News-Journal does about face -- will pay outsider $2k daily to manage mighty metro during sale

DAYTONA BEACH -- ust three weeks after saying they wanted no part of an outsider chosen by their divorced minority partner to oversee the operations of the Daytona Beach News-Journal while a new buyer is sought, the newspaper's directors did an about face Tuesday and welcomed him and his $2,000 daily salary. Earlier this month, the newspaper cried foul after Cox Enterprises said it wanted an administrator appointed because it feared News-Journal ownership might squander the assets.

In a company e-mail sent 8:40 a.m. Tuesday to all News-Journal employees, Publisher Georgia Kaney said affectionately of Cox's guy, James Hopson, who is to be paid $2,000 a day by the News-Journal: "We are fortunate to have the assistance of Mr. Hopson, who has worked in the newspaper industry for more than 30 years. He holds a degree in Journalism from the University of Missouri and an MBA from Harvard University Graduate School of Business."

But on April 7, the News-Journal ran a breaking story on its Web site whining about such an arrangement, claiming the Cox request was "exorbitant and unwarranted."

Kaney's most recent "news" to the News-Journal's nearly 800 employees was not posted on the company's Web site Tuesday.

Hopson's $2,000 daily salary plus expenses, allows him to oversee "the general operation of the newspaper with full and exclusive power and authority to administer and manage the business affairs."

In essence, Hopson is Georgia Kaney's new boss as well as boss of Chief Operating Officer David Kendall, Chairman and Co-Editor Marc Davidson, Advertising Director Kathleen Coughlin, Circulation Director Douglas Davis and Editor Don Lindley.

Hopson, who started Tuesday, comes on board after the News-Journal and Cox entered into an agreement April 22 with Cox to work together to effectuate the sale of the News-Journal.

This came in the 11th hour when the News-Journal was ordered by the courts to either pay Cox $129 million for its minority shares, beginning with $29 million immediately and $10 million annually after that for another 10 years, or put the paper up for sale.

The litigation came to a head after the News-Journal lost the appeal of its appeal of a U.S. District courts verdict in favor of $129 million to Cox Enterprises.

This whole mess started in 2004 when the News-Journal, principally owned by the late Tippen Davidson, paid $13 million in naming rights for the $29 million News-Journal Center on the banks of the Halifax River, which houses his daughter Julia Davidson-Trujillo's Seaside Music Theater.

Cox learned of the $13 million in a story published in the St. Petersburg Times, which led to litigation.

The News-Journal actually went to court seeking to buy out Cox's shares, but claimed its minority partner's 47.5-percent share of the News-Journal was worth only $29 million. Cox said its shares were worth $145.3 million.

U.S. District Judge John Antoon ruled after a three-week trial the Cox shares were worth $129 million. Plus, the judge ordered the News-Journal to pay Cox's attorney's fees and the court costs.

In Monday's memo to News-Journal employees, Kaney made no mention of the $2,000 daily salary Hopson will be paid, saying generically, "To effectuate the sale of the News-Journal as
a going concern, the shareholders of News-Journal Corporation have retained James W.
Hopson to work with our management in preparing the company for sale."

In the past couple of years, the News-Journal has made a number of cost-cutting decisions during litigation, including closing its cafeteria, going to an automated telephone operator system, closing its Deltona news bureau, and last month cutting back its Dally Journal local section for Southeast Volusia readers from five days a week to three, while still keeping the "Daily" in its title.

Having to pay Hopson two grand a day plus his expenses was not something the News-Journal took in stride.

Cox wanted Hopson retained earlier this month to have direct oversight over all of the News-Journal's fiscal matters after the 11th Circuit Court of Appeals for a second time denied the News-Journal's challenge of the $129 million judgment in Cox's favor.

U.S. Magistrate Judge Karla R. Spaulding earlier this month denied Cox's request, saying it was premature, but did say there was clear "evidence that the Defendants (News-Journal) have willfully engaged in fraudulent conduct by transferring assets in violation of orders of this Court."

While the News-Journal in its April 7 published story quoted the judge, what it failed to do was elaborate on the fraud in the court record: That in April of last year, Judge Antoon said the News-Journal "willfully violated" his court order not to provide funding for any of the Davidson family's pet cultural projects, but then going ahead and wasting $780,000 on such endeavors such as Seaside Music Theater.

SMT is now behind more than $130,000 in rent to the News-Journal Center. The Taj Mahal facility is being shopped around with Daytona Beach Community College as a possible suitor.

And speaking of such a cozy arrangement, here are the results of our weeklong Insta Poll: Should publicly subsidized Daytona Beach Community College bail out the cash-strapped News-Journal Center? With 562 votes, 98% of you said "No" and 2% of you said "Yes."