WASHINGTON - Justice Department lawyers recommended Friday that Attorney General Janet Reno approve the proposed joint operating agreement between Denver's daily newspapers.
Reno will make the final decision on the proposal to merge the business operations of the Denver Rocky Mountain News and the Denver Post.
The E.W. Scripps Co., whose subsidiary publishes the Rocky Mountain News, and the Media News Group Inc., whose subsidiary publishes the Post, asked the Justice Department to approve the plan May 12. Scripps sought a truce in the two papers' war for readership after the News lost more than $120 million during the 1990s.
''We're gratified that the (department's) antitrust division has recommended approval of our application in Denver,'' said Tim Stautberg, vice president of communications for Scripps.
''It's great news to protect two editorial voices into the future, while protecting jobs on both sides,'' said Tom Botelho, the Post's vice president for marketing.
Lawyers for the Justice Department's antitrust division found that the News was in danger of failing, meaning it qualifies for a joint operating agreement under a 1970 federal law. The Denver proposal was the first request for a newspaper JOA since 1990.
Reno's decision will come after a 30-day public comment period, which starts after the antitrust division's ruling is made public. The ruling was sealed Friday to allow the Post and News time to seek confidentiality for some financial information.
The Post has sought to keep most of its business records private, arguing that it does not have to open its books to public scrutiny because it is not the newspaper in danger of failing. Stautberg said Scripps would not object to making its financial information in the recommendation public.
Botelho said Post officials had not finished their review of the recommendation to decide if the paper would ask to have any portions kept secret.
Although the newspapers would share profits under the 50-year deal, both would keep separate newsrooms and publish separate editions during the week. Weekend editions would be published under a joint masthead, with the News publishing on Saturday and the Post taking the more lucrative Sunday paper.
Executives of both papers have said they do not expect job cuts in the newsrooms, but layoffs are possible in other areas. The News has 1,785 employees, while the Post has 1,870. Unions at both papers have endorsed the plan.
The Denver newspapers had fought a vigorous circulation war for more than a century. The Post switched from publishing in the afternoon to publishing in the morning in 1984 to face the News head-on. By the 1990s, the newspapers were slashing subscription costs to the point where the News was selling papers for a penny a day.
By the time the papers sought peace, the News had a daily circulation of 446,465 and a Sunday circulation of 552,085, compared with the Post's 413,730 daily and 558,560 Sunday.
Despite the edge in circulation, the News lost $123 million in the past decade and was in danger of being shut down. The Post, on the other hand, made $200 million during the 1990s. ---
On the Net:
Denver Post: http://www.denverpost.com/
Rocky Mountain News: http://www.rockymountainnews.com/
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