DENVER — About 80 businesses, led by American Furniture Warehouse owner Jake Jabs, plan to pull advertising from Denver’s two newspapers to protest rising advertising prices. And Jabs said he plans a federal lawsuit to stop the joint operating agreement between the papers.
The Rocky Mountain News and The Denver Post completed a JOA in January, and the newly formed Denver Newspaper Agency is handling business affairs for both. The agency already has signed more than 650 new advertising contracts, as expected, said spokesman Jim Nolan. The new arrangement starts the weekend of April 7.
Before the JOA, the papers competed to offer some of the lowest ad rates in the country for metropolitan dailies. The new rates are nearly 300% higher.
Argonaut Liquors store owner Scott Robinson said space that cost $600,000 last year would eventually cost $1.5 million under the new terms. He hasn’t pulled his advertising, but hasn’t signed a new contract either.
The newspaper agency contends rates are comparable with those around the country.
Jabs, who has threatened to sue over the JOA in the past, said his latest threat follows failed rate negotiations with the agency.
He said the papers’ owners haven’t proven that the News was failing financially, the premise for winning then-Attorney General Janet Reno’s approval of the deal, which allows the papers to split profits.
Dean Singleton, chairman of the agency and publisher of the Post, said Jabs benefited from competition between the papers, which sometimes sold advertising at below-cost rates.
(Copyright 2001 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.)