One of my biggest criticisms of Journal Register Company and Digital First Media has been how it has cherry-picked financial figures to show its transformation is succeeding, and how the press covered those incomplete numbers.

Journal Register, as a closely held company owned by a secretive hedge fund, doesn’t have to report its results. So it’s been near impossible for business journalists to put the pronouncements of CEO John Paton in context like they typically would with any corporate financial spin.

But when you file for bankruptcy protection, you do have to publicly release some numbers, and so, between those now in the public record (see the bottom of this post), along with Paton’s public statements, I backed into some rough estimates of how JRC’s digital transformation has gone and ran them by Paton, thinking he wouldn’t be able to comment. Surprisingly—and to his credit—he did and gave me precise numbers that give us the clearest picture yet of JRC’s Digital First-era finances.

Of JRC’s $295 million in revenue last year, $167.1 million of it was print ads, $86 million was print circulation, and $30.1 million was digital ads. That means digital ads were 10.2 percent of JRC’s total revenue, up sharply from the pre-Paton era when it was a miserable 2.8 percent.

The question for Paton and JRC is how fast that digital revenue can continue growing. We’ve noted a few times that it’s far easier to post big growth percentages when you’re growing off a small base. When Paton took over, JRC had one of the lowest rates of digital revenues in the business. A good chunk of the 235 percent growth in digital revenue since was low-hanging fruit. You can see this from the trendline of growth, which, according to the bankruptcy filing, was 108 percent in 2010, 61 percent in 2009, and 33 percent so far this year.

It’s worth noting that McClatchy’s digital revenue was at least 17 percent of total revenue last year. The New York Times’s was at least 17 percent, including my rough estimates of its digital-subscription revenue (that number was 13 percent excluding, which it has since sold). Gannett’s digital revenue last year was 21 percent of total revenue, which is something. Gannett!

(One thing to point out here: A percentage is calculated with a nominator and a denominator, obviously. So when the denominator (total revenue) declines, as it has been, the digital revenue percentage will grow even if digital revenue declines, so long as it declines more slowly than other revenue streams. In other words, JRC’s digital revenue, 10 percent of the total today, would be just 5 percent if it still had 2005-size total revenue, and everyone else’s would fall similarly. Sharp print declines actually make digital look better than it really is).

Beyond the relative ease of posting big numbers off a low base, it’s easier to raise revenues if you’re pouring a bunch of money into a business, which, to its credit, JRC has done with digital. The ultimate question, though, is what kind of return on investment you can get. To tell that, we need to look at digital costs.

Paton tells me digital investment was $8.5 million for 2009 and a projected $21.7 million for this year. He didn’t have 2011 handy, but adding numbers in the filing to Paton’s 2009 figure gives us $21.3 million.

That’s a net gain of $20.1 million on a net increase of $12.8 million in expenses. The net return on investment is $7.3 million a year, which is pretty good, though our low-hanging-fruit premise would imply that every new dollar from here on out will be harder and more expensive to get.

The problem is, in the meantime, print-ad revenues fell from $206.6 million in 2009 to $167.1 last year, while circulation edged down from $89 million to $86 million. That’s a $43 million annual loss of print revenue (19 percent), and it’s only partially balanced out by print operating cost cuts, which will total roughly $40 million a year by the end of this year, according to JRC’s filing. By the end of this year, JRC’s print loss from 2009 levels will be roughly $62 million, if 2009-2011 trendlines continue.

So the digital gains and print cost cuts clearly weren’t enough to offset the loss of print revenue and the increase in other costs like pension shortfalls, and the result was bankruptcy.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum.