Bob Bernick's Notebook: A Warning Sign for Utah Journalism?

I read with amazement this past week the two newspaper stories about how the owners of The Salt Lake Tribune sold to the LDS Church/Deseret News their share in the relatively-new West Valley City presses and several downtown real estate properties.

Political insiders should really pay attention to this.

For it is not just a convenient business move by the Trib owners, as both newspapers reported.

It could have long-term affects on how Salt Lake City and state politics/reporting plays out in the coming years.

There is a lot of history, some pleasant, much not, between the DN/LDS Church and the various owners of the Tribune.

The two papers’ futures were wedded back in 1952 – the year of my birth, but more importantly the first contract that set up the old Newspaper Agency Corp., or NAC.

NAC, which is now called MediaOne, was and is a joint operating agreement – allowed under federal antitrust laws – where the two papers split profits (if I remember correctly, 58 percent for the Trib, 42 percent for the DN) and jointly own and operate the modes of production – printing, advertising and distribution.

Much later e-editions of both newspapers were linked into a renewed agreement.

The Trib is basically owned today by a hedge fund, although one or two intermediary corporations fall between the actual control and newspaper production.

But as many old-timers remember, for decades the Trib was owned and run by the Kearns/McCarthy extended family – way back to the early 1900s when former U.S. Sen. Thomas Kearns secretly bought the newspaper after its editors were giving him a hard time politically.

Anyway, Trib and DN lore are part of my family, as well. My late father, Robert Bernick Sr., was the business editor of the Trib in the 1950s and 1960s. He kept in touch with old friends at the Trib (and even the DN) and growing up I was always hearing insider stories of Salt Lake newspapering.

I started work at the DN as the city desk secretary in 1976, worked there until May 2010 when I left after 25 years as the political editor. (UPD publisher LaVarr Webb, and old friend and mentor at the DN, took pity on me and allows me to write for his newsletter today.)

The Trib was Utah’s “independent voice,” a nice way of saying it wasn’t controlled by the LDS Church or any other special interests (although in reality every newspaper has some sacred cows, some are just more obvious than others’).

It had a larger circulation, increasingly during the last half of the 20th Century because people wanted a morning paper, not an afternoon like the DN.

The huge challenge at the DN during much of my early time there was getting the Trib to allow the afternoon paper to publish in the morning – as the NAC contract provided for under certain circumstances.

Great battles and intrigue behind the scenes and at NAC over that one.

Part of the morning publication dream of DN leaders in the 1990s and early 2000s was to somehow gain control of NAC.

You see, John Gallivan, a member of the Kearns family, had been publisher of the Trib and chairman of the NAC from 1960 into the 1980s. Even after Gallivan “retired,” he still had great influence at the Trib, being board chairman until the mid-1990s. (The downtown Gallivan Center is named after him – and Gallivan was much loved in the city.)

The post-Gallivan Trib bosses threw up road-block after road-block, stopping the DN from going morning. (I know I’m seeing this from one side, the News’, but that really was the case.)

Then the Kearns/McCarthys sold out to TCI, Tele-Communications Inc., in a deal that brought a lot of cash to the families – and to longtime Trib employees whose retirement accounts were in the privately-held Tribune stock.

Suddenly, more than a few old-timers at the Trib were millionaires. Good for them. Many were my friends.

TCI was then sold to AT&T – the telephone giant that really didn’t want to own a newspaper.

And after trying this and trying that, AT&T sold the Trib to Dean Singleton and MediaNews Corp., a chain of newspapers, most of them small dailies or weeklies. The Denver Post was the flagship and Denver Singleton’s home.

Now the DN had someone at NAC they could deal with. And soon the DN went morning. Much joy in the DN news room.

The newspaper wars in Salt Lake City settled down – especially in the papers’ boardrooms.

But then like every other American newspaper, financial bad times hit hard for the Trib and DN nearly a decade ago.

The web took over classified ads and other kinds of advertising, the bread and butter of all newspapers.

Circulation and subscriptions barely covered distribution.

Advertising paid the staff and most other costs.

The newspaper industry started hemorrhaging cash.

MediaNews’s debts forced it to give up control to a hedge fund that had heavily invested in it.

In 2010 the DN laid off 48 percent of its staff and started a new newspaper model – trying to appeal to LDS readers and others interested in stories about faith, family and so on.

Layoffs came haphazardly to the Tribune; but this summer reality caught up and 20 percent of the editorial staff was let go – many friends and fine colleagues lost their jobs.

Now comes the news that the hedge fund is selling off the presses and other MediaNews real estate to the LDS Church.

What DN bosses always dreamed of – but could hardly hope for – ownership of their means of production, complete control of the printing and distribution, has been realized.

Because of earlier agreements with MediaNews, as of today the LDS Church/Deseret News owns the presses the Tribune is printed on, owns the old Tribune Building on Main Street (if the church hasn’t already sold it), owns the old NAC land off of Fifth South and owns the West Valley printing buildings, as well.

It is a complete sweep of all but the Tribune’s actual newsgathering operation.

Gallivan must be turning in his grave, to see his beloved Tribune come to this.

MediaOne, as NAC is now called, was the golden goose of the Tribune (if any newspaper asset these days can be called a golden goose).

Sources inside both newspapers tell me MediaOne is actually making money – it prints not only the Trib and DN, but several other local newspapers, the regional edition of the New York Times and various other publications.

Newspapers themselves may still be hurting, but MediaOne is generating cash.

One angry sentiment at the Trib, sources say, over the latest layoffs was that while the Trib was breaking even or losing but small amounts of money as a separate entity, when one took in the paper’s 58 percent share of MediaOne profits, together the whole operation was making money. So why the layoffs?

Assuming the former paragraph is true, now that the hedge fund has sold the presses and real estate to the church, the Trib stands alone – no longer having the 58 percent cash backup of MediaOne. (Bosses at both newspapers admit that the old 58-42 percent profit share was changed in the sale, but won’t say what the new split is.)

Thus, the events of this week mean a financially stronger DN, a weaker Tribune.

Will the Trib be able to pay future printing and distribution costs?

Will it shrink to printing just a few times a week?

Or will it have to become an online newspaper only, with the Trib keeping all of its online profits?

(Part of this week’s deal is that online editions of the Trib and DN will become separate of any MediaOne shared operations.)

Without MediaOne’s back-up cash flow, will there be more layoffs at the Tribune? (Current editors say no, but can’t pledge for the future.)

Finally, what will ultimately happen to Utah’s “independent voice?”

Certainly, The Salt Lake Tribune selling its share of its own presses can’t be a good sign for those who want aggressive newspaper competition in Utah.