I think I might have a future career as a media analyst. Last year, I wrote about the bind faced by the mismanagers of Lee Enterprises: desperate to deal with its incredible debt and burdened by the need to richly rewards it top executives, the newspaper chain has to reduce expenses, those expenses primarily consisting of the people who produce the news that gives Lee its marginal value. (Lee Enterprises is the parent corporation for the Montana dailies in Billings, Butte, Missoula, and Helena.)
Today, on the heels of a 8% reduction in Lee staffing and an $88.5 million dollar quarterly loss, the St. Louis Business Journal quotes Ken Doctor, a media analyst, who explains the mess Lee is in:
If the company continues to cut staff in order to make repayments, it risks diminishing its product to a point that readers won’t pay for it, he said.
Lee reduced its average number of full-time equivalent employees by 8.3 percent in fiscal 2013 from the prior year.
It’s pretty simple: when you don’t have enough reporters and editors to write and prepare news worth reading, eventually you’ll lose even the readers who may be just buying your paper out of habit.
Back in April of 2012, Lee reduced its staffing by a similar amount, cutting full-time equivalent positions by 7.5%.
The Seeking Alpha investing blog puts the situation Lee faces in perspective. In the past three years, the company has shed over a quarter of its staff:
Since the beginning of 2010, Lee Enterprises has reduced its headcount from 6,304 people to 4,678, a decline of 26%. If you’re wondering how this is possible, it’s not from getting people to work smarter or harder. Firing 26% of the workforce was made possible by the company’s decision to shrink its newspapers. Over the same time period, the volume of newsprint consumed by the company has declined by 30%.
Media consumers in Montana are certainly seeing the impact of these reductions. As the staff cuts continue, readers who read the Missoulian on Wednesday are likely to read a marginally interesting local story from Helena that was published in the Independent Record on Monday. Critical local and statewide news stories simply aren’t getting the attention they deserve, because there simply aren’t enough bodies in the newsroom writing them.
Shrinking staff, shrinking newspapers, and a rapidly shrinking value of the core product put out by corporation. It’s simply astonishing that the only thing growing at Lee Enterprises is the compensation of the people who’ve destroyed the company and irreparably harmed news gathering in our local communities.
Vulture capitalism at its worst.