In a move the United Media Guild had long feared, Lee Enterprises announced it is moving the design and copy-editing work at the St. Louis Post-Dispatch to its design/editing hub in Munster, Ind., continuing the company’s looting and decimation through greed-driven staff cuts and consolidation.
Lee Enterprises’ Executive Chairman Mary Junck has overseen the layoffs of hundreds of journalists while enriching herself with more than $40 million in compensation.
“As far as I can tell, the St. Louis Post-Dispatch has no permanent city hall reporter, no science reporter and no education reporter,” UMG member and retired Post-Dispatch reporter Michael Sorkin said in a Facebook post about the latest consolidation. “And soon it will have no copy editors or national/international news editors – the editing and headlines will be done remotely, in Munster, Indiana.”
One way loyal newspaper readers can fight back, Sorkin says, is to remain subscribers.
UMG president Jeff Gordon said Post-Dispatch management had long resisted the industry-wide trend toward production consolidation, even as Lee outsourced the design and editing functions of its other newspapers – mirroring the consolidation at other newspapers owned by Gannett, GateHouse and other chains.
“Such outsourcing inevitably weakens the newspaper, since editors with little knowledge of the St. Louis region will be editing copy, writing headlines and designing pages of the Post-Dispatch,” Gordon said in a post on the UMG website. “But our remaining members will do their best to maintain the P-D’s high journalistic standards and keep serving the community.”
CONSOLIDATION, BUYOUTS, SMALLER BUILDING
The Post-Dispatch was among the last chain-owned newspapers of its size to retain its design and editing jobs. But that is no consolation to the eight Guild members now facing layoffs, Gordon notes.
In addition to eliminating local editors, the Post-Dispatch is also offering buyouts to both Guild-represented and exempt employees, and Lee recently announced the sale of the Post-Dispatch building on North Tucker Avenue and an agreement to move its operation to a three-story building at 901 North 10th Street owned by its new landlord StarLake Holdings.
STILL PROFITABLE, BUT REVENUE DECLINING
The Post-Dispatch remains a profitable newspaper, Gordon said, but its revenues continue declining, as they have across the industry.
Lee wants to maximize its cash flow so it can continue paying down its onerous debt at an accelerated rate and refinance it at better terms.
Dissident shareholder Carlo Cannell has been highly critical of Lee’s management, urging a makeover of the company’s board of directors.
Cannell’s effort could draw the interest of vulture capitalist firms like Alden Global Capital, which is buying up and stripping down newspapers across the country.
That has also given Lee more motivation to run an even leaner operation, since potential bidders like Digital First (backed by Alden) and GateHouse (backed by Fortress Investment Group) target companies they believe they could squeeze more money from.
Lee is operating on the premise that if there is nothing left to squeeze, maybe the vulture capitalists will leave them alone.
“In the meantime,” Gordon said, “its newspapers suffer.”