Thursday's announcement by Scripps about the potential sale of the Rocky Mountain News caught MediaNews CEO Dean Singleton off guard, but negotiations between the two companies foreshadowed it, Singleton and Scripps executives say.

Scripps CEO Rich Boehne and other company executives flew to Colorado Nov. 19 to discuss with MediaNews the mounting losses at the Denver newspapers.

Singleton characterizes the message that day as Scripps saying it had "made the decision to close the Rocky as soon as practicable."

Boehne said Scripps requested the meeting.

"We came into town and said, 'Look at the numbers; look where we are. We don't believe there's an easy solution, and we intend to seek an exit.' "

That exit, Boehne said, meant exploring a sale.

Negotiations continued from that point through last weekend over the terms of Scripps' exit from the JOA.

"They made a series of proposals, all of which were rejected, and they were made aware this was a real possibility," Boehne said.

The negotiations, however, will continue, since Scripps cannot unilaterally shut down the Rocky without an agreement with Media- News, Singleton said. MediaNews has a right of first refusal to buy the Rocky, according to terms of their joint operating agreement.

Singleton said, "We would expect to end up with the JOA interest, but it would not be practical to publish two newspapers." He adds, "We will insist Scripps fulfills its obligations when it leaves Denver."

"I'm not sure there will be a long line of people to buy a paper that's losing money at a rate of $1.5 million per month," he said.

"The JOA does not generate enough profit to support two newspapers," Singleton said. "The Rocky has been dragging the agency down for four years - not because it's not a great newspaper, but because of the (advertising sales)."

The Rocky's smaller pages bring in less advertising revenue for a full-page ad than The Post's "broadsheet" pages. Singleton said The Post garners two-thirds of the Denver Newspaper Agency's advertising revenue.

In all discussions with Scripps, Singleton said, "a given was that The Post would be the surviving newspaper - it is the broadsheet and the Sunday newspaper. I'm not knocking the Rocky - it's an outstanding newspaper and a great read. But because of its size, it doesn't generate enough ad revenue."

At the same time, the Rocky sells in excess of 10,000 copies a day more than the Post, when discounted circulation is stripped out. Scripps' CEO Boehne said "The fact the Rocky is a tabloid inside the JOA has not been a drag. It's been a strong product, with the largest audience of the papers."

Singleton's MediaNews, unlike the publicly traded Scripps, is privately held. Singleton, chairman Richard Scudder, and their families own the majority.

MediaNews no longer releases financial information but entered the current downturn as one of the most highly leveraged companies in the newspaper industry. Since then, Singleton said, the company's principals have been buying back the company's debt on the open market to increase its financial flexibility.

Singleton said he believes 80 percent of the newspaper industry's current declines are cyclical - tied to the economy - and do not represent an irreversible decline brought on by other factors.

"I think we're going through a major cyclical decline and a majority of that revenue will come back when the economy does," he said. "But they're talking about a recession of two to three years."