Another shake-up hits U-T San Diego

As Republican mayor Kevin Faulconer gets set to roll out his agenda in this year's state of the city speech — including possible word about a public funding scheme for a new Chargers stadium — his chief political patron, U-T publisher Douglas Manchester, has been making some potentially unsettling news of his own.

Late Monday, the newspaper announced that its chief operating officer Mike Hodges was leaving to become president of Mindgruve, an online advertising and marketing agency that redesigned the paper's website.

“The new website allows us to improve how we deliver our content by connecting with readers in a way that coordinates with their lives,” Hodges was quoted as saying in a January 8, 2013, Mindgruve news release. “This paradigm shift is mission critical to the success of our enterprise.”

“U-T San Diego are true innovators in the digital publishing and local e-commerce space,” Chad Robley, Mindgruve's CEO, was quoted as saying. “They are writing the playbook for how to transform a newspaper into a multimedia and e-commerce company by leveraging digital channels. Other newspapers will either follow suit or risk massive erosion of their subscriber base.”

Hodges is being replaced by U-T editor Jeff Light, who will also be "editor of the newsroom," the paper reported.

“The U-T has accomplished a lot in the last five years, both in terms of business success and the quality of our products,” Light was quoted as saying. “I feel really proud and confident of our team here, so I feel like we’ve got a lot going for us, to build on the great turnaround story that we’ve had here.”

Not mentioned was last February's virtual disappearance from the operation of John Lynch, the radio entrepreneur who was Manchester's original partner in the U-T takeover from Beverly Hills vulture investing outfit Platinum Equity.

"Beginning today, Papa Doug has assigned our vice chairman and CEO, John Lynch, to focus on our [mergers and acquisitions] and bringing these deals to fruition,' Hodges said in a February 6 statement, as reported by Don Bauder.

"Papa Doug has assigned me to run our day-to-day operations," the statement continued. "Starting today, all divisions with U-T San Diego will report up through me….

"While we had a strong year in a number of areas, we did not meet our financial goals in 2013. Accordingly, there will be a restructure in our senior management team. Details will be forthcoming."

How editor Light, a former online maven at the Orange County Register, will fare in his new dual role at the U-T remains to be seen.

The abrupt power shift will likely be viewed by some with foreboding in light of Manchester's failure to dismiss a proposal by Point Loma financier and yachtsman Malin Burnham, first reported here, to take over the paper through a non-profit corporation.

"If Malin gets the necessary approvals then we will talk, but we are a long way from any type of transaction — if any will ever materialize," Manchester was quoted by his paper as saying in September.

Said Burnham: “I don't have a deal, I don't have a handshake, but he knows what we're doing, and he has encouraged us to go ahead with our IRS application.”

The U-T has historically played a king-making role in San Diego politics, and any change of control would have the potential to disrupt the reelection hopes of its current favorite, incumbent mayor Faulconer, on whom Manchester has bestowed favorable coverage and much financial largesse.

Burnham, on the other hand, supported Republican-turned-Democrat Nathan Fletcher for mayor, who in turn was politically savaged by Manchester, his paper, and his allies in the GOP Lincoln Club.

The state of Manchester's finances have long been a subject of local speculation. After years of delay in the groundbreaking of a much-hyped convention hotel in Austin, Texas, the publisher borrowed $295 million from troubled-asset mogul Thomas Barrack in late October, records show.

And the U-T publisher continues his legal battle against paying a $477,070 judgment awarded by a federal court in Texas and upheld on appeal in April against La Jolla's Manchester Financial Bank.

Manchester executives argue the bank never got off the ground and hence does not have to pay a computer service vendor for prior services rendered.

On December 30, U.S. magistrate judge Karen Crawford ordered Manchester Financial Group vice chairman and president Richard Gibbons, a onetime principal in the bank, to show up for a debtor’s examination.

The grilling is appropriate, the judge ruled, because the Manchester Financial Group "has been inextricably linked to the Judgment Debtor's business affairs and finances from the inception of Judgment Debtor's existence."