I am a Post-Dispatch retiree and proud member of the United Media Guild, which represents Post-Dispatch employees.
I was surprised at Alden Global Capital’s move recently to buy Lee Enterprises and the Post-Dispatch, and Lee executives apparently were as well.
Alden is a secretive hedge fund that has quickly, and with remarkable ease, become one of the largest newspaper operators in the country. Then it launches an aggressive cost-cutting, which, according to The Atlantic, “Alden can operate its newspapers at a profit for years while turning out a steadily worse product, indifferent to the subscribers it’s alienating.” This has been the case around the country! St. Louis is its latest target.
As of this writing Alden now says it owns six percent of Lee and made a cash offer to purchase the rest of the company for pennies on the dollar of what Lee paid when it bought Pulitzer Publishing (the paper’s former owner). It needs some 10 percent to initiate its hostile takeover.
Post-Dispatch employees applaud the announcement by Lee last week that it was adopting a “poison pill” plan which will allow current shareholders could buy shares at a 50 percent discount or get free shares for every share they already own. Flooding the market with additional shares would make it more expensive for Alden to acquire a controlling stake in Lee.
Lee purchased Pulitzer Publishing in June, 2005, a move which nearly sunk Lee. The $1.46 billion purchase price got Emily Pulitzer nearly half a billion dollars but has kept Lee in debt ever since.
In 2011, Lee declared bankruptcy but emerged two months later and continued to pay off its debts, in part by stripping the Post-Dispatch of badly needed resources.
The Post-Dispatch had a paid circulation of 280,000 when Lee bought the newspaper 16 years ago with a newsroom of more than 300 people. The latest numbers list circulation at 48,949, a drop of 82.5 percent since 2005.
The newsroom has shrunk to a staff of about 78.
What kind of steward has Lee been to the Post-Dispatch and the St. Louis community?
Joseph Pulitzer Jr. once said he would never sell his grandfather’s heritage “for a pot of gold.”
After he died, Emily Pulitzer had no interest in keeping the newspaper. She called Lee a perfect match for the Post-Dispatch.
One thing can be said about Lee: Unlike Emily Pulitzer, Lee wants to stay in the newspaper business. Post-Dispatch employees and St. Louis readers have to hope that they do.
MICHAEL SORKIN
United Media Guild (retired)
Former Post-Dispatch investigative reporter
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