Deal in Denver

Into Denver's mile-high sunshine last week stepped the fastest-growing newspaper publisher in the U.S. In one hand he carried a battered 13-year-old briefcase bulging with the blueprints of a big deal. Within 24 hours Publisher Samuel I. Newhouse, 65, left Denver with what he had come for: a 15% cut of the Denver Post (circ. 256,513), plus definite expectations of ultimately gaining full control.

Newhouse is a publisher who has devoted himself less to the profession of journalism than to the buying of newspapers as business properties. Beginning with the Staten Island (N.Y.) Advance in 1922, he has spent 38 years and $50 million building an empire of 14 papers with a circulation totaling 2,000,000*-- ranking second in importance in the U.S., ahead of the dwindling Hearst chain (down to 13 dailies from a high of 26) but behind Scripps-Howard (18).

"Buy?" "Sure." Newhouse has collect ed these newspaper properties as another man might collect sculpture. In 1939 he paid $1,900,000 for two Syracuse papers after a single telephone call from a broker. Says Newhouse: "He called and said, 'Do you want to buy Syracuse?' And I said, 'Sure.' " Newhouse paid $5,250,000 -- cash -- for the Portland Oregonian without ever seeing the plant. Newhouse's cash re serves are so plentiful, his acquisitiveness so indefatigable, that last year he bought a $5,000,000 controlling interest in Conde Nast Publications, which publishes Vogue and five other magazines, as a surprise anniversary present for his wife Mitzi.

Once having purchased a paper, Newhouse is interested mainly in making it pay -- as 12 of the 14 Newhouse papers do. Editorial policy and the practice of journalism are matters he leaves to his editors, who do not even have to carry his name on the masthead and are free to endorse any cause. Says Newhouse: "It may be temperament, it may be inclina tion, but I will not interfere with my editors, or with local affairs." The Bir mingham News is rabidly segregation ist; in Syracuse, the Democrat-leaning Herald-Journal and the Republican Post-Standard carry on a constant editorial feud.

Sam Newhouse likes to be a bit off handed about his press purchases. Ex plaining that his son Donald, who is pub lisher of the Jersey Journal (circ. 93,998), also oversees Newhouse papers in Birmingham and Huntsville, Ala. and in Portland, Ore., Newhouse says of his Post deal: "Denver makes a nice stop on the way from Alabama to Portland." Be that as it may, Sam Newhouse picked up a slice of a famed newspaper.

Inimitable to Dependable. A struggling frontier-town daily until 1895, when it was bought by Harry H. Tammen, a onetime Denver bartender, and Frederick G. Bonfils, who reaped an $800,000 fortune by fleecing Kansans in a lottery, the Denver Post bloomed under their cultivation into the wildest flower in the Wild West. Its front page was a crazy quilt of blaring headlines, many in red ink, and along the order of DOES IT HURT TO BE BORN?

Despite an impressive contingent of crack newsmen--among them Damon Runyon, Courtney Ryley Cooper, Burns Mantle and Gene Fowler--the paper read like a circus flyer. For an editorial page, Tammen and Bonfils substituted invective, raked up so much scandal--a good deal of it true--that they kept a loaded shotgun in their office to discourage reader complaints. As the Post grew in power and prosperity, its proprietors branched into other fields; the Post became the first and last U.S. daily ever to own a circus (Sells-Floto), run a burlesque house and sell coal.

Such journalism was inimitable. But after Bonfils' death in 1933, the Post began to resort to the all-too-imitable. In 1946, Bonfils' heirs hired a new editor, Edwin Palmer Hoyt, from the Portland Oregonian, where he had risen in twelve years from the copy desk to publisher. Sweeping out vestigial traces of the circus makeup, Hoyt gave the Post its first real editorial page, completed the Post's conversion into a sober, dependable and stodgy newspaper.

Irresistible Offer. Bonfils and Tammen had scattered their estates among a handful of bank-administered trusts and Bonfils' two daughters, Helen and May. Lacking effective leadership, the Post, which had netted more than $1,000,000 a year under Tammen and Bonfils, fell on lean times; of late it has been paying stockholders--Bonfils' daughters and the bank trusts--less than a 3% return. This combination--low yield, diversified ownership --is just the situation that Newhouse likes to exploit. He has had an eye on the Post for five years, but paid his first visit to Denver only two weeks ago. As usual, Newhouse's offer was made in cold cash. He offered $240 a share--a total of $3,600,000--for the 15% block held by Bonfils' daughter May--now Mrs. Charles E. Stanton--an offer that Mrs. Stanton and her husband, a Denver interior decorator, found irresistible.

The transaction caught the Post itself by surprise: it was scooped on the story by the rival Rocky Mountain News. Other Post stockholders leagued to announce that Newhouse's 15% invasion was as far as he would be allowed to go. "No further sales are contemplated," said Helen Bonfils Davis firmly. "Not under any circumstances." But Newhouse had no ear for such talk. He had every reason to think that before long he would own a majority interest in the Post.

* The Advance, Jamaica (N.Y.) Long Island Press, Newark Star-Ledger, Long Island City Star-Journal, Syracuse Herald-Journal, Post-Standard and Herald-American (Sunday), Harrisburg (Pa.) Patriot and News, Jersey City Jersey Journal, Portland Oregonian, Birmingham News, Huntsville (Ala.) Times, St. Louis Globe-Democrat.

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