There were few reporters there at 9:10 AM when I arrived, but I decided Missoulians needed to know the truth of what’s happening to their news source. I’m going to tell you right now that I was disappointed. I fully expected to be thrown out of the building, ala The Godfather.
I sat down and began typing, knowing that this story was fast becoming ‘dull’ and ‘ordinary.’ Surely reporting the news in a place where the ‘news’ isn’t appreciated would get me tossed. Instead, Missoulian publisher Mark Heintzelman came out and talked with me.
Well, at least I’m talking to the main guy. I reported on him back in December in a post called How Long Does the Missoulian Have? How Long Does Montana? In that post we discussed the recent subscription rate hikes for the paper, and Heintzelman’s written defense of them. We’ll get into Lee Enterprises financials a bit later, but for now, look at what I said back then:
I'm sorry Lee is struggling, and I'm sorry a lot of reporters here in Missoula will eventually lose their job because of the changing industry and poor management. I use these stories several times a week to write stories on my own site, however, so it'll be a loss.
But what can you do? Already Ochenski is gone and what I consider breaking stories aren't reported on for days. This state used to have a rich media tradition, but I guess that's gone now. And what about next year when everyone has to pay for even basic TV? This is not a good trend. I guess we want people to be uniformed.
My advice to smart reporters would be to jettison this failing business model, get some Kickstarter campaign going, and band together to create an online-only model that has some real advertising muscle behind it. People want news, just not like we have now.
- Do you want to comment on the recent staff firings?
- Why isn’t Lee Enterprises reporting the Johnson/Dennison firings?
- Can we discuss the recent firings and lawsuit that happened yesterday?
- Have you fired editor Sherry Devlin?
On that last point, I’m referencing an assertion made by MT Cowgirl late last night when she said in New Problems Emerge With Lee Newspapers:
BREAKING: Apparently, the Missoulian is also now looking for a new Editor... At the time of this posting (10:30 pm Wed) it is not known happened to current editor Sheri Devlin, whether she has resigned in disgust, or been forced out by some new vulture capitalist scheme, or what have you. “
I’m not surprised by this at all. I fully expected to be stonewalled when I went in there, and I didn’t think I’d learn much more than what the paper reported about itself last night. I figured I’d at least go up there, if for no other reason than to increase my stock photo collection:
Don Pogreba over on Intelligent Discontent has been pointing this out a lot lately, and I’m sure he began to notice as far back as a few months ago, the number of ‘fluff pieces’ that started to appear across the whole of Lee Enterprises. You could already see the desperation in the advertising – skuzzy videos, terrible click-bait, and every other gimmick to try to squeeze every penny from you that they can.
Most serious websites don’t engage in advertising, and they encourage you to do the same. That’s hard to take when you’re making hundreds or thousands of dollars a month on simple clicks, but what they get at is relationship. When you’re forcing crap – and the Lee Enterprises advertising is crap – down your readers’ throats, how do you expect them to feel? It’s clear that you don’t value them that much, and that you’re more interested in clicks and page views than meaningful engagement and long-term relationships.
That’s fine, and it’s important to mention that the reason the Missoulian is suing five of its former employees is because they “jointly planned their departure from the company after [sales director] McGowan was demoted.” That’s not really much of anything, but you have to figure they were “using company time” to come up with a game plan for a marketing firm “that would directly compete with…the Missoulian.”
That’s small potatoes, if you ask me. I mean, who hasn’t used company time to figure out what they’re going to do next? It’s why smart companies have buy-out or dismissal clauses so you can get rid of that dead weight fast. However, it appears that these employees did a bit more than that, and the main guy “advised employees of the Missoulian to copy their marketing and advertising information from company-owned computer hardware,” and even a “forensic computer analysis showed” this was done.
Wow, that’s a bit more…like theft. Honestly, I had to laugh when I read this last night, for it reminded me of when I got fired from EF in China…though the circumstances were completely backwards. Then, I uploaded all the files I’d created so other teachers could use them. This was stuff the company should have created, but they’d had their head so far up their ass thinking of sales that they didn’t realize content was the driver of those sales. Sales & Marketing…I have to shake my head.
That’s a big no-no, but remember, these are all assertions by the Missoulian against former employees just as a lawsuit is getting started. Still, I had a no-compete clause in my contract…did those Missoulian workers? Maybe not, and that could be why the paper is using its position as a mouthpiece so that it can gain favorable attention in the community, creating goodwill for a potential jury pool, or at least forcing a settlement before a jury trial comes about. More than that, however, it destroys the fledgling marketing business that was trying to edge into the Missoulian’s advertising profits and marketing income, which sustains their business while sending a message to other would-be usurpers, ‘back the hell off.’
Something tells me that the five former employees don’t stand a chance, and that one of them will crack and their chances as a whole will fall apart and blow away in the wind. I dunno, I only ever took Business Law one semester, and that during a squeezed-in summer semester, but something tells me those guys are screwed. Something also tells me that the Missoulian has betrayed a certain level of trust, and I knew that when the story appeared last night. They’re inserting themselves into the story in a way that shows bias, and shows that when it comes to certain issues, they will take sides and even press for those sides.
Now, editorial writing does this all the time, but I’d like to get back to the recent dismissal of Johnson and Dennison, for it points to an overall lack of integrity with Lee Enterprises, and right at a time when quality is going way down. This causes desperation, and lashing out at an upstart business edging into a market that’s controlled by a failing media giant is one thing to lash out at. Right now we know Lee Enterprises is desperate, for we saw that with their layoffs. Now we see them scrambling for other revenue sources, all the while cutting off those that want to compete.
Lee Enterprises started way back in 1890 when A.W. Lee bought the Ottumwa Daily Courier in Iowa. Nine years later he expanded by buying the Davenport Times. Just before the Great Depression, in 1928, the holding company Lee Syndicate Co. was formed. Holding companies were created so that shell companies could own stock in other companies, minimizing risk while boosting benefits. That didn’t do too much over the next ten years of misery for the country, but it probably helped when it was time to reorganize again, this time in 1950.
That’s when Lee Enterprises, Inc. got going, which was really a “corporate umbrella” for the various Lee holdings. Lee Enterprises bought the Missoulian together with six other Montana newspapers in 1960 for $6 million. In 1969 the company went public and by 1990 they had $44 million in net income each year.
The company was doing well until 1997 when the Pacific Northwest Publishing Group was acquired. In hindsight, this was a terrible deal, one that drove up costs without giving much in the way of revenue. Most of those holdings were ultimately sold in 2000 to Emmis Communications Corp. for $560 million. Instead of getting their ship in order, however, Lee’s management decided to buy Howard Publishing Inc. for $694 million in 2002. They got 16 papers in this deal, and a lot of headaches to boot. All of that began to weigh heavily on the company. By 2007 mandatory pay freezes were in place across many papers, something that lasted for years. Those state worker waiting a session or two between pay hikes? Chances are the people reporting on them didn’t even have the prospect of a pay raise.
In 2011 the company filed for bankruptcy. In 2012 Warren Buffett stepped in and bought up 3.2% stake in the company and then in 2013 Berkshire Hathaway reorganized the company’s debt in such a way that they could remain a going concern.
All of this played havoc on their stock. Lee Enterprises is based in Davenport, Iowa, and they’re traded on the New York Stock Exchange as LEE. They haven’t issued a dividend since August 2008, interrupting a steady 3-quarters-a-year payout string that had started back in 1987.
On June 4, 2004, Lee Enterprises saw their stock reach an all-time high of $49 a share, and then things began their slow decline. The next summer they were down to $42 and then in June 2006 it was $28. In February 2007 it rose to $34, the highest it’s been at in more than half a decade, thanks in large part to the news of staff pay freezes. Today you can buy Lee Enterprises stock for $3.15 a share.
The Missoulian has 66,700 daily readers, but what’s really astounding is that Mondotimes totally undercuts Wikipedia and lists the figure at 25,439 for the circulation. Lots of people are reading it, however, and there are lots of ways to look at this story, and I encourage you to do so. I mean, on the one hand, we’re paying for news. On the other, we’re enabling poor management and the loss of quality.
I’m sure we’ll see lots more reporting on these issues…just not by Lee Enterprises. Lee Enterprises probably won’t say more than what they have, and the blogs are limited in what they can do. The other newspapers of the state don’t want to point out their industry’s failings, and the TV networks are…well, hopeless at best.
So what are Montana citizens to do today, in a state where newspaper readership has historically been high and many papers have competed?
I don’t know.