If you don’t read Inside Tucson Business you missed David Hatfield’s January 21st Media column. Hatfield reports that Lee Enterprises, which owns the Arizona Daily Star, is loaded with cash. In 2006 Lee reduced its net debt by $179 million. In 2007 the reduction was $135 million.
Lee has been so successful at milking its cash cows (my words, not Hatfield’s) that it plans to buy back thirty million dollars worth of its own stock.
In the meantime newspapers in Tucson seem to be headed into the death spiral common to papers across the nation. Owners interested only in continually increasing cash flows cut news staff in order to make up for decreasing ad revenue. As news coverage declines so does readership, and as readership declines so does ad revenue. To make up for loss of revenue you cut wherever you can but the easiest cuts are made in the newsroom
A story on NPR this morning reported that yet another LA Times editor has resigned in protest over a four million dollar cut in its newsroom budget just as we are rounding into a peak news year.
Meanwhile, here in the Old Pueblo the Star cut eleven folks from its newsroom and cancelled Ernesto Portillo’s column, reassigning him to general features. (Other money-saving firings in the media world: Jeff Smith from the Citizen and Sal Quijada and Mark Horne from KGUN)
It’s good business to reinvest in your infrastructure. In the newspaper business the most important part of that infrastructure is your news staff. The Star should be hiring, not firing. Lee Enterprises looks able to afford it.
The Data Port doesn’t hasn’t been in the prediction business, but I’m going out on the limb here: Lee will soon sell the Star to Gannett, a move that has been long rumored but is now imminent. When that’s been done it will cancel the joint operating agreement that has kept the Citizen alive and fold the Citizen into the Star.
And then there will be lots of newspaper people looking for PR and advertising jobs.