Employees of the Denver Post joined in a protest of layoffs and firings by Digital First Media, the owner of the Denver Post and controlled by hedge fund Alden Global Trust.
The protest seeks action by Alden Global Trust to sell their ownership in the Denver Post “to someone who cares about Colorado, and they must do it immediately."
Typically, in situations like this, ownership is shifted from one wealthy person to another. What if, this time, a different path was taken and the ownership of the Denver Post is sold to its customers? What if ownership was held by the people who read the paper and advertise in it?
Recent changes in securities laws makes it possible to raise money from large numbers of ordinary people (non-accredited investors) in large amounts. It is now possible for a number of people to work together to invest in a new business or the purchase of an existing business.
Would investing in ownership of the Denver Post be a good investment? It has been reported that the Denver Post was making a profit before recent layoffs, however this information has not been verified. The newspaper industry has been in decline and many newspapers have failed and closed. A simple investment with no more than a promise of a future return on that investment may not be attractive enough for ordinary people to part with their hard earned money.
What if ownership in the Denver Post was paired with a discount on future subscriptions? The Denver Post currently reports 1,016,547 weekly readers and charges a minimum subscription fee of $104.04/year for their Wednesday/Sunday/Digital version. Would this be incentive enough to gain an investment? If all weekly readers invested $50 each for an ownership stake and a free one year subscription, it would be possible to raise $50 million toward the purchase of the Denver Post.
If the purchase of the Denver Post were crowdfunded, it would not be the first paper to be financed in this fashion. The Berkleyside newspaper, based in Sonoma County, California, raised $1 million from 355 people in order to expand, add mobile and add (not fire) reporters. Investors stated they made the investment “because they value reading about their own community and getting information that is not readily available from other news organizations.”
Would the Denver Post remain the same if it were owned by one million of its customers? Would the paper modernize, expand or limit its services, become politically moderate, go completely digital or make other major changes that would better serve the needs of the community?
Of course, it is not known whether Alden Global Trust will sell the Denver Post or what price it may ask? We will see. If they will sell, will crowdfunding become part of the solution?
Karl Dakin, CEO
Invest Local Colorado LLC