Rocky Mountain dispute

Scripps, owner of the Rocky Mountain News, has accused MediaNews Group, owner of the Denver Post, of violating their joint operating agreement. Scripps alleges MediaNews borrowed $13 million from joint operating funds to make payroll at the Post.

From the RMN:

"We request that this practice cease and that the Post find a way to fund its editorial payroll without resorting to this . . .," Scripps executives Rich Boehne and Mark Contreras wrote.

The letter was dated Dec. 9, five days after Scripps announced it would sell the Rocky and would pursue other options, including closure, if it couldn't find a buyer.

"We continue to reserve our rights to pursue remedies for the several breaches caused by these practices or to assert them in connection with any future legal proceedings," they added in the letter sent to top Post executives Dean Singleton and Joseph "Jody" Lodovic.

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The payroll issue, previously undisclosed, sheds new light on Scripps' decision to seek an exit from the Denver market and its partnership with the highly leveraged MediaNews, which owns The Post.

The companies are each losing roughly $4 million per quarter as the newspaper industry nationally continues a rapid deterioration, based on the most recent public financial filings by Scripps. The agency, which handles business functions for the two newspapers, has a $130 million bank loan that it's attempting to renegotiate.