Lee Enterprises Declares Bankruptcy
The end of the year isn’t bringing any relief for newspaper publishers as they continue to confront declining ad revenues, and in at least a few cases, bankruptcy. The list of newspaper publishers that have sought legal protection from debtors now includes Lee Enterprises, which publishes 48 daily newspapers around the country, including the St. Louis Post-Dispatch. It disclosed Monday that it is filing for Chapter 11 bankruptcy protection.
Lee, which was founded in Iowa in 1890 and has around 6,200 employees, currently carries $994.5 million in debt, compared to total assets valued at about $1.15 billion.
The company hopes to use its bankruptcy reorganization to defer debt payments currently scheduled for April 2012 to 2015 and 2017. The bankruptcy is “prepackaged,” as it already has the support of the company’s creditors, which should allow Lee to leave bankruptcy within a few months.
Like other big newspaper publishers, Lee has seen a dramatic drop in revenues in recent years because of a combination of secular declines attributed to changing technology and broader economic factors. In the company’s fiscal year 2011, which ended in September, total revenues came to $756 million -- down 3.1% from $780.6 million in 2010 and 32.5% from $1.12 billion in 2007.
As noted, Lee isn’t alone in declaring bankruptcy.
The high-profile Tribune bankruptcy case, which began in December 2007, is grinding into its fifth year, with no end in sight. Rival groups of creditors sued current and previous Tribune executives, banks that financed the ill-fated $8.7 billion deal and financial consultancies that signed off on the deal.
The Star Tribune of Minneapolis filed for bankruptcy in January 2009 and exited under new ownership in September of that year. Philadelphia Newspapers LLC filed for bankruptcy in February 2009, before finally emerging from bankruptcy protection after tortuous legal wrangling in October 2010.
The Journal Register Company also filed for bankruptcy in February 2009, exiting Chapter 11 in August of that year. Freedom Communications, which publishes the Orange County Register, declared bankruptcy in September 2009.
In January 2010 Affiliated Media -- the corporate parent of MediaNews Group, which publishes The Denver Post, Oakland Tribune, San Jose Mercury News and Detroit News -- filed for Chapter 11 bankruptcy protection with a "prepackaged" plan approved by lenders.