Filings detail owners of The Dakota Scout and Argus Leader

Legal newspaper designation at center of legal action requires disclosure of media company's stakeholders

This content is courtesy of SiouxFallsLive.com, a Sioux Falls news outlet that operates independently of The Dakota Scout.

SIOUX FALLS – Newspapers eligible to publish legal notices from local governments in South Dakota must disclose each year who owns the company.

The “Statement of Legal Ownership and Circulation” for The Dakota Scout is at the center of a legal challenge after the City of Sioux Falls named the two-year-old news organization as the legal newspaper.

Jonathan Ellis and Joe Sneve, the co-founders of The Dakota Scout, filed the ownership document on June 27, days before the July 1 effective date of the agreement with the city.

NEWS: Argus Leader asks court to block designation of The Dakota Scout as legal newspaper

The Argus Leader – which for decades held the distinction as legal newspaper for many of the cities, counties and school districts in the area – filed paperwork in district court on Monday asking a judge to block the city’s decision.

The Dakota Scout’s ownership disclosure posted on the Secretary of State’s website initially didn’t include the list of owners with more than a 1 percent stake, because it was on the back of a page.

The Secretary of State made that list available on Tuesday.

Sneve and Ellis hold 52 percent of the company, Sneve said.

“We didn’t want to give up majority ownership,” Sneve said in an interview. “We could have maintained editorial control without majority ownership but we didn’t want the perception that we didn’t. If we would have taken on more investors, we would not own a majority of the company.”

The Dakota Scout did take private investment when it started in 2022 but no other stakeholder has more than 20 percent of the company, Sneve said.

The other stakeholders include:

• Travis Adney of Rapid City, who provides technical support for The Dakota Scout.

• Dan Gehlsen, a Dell Rapids native, who is long-time friend of Sneve and a content contributor to The Dakota Scout.

• Matt Paulson, a Sioux Falls businessman who founded MarketBeat.

• Deja, LLC, whose registered agent is Mary Devish, a Sioux Falls CPA and former Gannett executive who was the publisher of the Argus Leader in the 1990s.

• Dunbar Scribe, LLC, whose registered agent is Amy Ellis, wife of Jonathan Ellis.

The notable name on the list is Paulson, who is a well-known philanthropist and investor.

In an interview with Sioux Falls Live on Tuesday, he said that he’s a passive investor in The Dakota Scout, similar to about 75 companies he has an interest in.

“I gave them some money to get them going because I wanted to support a local media effort. Some of the nationally owned media haven’t done a good job lately,” he said. “This is a natural extension of me wanting to see good local media.”

Paulson supplied $10,000 in cash and $1,000 of in-kind support in the form of his expertise in email marketing and related topics.

He holds 7.89 percent of the company, he said.

“When you see people doing good things in the city and they ask for help and you can help them, why would you not do that,” he said.

Sneve and Ellis contend that they could not have filed the paperwork before the Legislature had even considered a change in law that allowed them to qualify as a legal newspaper. That happened during the session earlier this year.

City Attorney Dave Pfeifle declined comment on the Argus Leader’s legal action on Monday.

Also on Monday, the Sioux Falls School Board designated The Dakota Scout as its legal newspaper.

The City of Sioux Falls averages about $70,000 a year in legals, though that will be lower based on The Dakota Scout’s rates.

The School District typically spends between $30,000 and $40,000 a year and expects about a 30 percent saving by making the switch.

The Argus Leader, via its parent company Gannett, filed its annual ownership document on Dec. 8.

A publicly traded company, Gannett oversees more than 200 newspapers nationwide. Owners with more than a 1 percent stake include 17 financial groups and trust companies:

• Citibank, N.A.

• Alta Fundamental Advisers, LLC.

• BlackRock Fund Advisors.

• The Vanguard Group, Inc.

• Apollo Capital Management, L.P.

• William H. Miller III Living Trust.

• Goldman Sachs & Co. LLC.

• Millennium Management, LLC.

• Fidelity Management & Research Company, LLC.

• State Street Global Advisors (SSgA).

• Omega Family Office, Inc.

• Charles Schwab Investment Management, Inc.

• D.E. Shaw & Company, L.P.

• Dimensional Fund Advisors, L.P. (U.S.)

• Geode Capital Management, LLC.

• Miller Value Partners, LLC.

• Shah Capital Management, Inc.

• Barclays Capital, Inc.