Lee stock falls 24 percent

After word got out that Lee is cutting its contributions to employee 401(k) accounts and suspending its dividends, the company's stock fell 24 percent. The share price fell 79 cents, closing at $2.50. (The 52-week low is $1.94, set Oct. 10.)

Find real-time stock prices in the sidebar -- 5-day and 52-week comparison.

Lee suspends 401(k) contributions

The letter from Mary Junck:

October 31, 2008

Dear Lee Employee:

Like many other businesses and media companies, Lee has been battered by the unprecedented economic turmoil and credit crisis. Consumers are suffering and spending less, which means our advertisers are suffering and spending less. As a result, our revenue and earnings have fallen.

While we believe that the economy will improve and that Lee will emerge strong, no one can predict when the upturn will begin. Until it does, we must protect our financial health by reducing spending even more while continuing to drive revenue as aggressively as we can.

Until economic conditions improve, the company’s profit-sharing contribution to most employee 401(k) retirement accounts is being suspended beginning in December. Also, the company’s match to employee contributions is being reduced. For most employees, the reduction is half of the current levels.

We regret having to take these steps and look forward to the time when these benefits can be reinstated.

As you know, significant expense cuts have already been made in all areas of our business. In addition, executive pay has been frozen, corporate executive bonuses have been suspended for the full year, and future stock grant programs have been suspended. Also, we have renegotiated credit terms with our lenders and suspended stockholder dividends.

Thank you for all you do for Lee. I am grateful for your perseverance in this extraordinary time of challenge.

We’ll get past this. In the meantime, I think it helps to remember how vitally important our newspapers and websites are in the communities we serve. No competitor comes close to providing the value we do for readers and advertisers, and our audiences continue to grow.

With appreciation and best regards,

Mary Junck

Yesterday, Lee announced it would suspend its dividends.

Lee papers see circulation increases

Third quarter circulation numbers are out, and it's mostly bad news. Overall, weekday circulation at the 507 papers that reported totals for April to September fell 4.6 percent. Sunday circulation fell faster -- 4.8 percent. The rate is much steeper than it was a year ago. Newspaper website use grew 16 percent.

Newspaper group-wise, though, Lee had the best results: down just 1.9 percent on weekdays and 3.7 percent on Sundays.

The St. Louis Post-Dispatch reported an increase in Sunday circulation: a gain of 0.8 percent. The Wisconsin State Journal in Madison saw a circulation increase of 10.6 percent.

Newspapers are shrinking

Not the number of pages, although many Lee papers are cutting back, but the width of the paper is shrinking again. Most Lee papers will move to a 44-inch web. Vice president of production Brian Kardell says the St. Louis Post-Dispatch and the Wisconsin State Journal in Madison, Wisc., will switch by the end of 2009.

Kingsburg paper gets competition

Kingsburg, Calif., a town of 11,000, now has two weekly papers: Lee's Kingsburg Recorder and a new upstart, the Kingsburg Press.

The Press debuted Tuesday with a 20-page tab, printing 4,000 copies. Publisher Leneé Willems said residents complained that the Recorder was printing too much news from neighboring towns. Willems said the Press will focus only on news from Kingburg. The paper has three reporters (including at least one former Recorder reporter) and one sales rep. The first issue was free; future editions will be 50 cents.

Willems's husband used to work for Lee's Selma Enterprise; he left that paper last year and the couple started a commercial printing business.

"Enterprise of the Year" finalists announced

The winner will be announced in November. The 5 finalists:

• Lee Agri-Media
• TownNews.com
• Cayuga Media, which includes The Citizen and The Skaneateles Journal
• Kauai Publishing Co., which includes The Garden Island
• Lincoln (Neb.) Journal Star

Lee has details on why these 5 enterprises were picked. I will mention, though, that the Journal Star was selected because of  "strong performances in revenue." The paper laid off 16 employees in July to cut costs.

52 laid off at The Courier

Printing of The Courier in Waterloo, Iowa, has been outsourced to the Cedar Rapids Gazette. Eighteen full-time and 34 part-time pressroom and mailroom employees were laid off.

Former Lee paper closing

After 127 years, the weekly Wood River Journal in Hailey, Idaho, has closed. Its assets have been sold to the Idaho Mountain Express in Ketchum, Idaho. Lee Enterprises sold the Journal in April to Idaho Falls' Post Co.

Post-Star names new publisher

Rick Emanuel was named the Post-Star's publisher on Wednesday. The Post-Star is in Glens Falls, N.Y. Emanuel was the publisher a The Citizen in Auburn, N.Y., for the past 10 years.

In the publisher shuffle, Emanuel replaces Rona Rahlf, who is now the publisher of The Daily Herald in Provo, Utah. The Citizen's advertising director, Michael Rifanburg, has been named that paper's interim publisher.

President's Awards announced

You can read the press release on Lee's site.

The bigger winners for "news in excellence" (with a link to the winning endeavor):

• Arizona Daily Star
  
• North County Times
• St. Louis Post-Dispatch
• Suburban Journals of St. Louis
• The Daily Herald

Winners for "innovation": 

• Billings Gazette Communications for sellitmt.com
• The Sourthern Illinoisan, The Sentinel, Casper Star-Tribune, The Post-Star and the St. Louis Post-Dispatch, but it's not clear what the "highly successful companywide initiative to gain market share by providing superior advertising reach" really was
• St. Louis Post-Dispatch for "Work2Goal"
• Suburban Journals of St. Louis for stlouisbestbridal.com
• Lincoln Journal Star for "Ultimate Home Delivery"
• Quad-City Times for "Q-C House Hunt"

"Lee Spirit":

• Courier Communications for coverage of an immigration raid, tornado that killed eight people and flooding that forced thousands to evacuate.

Suburban Journals switch to subscriptions

No long after cutting staff, now it looks like the Suburban Journals of St. Louis are cutting readers. For the first time, the Journals will become subscription-based papers: $20 a year. The fee is not much, but the timing, economically, is very bad. The weekly, which used to cover about 20 counties, is now down to nine.

Wisconsin State Journal editor quits

Wisconsin State Journal Editor Ellen Foley announced she was resigning, citing her husband's ongoing battle with cancer. The Journal no longer has a managing editor -- that position was eliminated and ex-managing editor Tim Kelley became the digital media manager at Capital Newspapers Inc. Capital Newspapers is jointly owned by Lee and The Capital Times Co.

Quad-City Times getting new press equipment

Two DGM 430 units will be added to the paper's press.

Lee stock closes at $2.33

That's just 11 cents from the 52-week low of $2.22. Stock nosedived Monday, falling 20 percent.

More bad news: A Goldman Sachs analyst says companies will cut their advertising through 2009, and that local advertising -- Lee's bread and butter -- will decrease more than national advertising.

Lee lays off 45 at Suburban Journals

The Post-Dispatch got all of the headlines last week when 20 employees were laid off. But on the same day, the Suburban Journals of St. Louis laid off 45 employees in advertising and editorial. Yep. 45.

The River Front Times has an account of what happened. Sending people to a conference room to lay them off en masse? Very wrong.