|RIP, the Daily Paper: As Headlines Document the Death of Print Media, How Will Quad Cities Newspapers Survive? - Page 3|
|News/Features - Media|
|Written by Jeff Ignatius|
|Wednesday, 18 March 2009 06:00|
Page 3 of 5
Quad-City Times : "Minimize the Impact"
A Quad-City Times representative said no similar cuts or structural changes have happened at his paper.
Editor Steve Thomas declined on his and Publisher Julie Bechtel's behalf several requests for an interview with the River Cities' Reader. But he did respond to written questions.
"The staffing levels of the Quad-City Times newsroom have not changed in the last few years, nor since last year," he wrote in an e-mail. "We are down 1.7 FTEs [full-time equivalents] from Feburary 2008, but that includes an open sports-reporting position that I will be filling when we identify the right candidate."
He also wrote that neither the newsroom structure nor the news-gathering process had changed in the past year, and that there are no plans to change either.
That is in the context of cuts throughout Lee Enterprises. Last week's report to shareholders said the company had suspended 401(k) contributions and had instituted a pay freeze and unpaid furloughs. Dividends have also been suspended.
Dan Hayes, Lee's vice president for communications, said in January that Lee executives were not making public comments. Early last week, he wrote that Lee President, Chair, and CEO Mary Junck was not available for an interview for at least two weeks. Hayes provided written responses to questions about Lee Enterprises.
"Staffing levels, unpaid furloughs, and other local cost actions are determined locally," Hayes wrote. "Because of the recession, all locations have reduced costs."
Staffing at Lee newspapers, according to Hayes, dropped from 8,141 full-time equivalents in December 2007 to 7,276 in December 2008 - a reduction of more than 10 percent.
He said that he did not have statistics on newsroom employment, but added: "Overall, we have reduced staffing less than you've seen at other newspaper companies."
Joyce Dehli, Lee's vice president for news, wrote: "As we've reduced costs, we've tried to minimize the impact on newsrooms whenever possible. ...
"Lee newspapers have cut back on the amount of nationally syndicated content they purchase. It also means travel has been reduced. At the same time, we've recently developed a new system for sharing stories, photos, videos, and other content among Lee newsrooms, which they can adapt to serve their own readers or use instead of syndicated material. It also makes it easier for newsrooms within a region or state to send one reporter to cover an event of statewide significance, rather than each one sending its own reporter."
Lee reported an operating loss of more than $1 billion in Fiscal Year 2008, followed by a $34-million operating loss in the first quarter of Fiscal Year 2009.
Hayes said that most of the 2008 operating loss was a result of one-time impairment charges. "All of Lee's properties are profitable," he wrote. "The impairment charges are required by accounting rules and were caused by the decline in Lee's stock price and diminished revenue trend as a result of the recession."
In Fiscal Year 2008 on a cash basis, Hayes wrote, "Lee had revenue of $1.03 billion, cash costs of $821.9 million, and operating cash flow of $207.0 million."
Lee has targeted cutting costs 12 to 13 percent in the current fiscal year, following a 2.7-percent reduction last year.
Cost-cutting would almost certainly be necessary in the current economy, but it's made even more important by the company's debt and share price.
Lee remains saddled with debt from its $1.5-billion acquisition of Pulitzer in 2005. In February, Lee refinanced $306 million in debt and restructured $1.1 billion in payments. Those moves essentially bought the company time; in December, Lee reported that impending debt payments and the company's cash flow "raise significant uncertainty about the company's ability to continue as a going concern."
But restructuring and refinancing haven't done much for the company's stock price.
Lee stock traded at more than $35 a share in early 2007 but on Monday closed at 28 cents a share. On February 20, the day after the refinancing was announced, the stock closed at 52 cents a share.
It last closed above a dollar on November 28, 2008. Hayes said that shareholders last week authorized the board to conduct a reverse stock split, in which multiple shares of Lee stock would be consolidated. That move would be undertaken to push the stock's price above the $1 minimum required for listing on the New York Stock Exchange, although that rule has been temporarily lifted. "Under the relaxed rules, Lee is in compliance," Hayes wrote.