Lee Enterprises Explained

Lee Enterprises, Inc.
Type:Public
Traded As:NASDAQ:
Russell Microcap Index component
Founder:Alfred Wilson Lee
Location:Davenport, Iowa
Num Employees:4,365
Num Employees Year:2022
Industry:Media
Products:Newspapers and television station
Revenue: million
Assets: million
Assets Year:2022
Revenue Year:2022
Operating Income: million
Income Year:2022
Net Income Year:2022
Footnotes:[1]

Lee Enterprises, Inc. is a publicly traded American media company. It publishes 77 daily newspapers in 26 states,[2] and more than 350 weekly, classified, and specialty publications. Lee Enterprises was founded in 1890 by Alfred Wilson Lee and is based in Davenport, Iowa.[3]

The company also provides online services, including websites supporting its daily newspapers and other publications. Lee had more than 25 million unique web and mobile visitors monthly, with 209.1 million pages viewed. Lee became majority partner of TownNews.com in 1996; Town News creates software for newspaper publication purposes. The company offers commercial printing services to its customers.

Lee Enterprises is currently the fourth largest newspaper group in the United States of America. The company acquired Howard Publications (16 daily newspapers) for $694 million in 2002[4] and Pulitzer, Inc. (14 daily, over 100 non-daily), for $1.5 billion in 2005.[5]

From January 2012 to April 2017, the company's executive chairman, Mary Junck, was chairman of the Associated Press.[6] In December 2018, Lee Enterprises announced that Mary Junck would transition from Executive Chairman to Chairman of the company.[7]

In January 2020, Lee Enterprises announced an agreement with Berkshire Hathaway to acquire BH Media Group's publications and The Buffalo News for $140 million in cash.[8] [9]

In November 2021, global hedge fund Alden Global Capital made an offer to acquire Lee Enterprises for $24 per share, or about $141 million.[10] In response, the board of Lee Enterprises enacted a shareholder rights plan, colloquially known as a "poison pill", in order to ward off the purchase attempt.[11] Then, in early December, the board of Lee unanimously rejected the Alden bid, saying that the Alden proposal "grossly undervalues Lee and fails to recognize the strength of our business today."[12]

In November 2021, the U.S. Department of Justice alleged two Iranian nationals had accessed the company's content management system in the fall of 2020, aiming to post false news about the presidential election.[13]

Significant events

Sale of television subsidiary

Lee operated a broadcasting division, which it sold in 2000 to pay off debt and in order to focus on newspaper publishing. Most of the TV stations were sold to Emmis Communications,[14] and have all been sold, as of 2007, to other companies.

Chapter 11 bankruptcy and bailout reorganization

The company filed for Chapter 11 bankruptcy in 2011.[15] It emerged from bankruptcy less than two months later. In April 2012, Warren Buffett took a stake in Lee Enterprises (through Berkshire Hathaway Inc.), buying $85 million of the company's debt from Goldman Sachs Group.[16]

In June 2012, Berkshire Hathaway filed an amended Form 13F (13F-HR/A) for the period ending March 31, 2012.[17] This document disclosed that Berkshire accumulated $2,119,000 or 1,655,125 common shares of Lee Enterprises, or a 3.2 percent stake.[18] The document noted that the confidentiality of this transaction was requested but denied by the SEC on May 25, 2012.[19]

Debt recapitalization

In April 2013, Lee Enterprises announced that Berkshire Hathaway refinanced the remaining Pulitzer acquisition debt equating to $94 million, at no cost.[20] The collateral involved was the TNI Partner stake including the Arizona Daily Star and azstarnet.com. The result of this was a reduction in interest from a variable rate of 11.3% to a fixed rate of 9%, and an extension of the debt maturity date of the debt from December 2015 to April 2017. At the time of the announcement Lee Enterprises noted there was $893 million left to pay off. Lee paid off and retired its New Pulitzer notes in June 2015, six months before the original maturity date and 22 months before the new maturity date. Lee also refinanced its remaining debt in 2014 in order to extend the maturities from 2015 and 2017 to 2019 and 2022. Lee retired its 1st Lien Term Loan in November 2018, four months before its scheduled March 2019 maturity.

On June 27, 2018, Lee Enterprises and Berkshire Hathaway reached a five-year agreement to allow Lee Enterprises to manage Berkshire Hathaway's newspaper and digital operations.[21]

BH Media Group acquisition

On January 29, 2020, Lee Enterprises announced an agreement to buy Berkshire Hathaway's BH Media Group publications and The Buffalo News for $140 million cash. The acquisition comprised 30 daily newspapers in 10 states plus 49 paid weekly publications with digital sites, as well as 32 other additional print products. Daily papers include the Omaha World-Herald, Richmond Times-Dispatch, Tulsa World, and Winston-Salem Journal. Lee entered into a 10-year lease for BH Media's real estate as part of the agreement.[22]

To finance the acquisition, Berkshire Hathaway provided $576 million in long-term financing to Lee at 9% per annum. Lee Enterprises used the funds to pay for the Berkshire properties and to refinance its roughly $400 million in existing debt. Much of this remains from the purchase of Pulitzer Inc. for $1.5 billion in 2005.[23] Berkshire became Lee's sole lender after the deal closed on March 16, 2020.

"We had zero interest in selling the group to anyone else for one simple reason: We believe that Lee is best positioned to manage through the industry's challenges," Warren Buffett said in a statement.[24]

The acquisition was completed on March 16, 2020.[25]

Attempted acquisition by Alden Global Capital

Alden Global Capital purchased a 5.9-percent stake in Lee Enterprises in January 2020.

In November 2021, Alden made an offer to Lee to purchase the company in its entirety for roughly $141 million.[26]

In response, the board of Lee Enterprises enacted a shareholder rights plan, colloquially known as a "poison pill", in order to ward off the purchase attempt. The specific shareholder rights plan adopted by the Lee board forbids Alden from purchasing more than 10% of the company, and will be in force for one year. The rationale offered by the board was, "Consistent with its fiduciary duties, Lee's Board has taken this action to ensure our shareholders receive fair treatment, full transparency and protection in connection with Alden's unsolicited proposal to acquire Lee."[27]

In early December, the board of Lee unanimously rejected the Alden bid, saying that the Alden proposal "grossly undervalues Lee and fails to recognize the strength of our business today."[28] Shortly thereafter, Alden Global, through its operating unit Strategic Investment Opportunities, filed a lawsuit in state court in Delaware against Lee Enterprises.[29] The Alden lawsuit asserts that the members of the Lee board "have every reason to maintain the status quo and their lucrative corporate positions" and that they are "focused more on [their] own power than what's best for the company."[30]

In mid-February 2022, the Delaware court found in favor of Lee Enterprises. In the face of that setback, Alden said it would turn to the tactic of filing a proxy statement asking the company's shareholders to vote no on board members Mary Junck and Herbert Moloney during the March 2022 board elections.[31] This attempt also failed, as shareholders returned both directors to the Lee board despite Alden's opposition.[32]

2022 layoffs

In May 2022 Lee Enterprises reportedly laid off roughly 400 staffers, roughly 10% of the workforce. The reduction was spread across about 19 of the chain's 75 newspapers and included roles in corporate headquarters.[33]

Some of the layoffs included the editor of The Eagle in Bryan, Texas and the publisher of The Bismarck Tribune in Bismarck, North Dakota.[33]

Newspapers

Lee Enterprises owns 77 daily newspapers and approximately 350 specialty publications in 26 states.[34] The company's portfolio grew substantially, nearly doubling its audience size, with the acquisition of BH Media Group's publications in early 2020, including the Omaha World-Herald, Richmond (Virginia) Times-Dispatch and Tulsa World.

In January 2020, Lee Enterprises sold its newspaper and digital media operations in southern Oregon to Country Media, Inc. The sale included The World (Coos Bay), the Bandon Western World and The Umpqua Post. Lee had purchased the papers as part of its acquisition of Pulitzer, Inc. in 2005.[35] [36]

In March 2020, Lee sold the Santa Maria Times, The Lompoc Record, The Hanford Sentinel and the Santa Ynez Valley News, all in California, to Santa Maria News Media Inc., a newly-formed company led by a group of Canadian newspaper executives.[37]

In June 2023, Lee Enterprises sold the Daily Journal and three other newspapers to Better Newspapers Inc.[38] In September 2023, Lee sold the Arizona Daily Sun to Wick Communications.[39] In October 2023, Lee sold The Southern Illinoisan to Paxton Media Group.[40]

List of Newspapers

Source:[41]

State City Newspaper
AlabamaDothanDothan Eagle
OpelikaOpelika-Auburn News
ArizonaTucsonArizona Daily Star
CaliforniaNapaNapa Valley Register
IdahoTwin FallsTimes-News
IllinoisBloomingtonThe Pantagraph
DecaturHerald & Review
Quad CitiesThe Dispatch / The Rock Island Argus
Mattoon & CharlestonJournal Gazette / Times-Courier
IndianaMunster (Northwest Indiana)The Times of Northwest Indiana
IowaClarindaClarinda Herald-Journal
Council BluffsThe Daily Nonpareil
DavenportQuad-City Times
DenisonDenison Bulletin & Review
Mason CityGlobe Gazette
MuscatineMuscatine Journal
ShenandoahThe Valley News
Sioux CitySioux City Journal
The Waterloo-Cedar Falls Courier
Woodbine/LoganTwiner-Herald
MissouriSt. Louis Post-Dispatch
MinnesotaWinonaWinona Daily News
Billings Gazette
ButteThe Montana Standard
HamiltonRavalli Republic
HelenaIndependent Record
MissoulaMissoulian
NebraskaBeatriceBeatrice Daily Sun
ColumbusColumbus Telegram
FremontFremont Tribune
Grand IslandThe Grand Island Independent
LincolnLincoln Journal Star
KearneyKearney Hub
LexingtonLexington Clipper-Herald
North PlatteThe North Platte Telegraph
OmahaOmaha World-Herald
ScottsbluffStar-Herald
WahooWahoo Newspaper
YorkYork News-Times
NevadaElkoElko Daily Free Press
New JerseyAtlantic CityThe Press of Atlantic City
New YorkAuburnThe Citizen
BuffaloThe Buffalo News
Glens FallsThe Post-Star
North CarolinaConcordIndependent Tribune
GreensboroNews & Record
HickoryHickory Daily Record
MarionThe McDowell News
MorgantonThe News Herald
MooresvilleMooresville Tribune
StatesvilleStatesville Record & Landmark
Winston-SalemWinston-Salem Journal
North DakotaBismarckThe Bismarck Tribune
OklahomaTulsaTulsa World
OregonAlbanyAlbany Democrat-Herald
CorvallisCorvallis Gazette-Times
LebanonLebanon Express
PennsylvaniaCarlisleThe Sentinel
South CarolinaFlorenceThe Morning News
OrangeburgThe Times and Democrat
South DakotaRapid CityRapid City Journal
TexasBryan-College StationThe Eagle
WacoWaco Tribune-Herald
VirginiaBristolBristol Herald Courier
CharlottesvilleThe Daily Progress
CulpeperCulpeper Star-Exponent
DanvilleDanville Register & Bee
FredericksburgThe Free Lance–Star
LynchburgThe News & Advance
MartinsvilleMartinsville Bulletin
RichmondRichmond Times-Dispatch
RoanokeThe Roanoke Times
Rocky MountThe Franklin News-Post
WaynesboroThe News Virginian
WashingtonLongviewThe Daily News
WisconsinChippewa FallsThe Chippewa Herald
KenoshaKenosha News
La CrosseLa Crosse Tribune
MadisonWisconsin State Journal
RacineRacine Journal Times
WyomingCasperThe Casper Journal
CasperCasper Star-Tribune

Notes and References

  1. Web site: LEE ENTERPRISES, INCORPORATED FORM 10-K. . . 2022-09-25 . 2023-10-22 .
  2. Web site: About. Enterprises. Lee. Lee Enterprises. en. 2017-12-15.
  3. Web site: About TownNews.com. TownNews.com. TownNews.com. en. 2017-12-15.
  4. Web site: Lee Enterprises Buys Howard Publications . February 2, 2002 . Editor & Publisher . 7 July 2012.
  5. Web site: Pulitzer to Be Acquired by Lee Enterprises . Steinberg, Jacques . February 1, 2005 . New York Times . 7 July 2012.
  6. Web site: "Mary Junck of Lee Enterprises named new AP board chairman", Associated Press press release, January 26, 2012. . . 2015-05-06 . https://web.archive.org/web/20150505005857/http://ap.org/Content/Press-Release/2012/Mary-Junck-of-Lee-Enterprises-named-new-AP-board-chairman . 2015-05-05 . dead .
  7. Web site: Mary Junck moves to chairman of Lee Enterprises. Lee Enterprises. en. 2019-01-28.
  8. Web site: Lee Press Release. The Daily Progress. 29 January 2020 . en. 2020-01-29.
  9. Web site: Warren Buffett Says Goodbye to His Struggling Newspaper Business. dead . https://web.archive.org/web/20200130140618/https://www.bloomberg.com/amp/news/articles/2020-01-29/warren-buffett-throws-in-the-towel-on-his-newspaper-empire . 2020-01-30 . .
  10. Web site: Sara Fischer on Twitter . 2021-11-22 . Twitter . en.
  11. News: Mullin . Benjamin . Lee Enterprises Enacts Poison Pill to Guard Against Alden Takeover . November 25, 2021 . Wall Street Journal . November 24, 2021.
  12. News: Bruell . Alexandra . Lee Enterprises Board Rejects Alden's Acquisition Offer . December 11, 2021 . Wall Street Journal . December 9, 2021.
  13. News: Volz. Dustin. 2021-11-19. WSJ News Exclusive Iranian Hackers Broke Into Newspaper Publisher Lee Enterprises Ahead of 2020 Election. en-US. Wall Street Journal. 2021-11-24. 0099-9660.
  14. News: Lee Enterprises Inc.: publishing, newspapers, online, shoppers, class…. https://archive.today/20130221181521/http://www.lee.net/newsreleases/news-2000-10-02-emmis.shtml. dead. 2013-02-21. 2013-02-21. archive.is. 2018-07-01.
  15. http://newsandinsight.thomsonreuters.com/Legal/News/2011/12_-_December/Newspaper_group_Lee_Enterprises_files_for_bankruptcy/ "Newspaper group Lee Enterprises files for bankruptcy"
  16. Web site: Warren Buffett Building Newspaper Empire? - Deal Journal -. blogs.wsj.com . 2012 . 13 April 2012.
  17. https://www.sec.gov/Archives/edgar/data/1067983/000119312512260151/0001193125-12-260151.txt "Berkshire Hathaway SEC Archives March 31, 2012 13F-HR/A amendment"
  18. Web site: Shares of Lee Enterprises Surge After Buffett Buys Stake . June 6, 2012 . Reuters . New York Times . 7 July 2012.
  19. Web site: Buffett's Berkshire Discloses Stake In Lee Enterprises . June 5, 2012 . Kraut, Dan . Bloomberg . 7 July 2012.
  20. Web site: Lee Enterprises refinances $94 million in debt . April 30, 2013 . nwitimes.com . 11 May 2013 .
  21. Web site: Warren Buffett loves his newspapers, he just wants someone else to manage them for him . June 26, 2018. cnbc.com . 29 June 2018.
  22. Web site: Post-Dispatch owner Lee Enterprises makes $140M deal to buy Berkshire newspapers. staff and wire. stltoday.com. en. 2020-01-30.
  23. Web site: Lee Enterprises Buys Pulitzer for $1.46 Billion. 2005-02-01. Los Angeles Times. en-US. 2020-01-30.
  24. Web site: Warren Buffett Says Goodbye to His Struggling Newspaper Business. Chiglinsky. Katherine. Edwards III. John J.. 2020-01-29. Bloomberg. 2020-01-30.
  25. Lee Enterprises . March 16, 2020 . Lee Enterprises completes acquisition of Berkshire Hathaway newspaper operations . . 2024-07-01.
  26. News: Benton . Joshua . The vulture is hungry again: Alden Global Capital wants to buy a few hundred more newspapers . November 22, 2021 . Nieman Lab . November 22, 2021.
  27. News: Mullin . Benjamin . Lee Enterprises Enacts Poison Pill to Guard Against Alden Takeover . November 25, 2021 . Wall Street Journal . November 24, 2021.
  28. News: Bruell . Alexandra . Lee Enterprises Board Rejects Alden's Acquisition Offer . December 11, 2021 . Wall Street Journal . December 9, 2021.
  29. News: Turner . Jonathan . Alden Global Capital takes Lee Enterprises to court over failed board nominations . December 28, 2021 . QuadCities.com . December 21, 2021.
  30. News: Fischer . Sara . Alden Global Capital sues Lee Enterprises after rejected takeover bid . December 15, 2021 . Axios, republished on Yahoo News . December 15, 2021.
  31. News: Edmonds . Rick . Alden Global Capital loses lawsuit to nominate its slate of candidates for Lee Enterprises' board . February 20, 2022 . Poynter.org . February 15, 2022.
  32. News: Hayden . Sarah . Lee Enterprises shareholders reelect three directors amid hedge fund fight . Quad-City Times . March 10, 2022 . May 20, 2022.
  33. News: Fischer . Sara . Scoop: Huge layoffs expected at Lee Enterprises . May 3, 2022 . Axios . May 3, 2022.
  34. Web site: Lee announces grant program to provide marketing assistance to local businesses impacted by COVID-19. Lee Enterprises. April 20, 2020.
  35. Web site: Lee Enterprises sells media assets in Coos Bay. Coos Bay World. 23 January 2020 . en. 2020-02-03.
  36. News: Sale of Coos Bay World Announced. Dirks, Van Essen, Murray & April . January 25, 2020 . Faorfield (MT) Times .
  37. Web site: Lee Enterprises sells papers in Santa Maria, Hanford. Report. Santa Maria Times Staff. Santa Maria Times. 13 March 2020 . en. 2020-03-15.
  38. Web site: Jenkins . Kevin . June 29, 2023 . Better Newspapers Inc. buys four papers from Lee Enterprises . February 29, 2024 . Daily Journal.
  39. Web site: 2023-09-06 . Wick Communications to acquire Flagstaff's Arizona Daily Sun . 2023-09-07 . Editor and Publisher . en.
  40. Web site: 2023-10-27 . Paxton Media Group Acquires The Southern Illinoisan Newspaper . 2023-10-28 . WPSD Local 6 . en.
  41. Web site: Daily Print and Digital . Lee Enterprises . 29 December 2022.