Tuesday, December 06, 2011

Black & white & in the red

I probably wouldn’t have noticed that Lee Enterprises, Inc., my former employer, was planning to file for “prepackaged” Chapter 11 bankruptcy late last week --- had it not been for a comment by a Facebook friend and former co-worker, now alive and well and operating Bobzilla’s Bicycle Werks in Oskaloosa.

Frankly, there’s more of a market for bicycles than newspapers these days --- and we’re both grateful our futures do not include a prayer meeting in the conference room featuring the gospel according to Lee CEO Mary Junck --- “bankruptcy is good --- you’re gonna love it.”

And actually it is good news in a way --- the inevitable dismantling of what now is the nation’s fourth largest newspaper chain has been postponed from 2012 until at least 2015. That gives a few more friends more time to reach retirement age or find jobs with futures and skedaddle --- hopefully. Medicare is such a reassuring thing.

Lee operates, in Iowa, the Sioux City Journal, Mason City Globe Gazette, Waterloo Courier, Quad-city Times, Muscatine Journal and some weeklies and other stuff. It used to own the Ottumwa Courier, one of the first newspapers in the Lee group, but sold that off. I always figured that was the beginning of the end --- when you forget where you come from you probably haven’t too firm a grip on where you’re going.

When I went to work for Lee many years ago, it was one of the best-managed and most-profitable smaller to mid-size media groups in the country, generating enough revenue to treat its employees well, keep unions at bay and offer its executives outrageous salaries --- always at the top of The Register’s annual list of highest-paid.

Then, after a change in corporate strategy, Lee began to get greedy, culminating in the 2005 purchase of the Pulitzer Group, including the St. Louis Post-Dispatch, for roughtly $1.46 billion. That was the equivalent to a Davenport-based bullsnake trying to swallow a Missouri-based steer and the principal source of roughly $1 billion in debt still outstanding.

The corporation remains profitable --- executives have sliced and diced their way through cuts to personnel, product quality and services to make it that way --- earning substantial bonuses for doing so. It just can’t generate enough revenue to service its debt. And only the most optimistic would consider investing in Lee stock --- it shot “up” after Friday’s announcement to 74 cents from the 50-cent range, then fell back. Golly.

Lee is pinning its hopes on online revenue --- and while that does continue to increase, it represents only 12 percent of the total, meaning those other tired old media are going to have to keep cranking away for a long, long time.

I’m grateful for online newspapers --- I no longer have to buy a Des Moines Register subscription, for example, since they give all that away online. But newspapers tend not to do online especially well and cuts to staff take them in the direction of not doing much of anything especially well.

I only have to subscribe to weekly newspapers now --- which by the way, rarely give much of anything away online. A wise choice, I’d say.

The only folks making money out of the Lee debacle nowadays make it by and for managing debt, now the corporation's principal business, which seems odd. But I guess that’s progress.


Ed said...

Off topic but relevant to past posts, I recently read Keosauqua is a competitor to Chariton in the Mainstreet application. I don't know if I will be able to root for you getting approved anymore if only one town wins a year. The article didn't specify that. Do you know the answer?

Ed said...

On topic, I miss actual newspapers delivered to my doorstep and in my case, read in the easy chair after a hard day at work. Sitting down by the computer squinting at the screen just doesn't do it for me.

Frank D. Myers said...

There's no way of telling how many, if any, Main Street applications will be approved. Logically, it might be two, maybe even three, since no applications were accepted last year. It all comes down to the strength of the applications (if all were weak, for example, all might be rejected) and the capacity of the Main Street Iowa staff to deal with the labor-intensive tasks related to startup in new Main Street communities while continuing to serve the 45 or so others already in.

Frank D. Myers said...

Actually, I miss "real" newspapers, too. And if, for example, The Register decided to make it's online product subscriber-only, I'd probably subscribe again to the paper product instead.