One of these 800 products is The Salt Lake Tribune and, like Digital First Media, the Tribune has seen better days.

In the past two years, in groups of varying size—five one month, nine another, four the next year, 19 at one time and, most recently, eight—Tribune employees have gone missing.

They rise from their desks, walk to an editor’s office and never return to the newsroom.

“People would just vanish,” says one laid-off Tribune reporter.

Layoffs at the 143-year-old newspaper have been so common in recent years that it dominates lunchroom banter, the former reporter says, and no one seems safe. Seasoned veterans with decades of experience have been let go. So have fresh faces, whose names and bylines were barely learned before they were shown the door.

“It was like The Twilight Zone. People would just be gone,” says the former reporter, who asked to remain anonymous; laid-off employees had to sign non-disparagement agreements in order to receive their severance packages.

here for a full list of those laid off from the Tribune.

It is hard to lay blame for newspaper layoffs in any one place. The economics of the paper & ink news business have been splintering for nearly a decade.

But the economic challenges at the Tribune don’t stem from troubled balance sheets alone. And no one in Salt Lake City, or even Utah, is at the controls, making tough calls while simultaneously cultivating a healthy future for the newspaper. No, Digital First and its CEO, John Paton, are calling the shots at the Tribune. And Paton answers to a New York City hedge fund, Alden Global Capital, which specializes in making money.

Those rallying behind the Tribune say that making quick cash was the main motivation behind a fall 2013 business deal between the hedge fund and the LDS Church-owned Deseret News. Along with hawking its share in the printing press, Digital First was paid an undisclosed amount for handing over 70 percent of the two papers’ print-advertising profits to the Deseret News. No one involved in the day-to-day management of the Tribune was party to these negotiations.

Digital First and Deseret News executives have said the new deal is in the best interest of both parties and by no means was meant to weaken the Tribune. But weaken the Tribune it did.

Critics of the deal say it will, at the very least, whittle the Tribune into a skeleton of a newspaper. And worse, some fear, the deal could bury the Tribune, despite its dominant readership and distribution.

Though the distribution gap has narrowed in recent years, the church’s paper has never been as widely read or distributed as the Tribune. In 2012, the Tribune’s daily circulation was 106,619 to the Deseret News’ 75,750, according to figures from the Alliance for Audited Media.

But since 1952, the two papers have been tied together through a Joint Operating Agreement (JOA), which combined the papers’ advertising and distribution operations into one entity, known today as MediaOne.

Before the deal was revised in 2013, the Deseret News received less than half of the combined profits—42 percent. The split was widely regarded as favorable to the Deseret News, since, as the smaller player, it was actually receiving a considerable cut of the profits generated by the Tribune.

The new JOA more than turns the tables. Critics say that the lopsided arrangement would be less than appealing to the kind of private buyers who’ve purchased newspapers in other cities. And even if someone wanted to take that risk, a clause in the JOA requires that the Deseret News approve any sale. Tribune supporters say that the Deseret News, which itself attempted to buy the competing daily paper in the early 2000s, nixed a 2013 effort by Jon Huntsman Sr. and former Tribune owner Dean Singleton to buy the Tribune.

These blows to the Tribune, supporters say, are more than just unfortunate business deals. A group called the Utah Newspaper Project says the JOA violates federal antitrust laws and has petitioned the U.S. Department of Justice to take a look.

But the investigation’s timeline and outcome are unknown variables. In the meantime, Utah’s largest newspaper, left to flounder with 30 percent of the print profits, could quickly crumble, leaving the state with just one daily newspaper, owned and operated by its most powerful—economically, politically and culturally—entity: The Church of Jesus Christ of Latter-day Saints.

And many vocal critics of the deal speculate that that’s exactly the plan.

“This was no spur-of-the-moment decision on the Deseret News’ part,” says Jay Shelledy, who was editor of the Tribune from 1990 to 2003. “Nobody wants to be seen as putting a gag in anybody’s mouth, or taking them out and doing away with them, so this is a much cleaner way to accomplish that.”

PINK SLIPS
Current Tribune Editor and Publisher Terry Orme began his career at the paper in 1977 as a copy boy. Copy boys were the Internet cables before there were Internet cables, moving pieces of paper from reporters to editors and on to more editors, and finally to the typesetters.

TERRY ORME, TRIBUNE EDITOR & PUBLISHER SINCE FALL 2013 - BY NIKI CHAN
  • BY NIKI CHAN
  • TERRY ORME, TRIBUNE EDITOR & PUBLISHER SINCE FALL 2013


“On a good day, they might let you take a story—take dictation over the phone—and you might go out and get sandwiches for people,” Orme says.

Orme wasn’t a copy boy for long. He became a features writer and arts writer and covered film for a decade before becoming assistant managing editor. In this post, he oversaw coverage of the 2002 Winter Olympics. He then rose to the position of managing editor before taking the top job Oct. 1, 2013, replacing Nancy Conway, who retired after learning Digital First would be mandating deep staff cuts at the Tribune.

With 19 employees walking out the door with pink slips, Orme took the reins at one of the rockiest times in the paper’s history. And things soon got worse.

Three reporters received cryptic, handwritten notes that read: “Church and John Paton are renegotiating JOA. Tribune will be left with very little. Deal is Tribune interest for cash.”

“That note certainly got everyone going,” Orme says.

Neither Orme, nor Conway, had been aware that the business side of the Tribune was about to be drastically altered. Orme says he doesn’t even know in what city the negotiations took place.

Along with dissolving the Tribune’s interest in the printing press and shifting the profits, the new JOA, consecrated Oct. 18, gives the Deseret News a three-to-two majority on the board that runs MediaOne. It also requires that the Deseret News approve any sale of the Tribune, a clause that has been characterized as nothing short of veto power.

For the presses, the profits and the majority stake on the board, an undisclosed amount of cash changed hands. Orme declined to discuss this sum, but says the deal was one large package, meaning there wasn’t a particular price put on the Tribune’s projected future advertising revenue, and another for the presses.

“It was one big deal,” he says. “It involved everything.”

This leap away from printing presses is consistent with Digital First CEO John Paton’s business philosophy, Orme says.

“His strategy is to get rid of those legacy assets and those legacy liabilities,” he says. “And just move to the future, which in his mind is a purely digital future.”

But with print still making up a majority of newspapers’ revenues, Conway wonders if print simply hasn’t died as quickly as newspaper owners thought it would.

No one, least of all serious newspaper editors and publishers, believe they can simply rest on the laurels of proud print products to survive. But an awkward truth in this world is that the revenues derived from printing a newspaper are still massive compared to Internet money.

“My sense is that the entire industry has tried to lay print to rest before it’s ready to die, and I see that as a mistake,” Conway says. “I think the revenue most places still comes from print—most of the revenue—and that’s why the new split hurts the Tribune so much.”

The revisions to the JOA, Paton has been quoted as saying, are “important to The Salt Lake Tribune’s continued success and are consistent with our strategy of controlling our digital future while limiting our exposure to legacy costs and practices.”

Paton, who didn’t respond to multiple phone calls and e-mails seeking comment for this story, keeps a personal blog in which he doesn’t hide his distaste for legacy products and assets, which include the Tribune’s newspaper and printing presses.

Three years ago, in its quest to rid itself of legacy liabilities, Digital First unleashed an effort to separate its newspapers’ digital products from the print editions. The effort was coined “Project Unbolt.”

Heading this project was Steve Buttry, Digital First’s transformation editor and the only person from Digital First who responded to requests for an interview.

Buttry says Digital First’s efforts to contain the annual advertising revenue losses that climb into the high single digits were as robust as any other media entity in the country. The severity of these losses, Buttry says, requires an “aggressive response.”

He says the decline in print advertising revenue is “stark and undeniable and unprotectable.”

“You can’t react timidly to that sort of a loss to your primary revenue stream,” Buttry says, adding that he doesn’t feel Digital First’s handling of the newspaper revenue quandary has been too aggressive.

But going all-in on digital hasn’t paid off for Digital First.

In April, Paton announced the shuttering of Project Thunderdome, a newsroom with 50-plus employees in New York. Created three years ago, Thunderdome aimed to create national stories on a variety of topics for its smaller papers across the country.

In addition to closing Thunderdome and laying off many of those employees, Digital First asked its army of newspapers to lop 10 percent from operating budgets. This led Orme to lay off eight employees. In addition, the Tribune ceased publication of its Faith section, which debuted in 1992 and was widely praised.

In a story for the Nieman Journalism Lab at Harvard University, media critic Ken Doctor wrote that with the closure of Thunderdome, Alden Global Capital is most surely readying its vast newspaper assets for auction.

And even Buttry, the man in charge of helping Digital First’s newsrooms “move further, farther and faster down the digital path,” as he says it, received a pink slip just before speaking with City Weekly.

INDEPENDENT VOICES
Joint Operating Agreements were formed to ensure that rival newspapers competing in the same market could survive and even thrive. In essence, the agreements allow pairs of newspapers to collude and be exempt from federal antitrust laws. This allows the papers’ business departments to consolidate and focus on making money rather than undercutting each other into oblivion.

For a long time, this worked. Papers with JOAs thrived, while other papers struggled; many closed, including several in Salt Lake City.

At the height of their popularity, nearly 30 JOAs, by some estimates, were in place across the country. According to Rick Edmonds at the Poynter Institute for Media Studies, only six JOAs remain.

Two high-profile collapses of JOAs have occurred in the past decade. One involved the Rocky Mountain News, which folded in 2009, ceding all power to its partner, The Denver Post, which is also owned by Digital First.

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The second was the implosion of the Seattle Post-Intelligencer, which in 2009 shuttered its printed product but still operates a leaner online operation. The Seattle Times, its JOA partner, survived.

The difference in Utah—and in many people’s minds, it is a massive difference—is that if the Tribune were to fold, the surviving paper would be owned by a powerful religious institution.

As it’s blazed a disruptive trail across the changing media landscape, the Deseret News has morphed from a community newspaper into a publication that proudly and publicly focuses on stories about religious values.

On its website, the Deseret News states that its “mission is to be a leading news brand for faith- and family-oriented audiences in Utah and around the world.”

The first step in this direction came in 2010, when the Deseret News laid off 85 employees, a full 43 percent of its staff, and began publishing pieces by LDS Church public-affairs employees and citizen journalists to fill the void.

This new model has served the brand well in the digital realms with its large, built-in Mormon audience that increasingly seeks out news to its liking. Gilbert, the paper’s CEO, lays it out in a video on the website, saying he wants the paper to be a “voice that you can trust, that shares your perspective and brings the world to you.”

In other words, Conway says, the Deseret News is “news with a view. It’s outside the standard practices of news organizations, and it’s really seen as the voice of the church.”

Joel Campbell, an associate professor of journalism at Brigham Young University who worked at the Deseret News for 15 years, says the paper’s blunt stance on covering news from its own religious angle raises serious questions about its value as a community newspaper.

Utahns, Campbell says, need their newspapers covering local issues and local government—like city hall, the state legislature and elected officials such as the scandal-ridden former Utah Attorney General John Swallow—not necessarily national and international religious-liberty issues.

“To me, [local news] is a lot more important, and there’s not as many people watching that,” he says.

Much of what the Tribune does, Campbell says, involves going to court with the government over open-records requests—an often thankless and costly process undertaken so that Utahns know the business being conducted on their behalf.

“It’s always been a very strong, strong investigative watchdog newspaper,” Campbell says. “I’d hate to see it go. It would be a bad thing.”

Conway says she doesn’t fault the Deseret News for staking a claim to its broad and devoted church audience. But because the church’s paper has made its intentions clear, she says, the importance of preserving an independent voice is paramount.

“I think The Salt Lake Tribune is seen as a social necessity,” Conway says. “It is a counterpoint—a balance—to the very powerful voice of the church. It needs to survive; it needs to stay strong.”

Deseret News CEO Clark Gilbert noted in a letter published in his paper in April that the Deseret News is “committed to the market’s demand for multiple editorial voices, and the amended JOA upholds that commitment.”

Critics of the new JOA, however, say these comments don’t square with reality.

How taking revenue away from the Tribune could be good for it is “sort of a head-scratcher,” Conway says. “The new JOA split speaks to something other than that, doesn’t it?”

Former Tribune Editor Jay Shelledy, who is currently a professional-in-residence at the Manship School of Mass Communication at Louisiana State University, calls a Tribune-less world a “scary scenario.”

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“In any situation where there’s a quasi theocracy ... any state where it’s politically or religiously dominated, an independent voice or a countervoice for that matter, is critical to the survival of diverse thinking,” he says.

Shortly after Orme made the latest round of layoffs in April, the renegotiated JOA and its possible consequences began to pick up press. Springing from this exposure was the website SaveTheTribune.com. Formed by Sen. Jim Dabakis, D-Salt Lake City, it includes a petition urging the Department of Justice to follow through with its investigation and, in Dabakis’ words, “stop the impending death of the S.L. Tribune.”

At press time, the petition had garnered 13,149 signatures.

HARD SELL
Aside from the pure belief that journalism is important to democracy and that the Tribune is a valuable alternative to check the powerful interests of the LDS Church, there’s little to support a sound financial argument for owning the Tribune. In the past decade, the paper has transitioned from owning its 90-year-old digs on Main Street to paying for rented space at The Gateway shopping center, and from owning interest in the printing press to, in essence, paying the Deseret News to produce its product. And then there’s the revised Joint Operating Agreement hamstringing current and future revenue.

“What makes the paper not worth very much is this JOA itself,” says Joan O’Brien, a former Tribune reporter.

Dominic Welch, who was the Tribune’s publisher from 1994 to 2002 and a 37-year Tribune employee, says it’s hard to envision what future exists for the paper.

“They sold the Tribune building, they sold the plant,” Welch says. “Now they just got a bunch of reporters sitting in a rented room, and they’re laying off reporters.”

Another hurdle exists in any future sale of the Tribune: the stipulation in the JOA that requires the consent of the Deseret News. This clause first appeared in the JOA in 2001, shortly after Dean Singleton, then chairman of MediaNews Group Co., purchased the Tribune.

Singleton didn’t return calls seeking comment.

“We don’t know how often that’s been used,” O’Brien says of the church’s veto power.

O’Brien, daughter of the late Jerry O’Brien, who was publisher of the Tribune from 1983 to 1994, has asked the U.S. Department of Justice to look into the legality of the new JOA, and has formed a website, UtahNewspaperProject.org, that advocates for the survival of the Tribune.

O’Brien says that she and at least two other people close to the Tribune have been interviewed by investigators with the DOJ.

In her letter to the DOJ, O’Brien says the Deseret News vetoed an attempt in 2013 by philanthropist and business magnate Jon Huntsman Sr. and Singleton to buy the Tribune from Alden Global.

Huntsman declined to be interviewed for this story, saying through a spokeswoman that he is “sensitive to the ongoing DOJ investigation and would rather not talk to anyone until such a time as he feels it would be appropriate to do so.”

Although the Deseret News’ official position has been that it doesn’t want to own the Tribune, once upon a time, it did.

A garbled legal battle that began in the late 1990s and spilled into the new century involved three potential buyers for the Tribune, which had been owned by the McCarthey family for more than a century before it sold the paper to Tele-Communications Inc., which was in turn gobbled up by AT&T.

The latter had no interest in owning the Tribune, and the boardroom scrum that ensued involved the church, the McCarthey family and Singleton all vying to own the paper.

In the end, the church’s efforts never materialized. And, according to a Tribune story from 2002 documenting the ownership struggle, AT&T went with Singleton’s $200 million offer over the $180 million posted by the McCartheys.

Thomas McCarthey, who worked at the Tribune for 30 years and was co-editor with Shelledy, says his family is “moderately interested” in once again owning the paper. But he doubts the church would approve a sale to his family, and says the Tribune’s share of profits makes owning the paper “not enticing at all” from a financial standpoint.

“I’m just hoping the Tribune can make it for a little while, even the end of the year,” McCarthey says. “They still bring in more revenue than the Deseret by far—and the bigger circulation. But when your hands are tied at 30 percent … business-wise, it’s not that lucrative of a proposition. It would be strictly to have that independent voice.”

If the Tribune ends up in the hands of a wealthy local such as Huntsman or McCarthey, the paper would have come full circle from family ownership, to massive media conglomerate ownership, to hedge-fund ownership and back again to local ownership—a trip that would track closely with other large newspaper sales.

One recent example involves The Boston Globe. The New York Times Company sold the paper in 2013 to New England businessman and Boston Red Sox owner John Henry for $70 million. The sale, in which the Times took a more than $1 billion loss, made evident the vastly depleted value of newspapers.

“There is no hope for the Tribune under the present situation,” Shelledy says. “To get a local buyer is the answer, but to get a local buyer, you’re somehow going to have to unbuckle yourself from that JOA.”

CLOSE TO THE EDGE
Even though the Tribune’s employees have been culled, the paper’s supporters say it continues to provide a valuable service. But these cuts, Orme says, cannot continue.

Years of bludgeoning the newsroom, he says, has led to diminished coverage of the state’s municipalities. And the Tribune no longer has a reporter in Cedar City to swiftly cover issues in the southern half of the state.

“When do you hit that point where quality becomes a true issue?” Orme asks. “I’d say we’re getting awfully close.”

To Orme, one truth about mass corporate hedge-fund ownership has become clear: From the distance of a couple of thousand miles, and with hundreds of other newspaper “assets,” it’s impossible for a portfolio manager in some tower in New York City to make the best decisions for local papers and their readers.

“I don’t see how it is possible for somebody back in New York to have an inkling of the importance of an individual newspaper to the community it serves when you have that many newspapers and that many communities,” Orme says. “I just don’t think that’s possible. I don’t think they think that way.”

Shelledy—ever the blunt editor, but no longer concerned with offending his paper’s owner, distills what perhaps Orme means: “They don’t give a damn about anything but profit.”


See page 3 for more on digital vs. print profits, and a list of Tribune staffers who've been laid off since 2011.


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DIGITAL NON-FUTURES
The Internet, despite being a colossal and efficient mover of information, has not been kind to newspapers. Around the world, papers have struggled to sufficiently monetize their Web offerings—which are free, for the most part—while nurturing print products that people are still expected to pay for.

“Online just has not lived up to revenue expectations,” former Tribune Editor Nancy Conway says. “It seems like it won’t.”

The revenue figures at the Tribune are secret, but according to a study released in April by the Pew Research Center, digital advertising revenue in 2012 across the newspaper business was $3.4 billion, 15.4 percent of the total $22 billion in ad revenue.

From the perspective of Digital First, the decision to abandon still-robust print revenue in favor of feeble, but growing, digital revenue, has been characterized as a bold bet on this oft-discussed digital future.

Deseret News CEO Clark Gilbert is also a strong proponent of the “future of news media” moving into “digital formats” and has been praised nationally for his commitment to digital enterprises and the efforts to transition the Deseret News from a community newspaper into a national and even international trumpet for LDS and other religious concerns.

“This digital growth creates both opportunities and challenges tied to an increasing number of competitive voices,” Gilbert says in a statement he provided to KUER 90.1 FM’s RadioWest program. “It is the responsibility of news organizations to innovate and adapt to the evolving media landscape.”

Though it’s still a small portion of overall advertising revenue, all of the growth is in the digital realm. The Pew study shows that digital revenue is now three times larger than it was in 2003, while print advertising has shrunk by 52 percent.

But in the erratic, attention-deficit world of the Web, advertisers don’t see the same response to banner ads and pop-ups as they do to print advertisements, and pay less for online ads as a result. Though digital’s tripling growth sounds impressive, it’s nowhere close to making up for the halving of print revenues.

That’s why newspapers have seen 17,000 full-time jobs disappear between 2006 and 2012, and the Tribune has had a front-row seat to the carnage.

In 2006, Conway says, the Tribune’s staff hit 178, the largest it had ever been. Now, according to the staff list on SLTrib.com, there are 87 employees.

Even so, Conway says, the Tribune has managed to do more with less and continues to put out a “very strong” product.

“It’s hard to take,” Conway says, adding that staff cuts “demoralize” the remaining employees. “Nobody likes seeing good journalists walk out the door. And in these times, a lot of good journalists have walked out the door.”


Since 2011, 43 Salt Lake Tribune staffers, listed below, have been laid off. During that time, at least 47 people have quit.

Peggy Boss Barney, Copy Desk
Paul Beebe, Business Reporter
Daisy Blake, In This Week
David Burger, Arts
Jenna Busey, Sports Copy
Dorothy Chioda, Human Resources
Julie DeHerrera, Reporter
Keira Dirmyer, Copy Desk
Judy Fahys, Reporter
Paul Fraughton, Photographer
Normand Garcia, Reporter
Alicia Greenleigh, Reporter
Paul Guillory, Copy Desk
Jennifer Dobner, Reporter
Bubba Brown, Sports Reporter
Amy Shepherd, Staff
Natalie Seid, Copy Desk
Blain Hefner, Artist
Patty Henetz, Reporter
Vince Horiuchi, Reporter
Dawn House, Reporter
Keith Johnson, Photo
John Keahey, Reporter/Editor
Michael Limon, Business Editor
Nick Mathews, laid off but has since been rehired
Heather May, Reporter
Peg McEntee, Reporter
Marilyn McKinnon, Editor/Writer
Cathy McKitrick, Reporter
Donald Meyers, Reporter
Michael Miller, Artist
Lesli Neilson, Features Editor
Steve Oberbeck, Business Reporter
Ryan Painter, In This Week
Elbert Peck, Editorial Staff
Martin Renzhofer, Sports
Donald Robinson, Copy Desk
Richard Rosetta, Copy Desk
Ashley Tarr, Copy Desk
Autumn Thatcher, In This Week
David Troester, Editor
Glen Warchol, Reporter

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