Lee’s falling online profits an anomaly or a sign?
In case you missed it, Lee Enterprises — parent company of my employer, the St. Louis Post-Dispatch, and more than 50 other daily papers — released its third-quarter earnings on Thursday.
The news that made headlines: Profits were down by a whopping 87.4 percent. Net income was $2.8 million, compared to $22.5 million for the same period last year.
But, as Observations on the Newspaper Business points out, the news that should have made headlines: Online advertising fell by 9.1 percent, or $14.7 million.
That’s a bad sign.
- Two other newspaper companies also reported earnings last week. Earnings dropped for both, but online revenue increased:
- The New York Times Co. released second quarter earnings on Wednesday: A 6 percent drop over last year, but online advertising revenue increased by 18.3 percent over the last year.
- The McClatchy Co. released second quarter earnings on Thursday: A 44 percent drop over last year, but online advertising revenue increased by 12.5 percent since the start of the fiscal year.
In response to Lee’s falling profits, CEO Mary Junck offered these comforting words:
We believe our financial outlook remains solid.
Because we cannot foresee the length of the economic downturn, we are focusing on rigorous cost reductions through staff reorganizations, narrower page widths, newsprint conservation programs and other efficiencies, as well as reduced capital spending. In our fiscal year that begins this fall, assuming no new surprises in newsprint prices, we are aiming for a further reduction in cash costs of 5-7 percent.
That would seem to lend credence to the rumor of upcoming layoffs.
- Posted by Erica Smith at 12:09 am / Permalink for this post
- Filed under: , buyouts and layoffs, Gannett Co. Inc., Lee Enterprises, St. Louis Post-Dispatch
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As a former Lee employee this news is disheartening to say the least. But, what really strikes me is your flip approach to all this. Are you really that secure in your job at the P-D that you can mock the CEO of the company by labeling her words as “comforting.” Wow. I’d say you have balls the size of monster truck tires, but your DNA makes that impossible.
Secure in my job? Absolutely not. I’m very aware of the Post-Dispatch union’s policy of “last one hired, first one laid off.” And, although I’ve been at the paper for a year and a half, I was the last designer hired. Depending on how and when layoffs are announced, I know my name could be on that list, whether I sarcastically refer to Mary Junck’s quote as comforting or not. At the same time, I’m tired of waiting for the other shoe to drop — and I know many of my co-workers feel the same way.
I’ve also kept track of layoffs and buyouts long enough (and been a journalist long enough) to be a little cynical. Lee laid off 16 employees at the Lincoln Journal Star and 14 at the Pantagraph in July. Junck’s words strongly indicate there will be more. I still think the Post-Dispatch will be on the list.
Greg:
Have you fallen on your head again? You need to stop doing that.
Greetings compadres.
Let’s remember to things here:
- The drop in online is going against HUGE gains a year ago with the Yahoo! HotJobs rollout and in an incredible downdraft in recruitment spending; inbound calls down by +40%. Look at online revenue and income over several years and you’ll see a dip against large gains. What’s also not easily seen from outside is the aggressive changes being made on our classifieds sales teams…we’re starting to actually call customers! OK, not meaning to be sarcastic. But what a transformation from within.
- Our sales and editorial staff structures have remained unchanged for decades. I mean, really. Sure, a few people have online or new media responsibilities that did not exist 10 years ago. But the change needed to advance our opportunities is still ahead. Look at the changes in Munster and you see really important steps that pave the way for the next phase of our evolution.
These are scary times, a little. But Lee is doing the right things, the hard things, making the right changes to not only survive but expand our reach with audiences and advertisers.
Would you really want it any other way?
That should read “…remember TWO things…”
Where’s a good copy editor when you need one?
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