Sixty35 Media – Status FAQ
What’s your situation?
On March 15, Sixty35 Media LLC initiated a “reduction in force,” eliminating nearly half our employee positions as a major step to tackle a $300,000 financial shortfall.
How did you get here?
- COVID hit us hard. We lost a huge number of advertisers as businesses were shuttered and we went into lockdown. We decided to keep producing the paper even without advertising income. We should have reduced our workforce. Instead, we stayed fully staffed; the Colorado Springs Independent’s owner and founder John Weiss gave financial help and staff took an across-the-board pay cut. Financially, we suffered a substantial loss.
- As we came out of the COVID crisis, we negotiated lower advertising prices and even gave away ads to help local businesses get back on their feet. We extended our payment deadlines for those who were still struggling.
- Over the next year, printing and paper prices skyrocketed, more than doubling our cost of production. Instead of cutting staff, we gave incremental raises to employees we were in danger of losing if we didn’t accommodate the rising cost of living.
- Instead of closing when John Weiss retired in August of 2022, the company reduced the number of publications, combining them into a single news magazine so that the region would continue to have a local, independent newspaper. Colorado Publishing House, the umbrella company at the time, converted to a nonprofit to generate additional revenue streams through donations, memberships and grants. We rebranded at the same time. Unfortunately, this created market confusion and wait-and-see apprehension amongst our advertisers. We also lost several key salespeople at the same time.
- A small volunteer board of directors (separate from the editorial board) was formed to run the nonprofit. The board, comprised of business and journalism professionals, faced the arduous job of working with an attorney to draft all documents for the transfer of assets for multiple companies. This was an intense 60-day process that took attention from day-to-day business operations.
- On Oct. 28, 2022, John Weiss transferred all assets and liabilities to the nonprofit, along with a sizeable cash donation. Assets and liabilities were loosely documented with the intention that full documentation would take place over the next few months. The company was losing ground financially and the cash contribution was depleted quickly, but the board was not aware of the severity of the situation. Here’s why.
- The nonprofit’s bylaws required a firm separation between the board and operations. This is fairly standard in nonprofit organizations — but because our transition involved scaling back several businesses and closing others, that separation had a devastating effect. The board relied on reports from the officer in charge, but the officer in charge did not receive correct reports from the business office. Combining decades of information from individual businesses into one system overwhelmed the business office and the board received inaccurate reports.
- The switch to nonprofit was far more complex than anticipated. Staff was stretched too thin and while the board knew the company was financially stressed, it was not until Feb. 6, 2023 — when the board was forced to take over operations due to the resignation of the publisher — that it began to understand the real scope of the problem.
- A financial consultant was hired to evaluate the books and provide an accurate assessment. At first, the consultant couldn’t get the figures needed because data had been incorrectly entered into bookkeeping systems, which meant full and accurate reports couldn’t be compiled.
Where are you now?
- For the past six weeks, the board has researched and restructured the organization’s financial records. The outcome is as follows:
- Payables: We owe just under $300,000.
- Receivables: We have $283,000 to collect.
- Advertising sales are increasing but advertisers experiencing brand confusion are only now beginning to embrace the new publication.
- Collections have been difficult because local advertisers are still recovering from COVID. But we need to collect outstanding invoices quickly.
- With no quick way to increase revenues and no other way to cut costs, along with the need to responsibly pay the company’s bills, the board made the incredibly difficult decision to reduce staff.
- Starting April 1, the company will have gone entirely remote, except for a small anchor office and some storage space. To reduce our operational costs by about $100,000 a year, staff will leave the iconic building that has been our home.
- The paper is being redesigned to reduce production costs while recovering basic brand identity markers.
Is this enough to create a sustainable future?
Yes. With these changes, we can responsibly pay our debts, retain valuable long-term local relationships and live our mission. Key elements of our plan include:
- Urgently collecting outstanding debt from advertisers;
- Working with a newly retained grant writer to initiate and grow our grant base;
- Expanding marketing awareness through a plan that includes print, electronic media and social media; and
- Establishing a 2,500-person membership base with a goal of growing it to 10,000 members over the next three years. To sign up, visit sixty35media.org/join
You’re nonprofit, so what happens with the money?
To survive this crisis, we’re counting on collections and donations to cover a substantial amount of our outstanding debt. But to be the best newspaper for Colorado Springs, once the nonprofit’s debts are paid, we’ll hire more staff, expand our reporting, and bring more events and services to our community.
We’re asking you to:
- Become a member — and ask 10 people you know to become members (sixty35media.org/join).
- Share our donation page (sixty35media.org/donate).
- Read the paper and tell us what you think — we’re listening.
- Come to our events (calendar.sixty35.com).
- Be patient — it’s a long road.
Together, we can build the city we want to see.