By Greg Gackle, Principal
GAH, Inc.
November 12, 2008
Lee Enterprises (parent of Quad City Times) suspended its dividend last week, triggered by the decline of its stock price and worsening debt ratios. The newspaper chain's stock price fell below $1.50 a share in trading this week.
While management sounded confident the company's debt ratios would improve sufficiently in 2009 to allow reinstatement of the dividend, a Deutsche Bank analyst gave Forbes magazine a more pessimistic view.
The newspaper chain also is cutting company matching contributions to employee retirement accounts, suspending profit-sharing with most employees and suspending corporate executive bonuses for a year.
Figures from the newspaper industry's Audit Bureau of Circulations (ABC) for the first half of 2008 showed an accelerating slide, a decline of 4.6 percent compared to a 2.6 percent rate of decline for the first six months of 2007.
One of the bright spots for Lee was a 1.6 percent weekday circulation increase at the Quad City Times to 50,820.
If the audit bureau numbers don't leave you with a negative feeling about the newspaper business, here are a couple other items in just the past two weeks:
• The Christian Science Monitor will cease publication of its Monday through Friday newspaper and offer only an online edition come April. It is the first national newspaper to end its print edition altogether. Monitor subscriptions have fallen from a high of 220,000 in the 70's to its current 52,000 circulation.
• Gannett, which owns the Des Moines Register and 84 other daily newspapers, announced it would cut an additional 3,000 jobs in December. That's in addition to 1,000 positions trimmed in August by the chain.
Tough times at the roulette wheel, too
Isle of Capri Corp. executives are taking a 25 percent pay cut, according to Rueters News, as the economy and increased gambling competition cut into revenues.
Bernard Goldstein, founder of the Isle of Capri and former Bettendorf resident, earned $543,000 last year, Rueters reported. Goldstein stepped down as chief executive officer last year, but remains as chairman of the board. His son Robert is an executive vice president of the gambling enterprise. Isle stock was down to $3.46 per share this week. In April 2006, the stock hit a high of $33.86.
Newspapers out of presidential ad loop; Obama campaign spends $8 million on web ad buys in 2008
Local newspapers were filled to the brim with political news this election season as well as many ads for local politicians, but neither presidential candidate relied on regional or local newspapers advertising. A sign of the changing political advertising landscape was Obama's campaign spending nearly $8 million on web ads (Google, Yahoo, Facebook, news web sites and other ad networks) through October of this year. McCain hasn't released a list of his expenditures yet. Television - as was apparent in both local and national campaigns - remains the number one choice for reaching out to voters.
