County Counting: Accuracy (if not openness) Counts at PostStar.com

by contributor Mark Wilson

Part of a series on the troubles at The Post-Star and its parent company Lee Enterprises.


Glens Falls Post-Star Editor Ken Tingley is having difficulty with arithmetic again. On PostStar.com last week, his Front Page blog post titled "Showing you is different than telling you" referred to "all 58 counties in the state" (NY). The post appeared Thursday afternoon. A reader comment pointing out the error Friday morning was never posted, and yet by noontime the error disappeared without a trace, replaced by the correct number (click image to enlarge).

As has been mentioned before in this series, the Post-Star and Mr. Tingley have an on-again-off-again relationship with professional journalism standards, particularly where online content is concerned. The About Us page at PostStar.com still promotes the newspaper as a "twenty-nine-thousand circulation, daily newspaper" even though the newspaper’s daily circulation dropped well below that level in 2010 (yet the same page has updated the awards the paper and its employees have received at least through 2011).

Of course this is not the first time Mr. Tingley has made mistakes on his blogs. He most famously twice used the term "proof readers" in a post (and comments) scolding commenters and letter writers for lax grammar. This, though, is the first instance we know of where a factual mistake was corrected after the fact without acknowledgement.

The level of professional journalism to which Mr. Tingley aspires has a low tolerance for ethical corner cutting. In its section devoted to accountability, the Society of Professional Journalists’ Ethics Code states: Admit mistakes and correct them promptly.*

Treatment of online errors is not a new issue to the profession. The American Society of News Editors addressed the subject in 2001.

In 2008 the Columbia Missourian devoted an entire blog to the topic, complete with historical context and a common sense comprehensive policy statement. It also addresses how severely the credibility of news organizations is damaged by lack of candor and transparency.

Three years ago, a commentary at the Columbia Journalism Review referred to an article at MediaBugs.org that advanced another set of common sense standards for correcting factual errors in online content, many of which had already been widely adopted throughout the industry.

None of the best practices advanced by journalism’s ethical watchdogs condone the sort of surreptitious content scrubbing that happened last week at PostStar.com.

For a newspaper that sells itself as a model of professional integrity and has built a reputation for shining light on less than transparent operations in public offices, the honorable and consistent recourse would be for Mr. Tingley and the Post-Star to adopt a firm set of online correction standards and post them prominently at PostStar.com. And then, of course, adhere to them.

Failing that, here are a few handy poses Mr. Tingley might strike while defending or explaining future lapses, should the question of New York State counties arise again:
The Global/Universal Posture: Its so hard to count them when they keep moving around—the constant rotating on the earth’s axis, and revolving around the sun. . .and don’t get us started on the ever-accelerating expansion of the universe!
The Hyperlocal Posture: Our news coverage is so close-to-home that we don’t give a hoot how many counties lie outside our circulation radius!
The Nativist Posture: We refuse to acknowledge the existence of Oswego, Otsego, Otisco and Otasco Counties until they give themselves English names!
The Where’s Waldo Posture: Dude, for a moment there we thought we were living in California.
The Taught-to-the-Test Posture: 58 out of 62 is 93.5%. We still get an "A."

Of course, when all else fails, there’s always the truth: Hey, I’m human. I made a mistake. I thought I knew a fact and I didn’t and I didn’t bother to have another editor read it before I sent it out over my name and under the Post-Star brand.

(Mark Wilson is an editorial cartoonist and illustrator living in Saranac Lake, NY. Since 1999 his work has appeared in news media across upstate New York, including, from 2000-2003, the Post-Star.)

*Note to readers: Links to charts and graphs from earlier postings in this series were broken in December 2012. They have been restored.

Beating a dead horse at The Post-Star

by contributor Mark Wilson

Part of a series on the troubles at The Post-Star and its parent company Lee Enterprises.

Post-Star Editor Ken Tingley is charging into the Valley of Death once again. In the latest effort to rescue up the battered image of daily newspapers, Mr. Tingley’s Sunday column contrasted newspaper reports on unfolding events in the Boston area last week with information posted to social media outlets. Despite abundant evidence to the contrary, he generalized that, “the beauty of print journalism is [that] you get to check and recheck your facts. There is time to evaluate and debate the context of a news story, where it should be played and even which words should be used.”

Even if you discount the obvious embarrassment of the New York Post's two glaring front page falsehoods, Mr. Tingley seems to have already forgotten the mistake made by the Associated Press—the service that the Post-Star relied on heavily for its coverage of the bombing, siege and manhunt—when it erroneously reported the imminent arraignment of both suspects on Wednesday. Had the rumor moved over the wire at press time, it is likely that understaffed newspapers like the Post-Star would have run it. Mr. Tingley also conveniently ignores the fact that his editors, under the Post-Star brand, retweeted the AP’s announcement of the bogus news story, immediately and without independent verification or subsequent retraction.

The real lesson from last week—one evidently lost on Mr. Tingley—is that in news gathering nothing beats an eye-witness account. Sadly, it is a resource that newspapers and their hired wire services are less and less able to afford. Fortunately, if you can tolerate all the derivative nonsense, such accounts may often be found on the internet.

In concluding his Sunday column, Mr. Tingley expressed his hope that “maybe there is a place for a plodding old war horse like the daily newspaper after all.”

It is a fittingly dated metaphor: The last US Army horseback cavalry charge took place seventy one years ago on the Bataan Peninsula, Philippines. Today’s military horses are used for reenactments, parades and funerals.

Post-Star paywall gets bigger

The Post-Star seems intent on making its reach as small as possible, somehow calculating this will help their bottom line. Despite plummeting quality, such as managing to misspell the name of its own hometown in a baseball box score yesterday, and a rapidly shrinking workforce, the Glens Falls daily has seen fit to nearly triple its newsstand price in the last few years.

On May 1 of this year, the paper announced that it would be imposing a paywall on its website. Users would be limited to 15 free article views per 30 days.

Apparently without warning (I can not verify this due to the restrictions), the paper at some point recently has reduced this to 10 free articles.

Buy A Falling Star

by contributor Mark Wilson

Part of a series on the troubles at The Post-Star and its parent company Lee Enterprises.

The Audit Bureau of Circulations has released paid newspaper readership figures for the six month period ending March 31. The report brings more hard news for the Glens Falls Post-Star. With average daily circulation standing at 24,578, the paper showed a loss of 1,455 paying readers since last October. Compared to a year ago, the average daily circulation is off 1,029 or roughly 4 percent. This places the Post-Star in the middle of the pack of nearby newspapers—the Albany Times Union showed a slight gain in paid readership over last year, while the Saratogian and Troy Record reported heavier losses of 5.7% and 7.5% respectively. Of the four regional papers, only the Post-Star showed deteriorating numbers in the second half of the past twelve month period.

With the latest report, the Post-Star has officially broken below the 25,000 average daily circulation level, a threshold which many organizations recognize when bestowing annual newspaper awards. With the general collapse of newspaper circulation over the past decade, the number of newspapers occupying the under 25,000 category has swelled, far surpassing occupants at higher levels.

While the Post-Star’s circulation losses are middling in comparison with neighboring papers, its performance against the rest of the newspapers owned by Lee Enterprises were considerably worse. Over the past six months, the Post-Star suffered the third highest percentage circulation losses of all fifty papers owned in whole or part by Lee. Perhaps of greater concern, against the firmament of Lee papers, the Post-Star has dropped farther than any other over the past five-and-a-half-years, dropping from the twelfth largest Lee property in October 2006, to twentieth (the ranking figures in the accompanying table take into account the various Lee properties that either merged or were sold over the years).

The Post-Star’s harrowing circulation drop might well explain why the newspaper moved so suddenly at the end of April to subscribed access for its online content: while plenty of people may be reading the Post-Star, fewer and fewer are buying it.

Hitting the Paywall: The Post-Star and other Lee properties resort to fee-for-online content

Part of a series on troubles at The Post-Star and its parent company Lee Enterprises

by contributor Mark Wilson

The Post-Star of Glens Falls announced in Monday’s editions that as of midnight May 1, they will charge a subscription for access to most online content. Officials at Lee Enterprises, Inc.—the Post-Star’s Davenport Iowa-based corporate parent—announced in late March that most of the company’s 48 daily newspapers would erect a paywall before the end of the year. The announcement comes at a precarious time for the Post-Star, Lee Enterprises and newspapers in general. Over the past decade, the industry has been staggered by numerous body-blows, many delivered by online and mobile technologies; some, sadly, self-inflicted. National, local retail and classified advertising, once roughly three quarters of Lee’s operating revenue dropped by over 40% between the second quarter of 2006 and the most recent second quarterly report released in early April. While part of that loss can be blamed on the national recession (income which may eventually return) most of the missing ad revenue has been steadily raided by national online advertising engines like Google, Groupon, Monster and Craigs List. That revenue is gone for good. As reported in earlier installments, much of Lee Enterprises’ financial woes stem from its wildly over-leveraged and over-priced purchase of the St. Louis Post-Dispatch (and the rest of the Pulitzer chain of newspapers), overseen by CEO Mary Junck and CFO Carl Schmidt in 2005. The resulting debt landed the company in bankruptcy court at the beginning of this year. The court-ordered reorganization seems only likely to prolong a grim reckoning for another few years.

At the annual meeting of Lee shareholders in March, corporate directors rewarded Junck and Schmidt with $500,000 and $250,000 bonuses, respectively, for piloting the company through a “successful” bankruptcy. While this amounts to an insignificant fraction of Lee’s annual costs, at a time when Lee headquarters was ordering damaging layoffs at papers across the country, the bonuses attracted unwelcome attention.

At the local level, the fiscal mess in Iowa has translated into increased layoffs (diluting valuable local content) and increased prices passed along to the consumer. Either one of the increases would be a tough sell to a readership in the grips of a national recession. Combined, they constitute an assault on even the most dedicated or dependent audience.

In April 2010 the Post-Star doubled the newsstand price of its print editions, little more than a year after laying off 15.5% (25) of its listed staff (business and editorial). Post-Star circulation losses of 4.62% the year of the layoffs ballooned to 10.58% after the price hike—the fourth worst circulation losses in Lee’s entire portfolio. Needless to say, loss of paying readers only compounded advertising revenue losses.

Of course, two years ago much of the paying Post-Star readership could easily retreat to the free content available at PostStar.com (visits to which have been growing steadily for years). The hope underlying yesterday’s erection of the paywall is that the paper will manage to reconvert enough of these online free-readers into paying news consumers, thereby reversing circulation revenue losses (which—in context—are still only 6.6% of advertising losses).

The success of this plan or its failure—a potentially accelerated migration of readers—hinges on the outcome of two major uncertainties: The first is what role increased free-print and online competition in the Post-Star’s circulation region—NCPR, Adirondack Almanack and Denton Publications to the north, Saratoga Today, WAMC, the Times Union and YNN (Time Warner Cable) to the south, and the Chronicle within the city—will have in providing Post-Star readers with satisfactory alternatives. The second is how the Post-Star’s most recent layoffs—including the closure of its Saratoga Bureau and the attenuation of its northern coverage—might undermine readers’ loyalties in those vulnerable regions.

Statistically, the answer to these questions will begin to emerge in six months when the Audit Bureau of Circulations reports semi-annual circulation and online activity numbers.

Anecdotally, the answer may be more immediate. The Post-Star’s report yesterday of the paywall’s imminent introduction drew a high volume of comments from online readers. By six o’clock yesterday 82 readers had registered 94 reactions. A casual count of those comments showed roughly three of every four commenters objecting (a majority forcefully) to the move with one of every eight either resigned to or tepidly in favor of the move.

Post-Star to go behind paywall

In news predicted on this blog last month, The Post-Star announced that starting tomorrow, it was putting most of its online contentbehind a metered paywall, similar to the system used by The New York Times. According to the daily, readers will be to access for free 15 articles a month. Further articles will require an online subscription, whose cost varies depending on length and whether the user is also a print subscriber.

The gutting of The Post-Star's content continues

Mark Wilson has a post over at Adirondack Almanack on the further gutting of the news department at the Glens Falls daily.

The curious intersection of journalism, editorial agenda and loss of faith in the media

It's pretty clear from anyone reading Post-Star editorials is that the paper's agenda is devoted to making people believe that Adirondack Park Agency regulations are suffocating the (human) life out of the Adirondack Park. This is despite the statistical fact that the Park's population is growing *faster* that New York's population as a whole.

However, that agenda is also reflected in its supposedly objective news coverage. I've written about this before so I won't belabor previous points. But more recently, reporter Jon Alexander described Hamilton County as 'on the endangered list.'

Now, this was tagged as 'analysis' (ie: opinion) but it does give some insight into his point of view, which happily corresponds with the editorial board's agenda. In a column in Adirondack Almanack, John Warren took serious issue with Alexander's 'analysis.'

Yet in a purportedly objective news story yesterday (doesn't seem to be available online), Alexander notes that Saratoga County's population is growing while Most of the North Country continues to hemorrhage population...

(Again, don't forget the data you'll never see the daily report on)

But the graphic accompanying the article showed that from 2010 to 2011, Hamilton County lost 0.8% of its population, Essex County lost 0.3% of its population,Washington County lost 0.2% of its population and Warren County actually *gained* population. (And even Saratoga County's 'boom' was a modest 0.4%)

While these numbers aren't stellar, they hardly constitute a 'hemorrhage.' But when there's a narrative to conform to...

Additionally, Hamilton County lost 42 residents last year. If the county continue losing that many people every year, it would take 115 years for the 'endangered' county's population to run out. And there's no indication yet that this decline is a long term trend. Hamilton County *gained* population in every census from 1950 to 2000. And since the county was founded, its population has increased in 14 out of the 20 censuses. The county's population has had modest ups and downs in its history, but mostly ups.

But this is not the only seeming intersection of editorial agenda and journalism.

Another of the daily's agendas is its crusade against school spending, which it attributes to malefic and greedy teachers unions.

In an article on Friday (also not available online), education reporter Omar Ricardo Aquije described a meeting between the Glens Falls school board and residents regarding the district's proposed budget.

According to the article, both in text and graphic, the overall tax levy would remain identical from the current fiscal year to the next.

And yet, the jump headline on the inside page B5 blared "Residents question raises, tax increases."

I questioned this discrepancy in an email; the reporter indicated that his figures were correct and that the headline (typically written by layout people... or copy editors, assuming they still have any) was incorrect. The reporter wrote the story honestly. But the headline writer's mistake, was it incompetence or outright deceit? Neither reflects well on the paper's declining standards.

A correction ran in the following day's issue, as usual in print significantly smaller than the original wrong headline.

I don't have any evidence that this was intentional deceit on the part of the paper's backroom staff (I don't blame the reporter, since his text was correct). But this is a very significant error, given how sensitive a topic school budgets are in this area. It certainly undermines what's left of the paper's credibility when these sorts of significant 'errors' in purportedly objective articles just happen to oh so conveniently jive with the paper's editorial crusades.


But for its faults, at least The Post-Star isn't stealing material from regional blogs and writers. More on that later this week.

Update: Today, managing editor Ken Tingley tells us that credibility is key to what they do. No wonder they're in so much trouble.

Layoffs at Post-Star while parent company gives CEO nice bonus

Part of a series on troubles at The Post-Star and its parent company Lee Enterprises

by contributor Mark Wilson

Following months of seeming good news for Lee Enterprises, Inc., The Davenport Iowa Newspaper corporation which owns the Post-Star, has launched another round of layoffs across its portfolio.

The staff contact page at PostStar.com, which yesterday listed fifty-eight employees in Editorial and Business positions at the Glens Falls paper, today lists only fifty-one. Among the seven missing names/positions are:

• Photographer Aaron Eisenhauer


• Copy Editor Christopher Fitz Gerald
• Saratoga and Washington County Reporter Thomas Dimopoulos
• Washington County reporter Jamie Munks
• Washington County reporter David Taube
• Sportswriter Mary Albl
• Sportswriter Larry Hall

Stacy Perrone has also left the Post Star advertising department, but her position has been filled by Jillian Vitagliano.

Of these seven, Fitz Gerald, Munks and Albl had the shortest tenure at the paper, joining the staff only last Fall. Taube's first bylines and Eisenhauer's first photos appeared in the summer of 2010, Dimopoulos joined the newspaper in March 2007 and Larry Hall, the longest-serving member of the group, dates back over a decade to October of 2001. Similar layoffs have been announced at newspapers throughout Lee's stable of 49 daily newspapers.

In other news, Lee Enterprise this past week filed papers with the SEC declaring a $500,000 bonus for Chief Operating Office Mary Junck, and a $250,000 bonus for Chief Financial Officer Carl Schmidt. The two were credited at last week's shareholder meeting in Davenport with seeing the company through chapter 11 Bankruptcy earlier this year, despite assuring investors less than a year ago that the publisher's dire economic straights were not bankrupting the company.

The two head officers have also staved off delisting of the company stock from the New York Stock Exchange, with the assurance that the company's shareholders would accept a reverse stock split. Last week, Shareholders gave Lee's directors authority to go ahead with the reverse split—a move that could multiply the price of stock shares. The directors must decide on the ratio of the reverse split sometime before June.

Lee remains under a second delisting threat owing to the drop of its market capitalization (the number of outstanding shares times the share price) below $50 million. While recent movement of shares has pushed Lee's market capitalization above the threshold, the company has until next year to strengthen investor confidence and maintain the higher value for the long term.

This week's layoffs and last week's announcement that the web sites of all Lee newspapers will charge visitors subscription fees by the end of the year are the first mobilizations in that effort.

Post-Star likely to go behind paywall this year

A reader pointed me to this press release by Lee Enterprises. In it, the Post-Star's parent company announced a paywall would be imposed on more Lee newspaper websites in the next three months and in most Lee markets by the end of the year. The New York Times recently announced that net surfers would only be able to access 10 free articles per month, down from 20; it is not clear if Post-Star readers will be able to access any free articles. The Iowa-based corporation certainly hopes this process goes more smoothly than the disastrous and quickly abandoned PostStar.net scheme of the early 2000s.

Bad News On the Doorstep: Lee’s First Quarter Report

(by contributor Mark Wilson, as part of his series on the troubles at Lee Enterprises and The Post-Star)

In its quarterly SEC filing for the period ending December 25, 2011, released this week, Lee Enterprises announced its intention to seek stockholder approval for a reverse stock split. The annual meeting will be in Davenport, Iowa in March this year. The report did not state the ratio of the reverse split. Lee CFO Carl Schmidt also foreshadowed trouble for Lee’s NYSE listing with the minimum market capitalization standard, the cure period for which expires next month.

Other bad news in the SEC report:

• Operating revenue declined 3.9% over last year’s first quarter report. This included a 6.1% drop in advertising (digital and print advertising combined). Real estate advertising led the decline, dropping 17.9%.
• Employee compensation dropped 5.7%. The number of full-time equivalent employees dropped 7.2%.
• Debt financing and reorganization costs increased 66% to $3,265,000

While visits to Lee’s digital products increased 10.4%, this good news does nothing for the bottom line. In his From the Editor column last week, Post-Star Editor Ken Tingley lamented: “The problem is more and more readers are visiting newspaper websites for free while abandoning their subscriptions to the newspaper. Unfortunately, we don't make money on our websites.”

He also stated, “We have no plans to charge for use of our website right now. . .”

Bear in mind that this reassurance comes from an organization not known for its candor in reporting on itself. Last May in a letter to Lee's investors, CEO Mary Junck wrote, “We are not, as some in the national media have imagined, staving off bankruptcy.”

Lee Enterprises Inc., with its back to the wall, faces a reverse stock split

(by contributor Mark Wilson, as part of his series on the troubles at Lee Enterprises and The Post-Star)

As a last-ditch effort to raise the price of its stock shares and stave off delisting from the New York Stock Exchange, the Iowa-based owner of the Post-Star has reached the point where it must now seek approval from shareholders for a reverse stock split. The move, if approved at the company’s annual meeting next month, would multiply the share price of Lee stock, automatically raising it above the NYSE’s one dollar delisting threshold, while decreasing each shareholder’s holding by the same multiple.

When the NYSE issued Lee the first of two notices of non-compliance last summer after the company stock’s per share price slipped below one dollar, it gave Lee six months to correct the situation. When that “cure period” expired last week with Lee still trading in the 70¢ range, it became clear that Lee had one remaining avenue to escape being removed from the exchange.

The NYSE’s Listed Company Manual, as provided by Judy Shaw from NYSE’s Media Relations division, allows non-compliant companies one final stockholder-approved remedy if all else fails:

802.01C Price Criteria for Capital or Common Stock

A company will be considered to be below compliance standards if the average closing price of a security as reported on the consolidated tape is less than $1.00 over a consecutive 30 trading-day period.

Once notified, the company must bring its share price and average share price back above $1.00 by six months following receipt of the notification. A company is not eligible to follow the procedures outlined in Paras. 802.02 and 802.03 with respect to this criteria. The company must, however, notify the Exchange, within 10 business days of receipt of the notification, of its intent to cure this deficiency or be subject to suspension and delisting procedures. In addition, a domestic company must disclose receipt of the notification by issuing a press release disclosing the fact that it has fallen below the continued listing standards of the Exchange within the time period allotted by SEC rules for the making of a filing with respect to Exchange notification of that event, but no longer than four business days after notification. A non-U.S. company must issue this press release within 30 days after notification. If the company fails to issue this press release during the allotted time period, the Exchange will issue the requisite press release. The company can regain compliance at any time during the six-month cure period if on the last trading day of any calendar month during the cure period the company has a closing share price of at least $1.00 and an average closing share price of at least $1.00 over the 30 trading-day period ending on the last trading day of that month. In the event that at the expiration of the six-month cure period, both a $1.00 closing share price on the last trading day of the cure period and a $1.00 average closing share price over the 30 trading-day period ending on the last trading day of the cure period are not attained, the Exchange will commence suspension and delisting procedures.

Notwithstanding the foregoing, if a company determines that, if necessary, it will cure the price condition by taking an action that will require approval of its shareholders, it must so inform the Exchange in the above referenced notification, must obtain the shareholder approval by no later than its next annual meeting, and must implement the action promptly thereafter. The price condition will be deemed cured if the price promptly exceeds $1.00 per share, and the price remains above the level for at least the following 30 trading days.

Notwithstanding the foregoing, if the subject security is not the primary trading common stock of the company (e.g., a tracking stock or a preferred class) or is a stock listed under the Affiliated Company standard where the parent remains in "control" as that term is used in that standard, the Exchange may determine whether to apply the Price Criteria to such security after evaluating the financial status of the company.

At the pit of the recession in June 2009, Lee’s board—faced with a similar non-compliance notice after its stock price slid below fifty cents—opted not to pursue a reverse split when the Exchange issued a general moratorium on delisting. No such amnesty is available to the newspaper publisher this time.

If and when the company brings its stock price back into compliance, Lee still faces a second non-compliance notice issued last August when its market capitalization (the share price multiplied by the number of outstanding shares) dropped below $50 million. The reverse stock split will do nothing to improve this number, as the increase in the share price will be balanced by the decrease in the number of outstanding shares.

It is a safe bet that Lee’s financial directors are hard at work on a plan to boost its market capitalization. The company’s first quarter report is due out Tuesday morning.

Down by the Levy: the Sinking of Lee

(a continuing series by contributor Mark Wilson on the troubles at Lee Enterprises, Inc. and the Post-Star)

On April 22nd of this year, the Mississippi River, nearing historic levels, jumped its banks and rose to within a city block of Lee Enterprises’ Davenport, Iowa headquarters.

Inside, financial and executive officers for Lee—the corporate owner of the Glens Falls Post-Star—were planning a junk bond issue large enough to pay off nearly a billion dollars in debt that was coming due within a year’s time. The subsequent failure of the junk bond issue ten days later set off a slide in the company’s stock price, as well as its fortunes, that came to a head last week when Lee sought Chapter 11 protection in a Delaware bankruptcy court. Court papers tabulated by Bloomberg News revealed that Lee and its subsidiary companies had—in the vernacular of real estate bank foreclosures—been under water all along.

Total assets: $1.2 billion
Total debts: $1.3 billion
Net worth: minus $100,000,000

In the initial stage of the bankruptcy case, Lee was granted permission to borrow $40 million more to pay bills, meet payroll and keep its presses rolling. The rest of the bankruptcy proceeding will determine whether or not Lee can extend the due dates on its outstanding debts from 2012 to 2015 and 2017, in exchange for double-digit interest rates. Most of Lee’s creditors have already signed on to the refinancing plan, and it is widely seen that the bankruptcy court will play along. The hope underlying the new debt timeline is that within three years the economy will recover enough to rescue the paper with real estate, automobile and jobs advertising revenue, and that by 2017 news publishers will have figured out how to better monetize their internet traffic and stem the collapse of their print audience.

While the courts sort out the longterm picture for Lee, it might be well to consider a more immediate threat in the company’s path. Back in July, the New York Stock Exchange issued a compliance warning to Lee when the price of its stock slipped below one dollar. The warning stated that if the share price did not regain the dollar mark within a six month “cure period,” the exchange would remove Lee from its trading list.

A useful primer on the significance of a stock delisting can be found online at Investopedia.com. The NYSE Listed Company Manual, Section 802.01 C addresses the delisting timeline for companies whose stock price drops below one dollar.

In short, Lee’s one remaining hope to avoid delisting would be if its stock were to close over one dollar per share on January 6th 2012, having sustained an average closing price of one dollar or more over the previous 30-trading-day period.

Fifteen of those thirty trading days have already elapsed with Lee’s daily closing share price averaging only 65 cents. So starting Monday, Lee’s share price must close at or above $1.35, and keep that price (on average) for three straight weeks. This at a time of year when many portfolio managers are tidying up client accounts by killing off their biggest turkeys. To put it bluntly, Lee’s thirty-three-and-a-half year association with the New York Stock Exchange is over.

Apart from the general stigma of joining the ranks of Fannie Mae, Freddie Mac, Lehman Bros. and MF Global, perhaps the most troubling consequence of delisting is that it may well trigger the automatic sell-off of stock holdings by many of Lee’s institutional investors (many pension funds restrict their investments to listed stocks). This in turn could set off a chain reaction run of individual stockholders, driving the share price—and any chances of eventually paying off its debts—to historic, even unsalvageable depths.

Lipstick on a Pig: Lee Enterprises Declares a “Favorable” Bankruptcy

(a continuing series by contributor Mark Wilson on the troubles at Lee Enterprises, Inc. and the Post-Star)

Despite efforts to spin the news favorably, Lee Enterprises, Inc, the deeply-indebted corporate owner of the Glens FallsPost-Star, announced late Friday afternoon that it had failed to reach a refinancing agreement with at least 95% of its lenders. It will file for Chapter 11 bankruptcy protection later this month. 

The move is an effort by the Iowa-based news publisher to coerce a reluctant six percent of the banks who have lent it money to extend the maturity date of roughly one billion dollars in loans. The loans are currently due to be paid in full this coming April.

The refinancing plan, crafted by Lee earlier this year—after it failed to find backing to pay off the banks by issuing junk bonds—divides its current debt load into three parts:

• a $689.5 million term loan with an additional $40 million revolving credit, both due in December 2015. The interest on this debt will be a minimum of 7.5%.
• a $175 million second-tier loan with a 15% interest rate due in April 2017.
• an unspecified $175 million refinancing deal for the balance of the debt the company incurred when it bought newspapers from Pulitzer, Inc. in 2005.

Lee’s failure to find backing to restructure the remaining Pulitzer debt was the deal breaker for the more cautious lenders who must now be forced by the Delaware bankruptcy courts to accept the pre-packaged bankruptcy plan. In place of a new financing to cover the since-adjusted $138 Pulitzer balance, the bankruptcy will extend the maturity of $126 million of the existing notes to December 2015 at an interest rate that starts at 10.55% and increases by .75% annually.

One other significant condition of the bankruptcy plan is the issuance of 6.7 million shares (roughly 13% of outstanding shares) of stock to be divided among second-tier lenders. 

Diluting stock to this degree will depress the share value of Lee stock. Apart from the impact this will have on individual and institutional stock holders (including any Post-Star employees who hold stock and stock and options as part of their compensation packages), the move means Lee’s stock most certainly will be removed from the New York Stock Exchange listings in the new year. As a condition of continued listing, the NYSE requires a company stock to hold a minimum share price of $1.00 and not drop below that threshold for more than 30 days. Lee’s share price dropped below the threshold in mid-July this year and has not risen above it since. In an official delisting warning issued in August, the NYSE compliance board gave Lee until January to correct the situation. 

A share of Lee traded at 53¢ at Friday’s closing bell—shortly before news of the impending bankruptcy filing was released.

The Latest Circulation Numbers for Lee Enterprises, Inc. and the Post-Star

14th in a series by contributor Mark Wilson

(©2011 Mark Wilson)

The semi-annual report of American newspaper paid circulation was released this week by the Audit Bureau of Circulations. Readership of Lee Enterprises, Inc. daily newspapers continues to drop, with total circulation loss from a year ago at 41,298 (or 2.99 percent).

The Post-Star, which in recent years has suffered some of the worst percentage circulation losses of all Lee newspapers, improved its standing among its peers in the latest filing. The paper—still fourteenth largest in Lee’s stable with average daily circulation of 26,113—lost 665 paying readers since last year. That loss amounted to less than 2.5% of its circulation, which is better than Lee’s average percentage loss since last year, and better than the numbers the Post-Star posted six months ago. A complete breakdown of the latest circulation figures can be found here.

Since the last circulation numbers came out, Lee has combined two Illinois dailies—the Journal Gazette of Mattoon and the Times Courier of Charleston — reducing to 52 the number of daily newspapers owned or partially owned by the company. Since 2008 Lee has shuttered two papers and merged two others. The Davenport, Iowa-based company is still looking to restructure a roughly one billion dollar debt that comes due in just over five months.

On a personal note: Friday, November 4th was Mark Mahoney’s last day as the Post-Star’s Editorial Page Editor, and chief editorial opinion writer. He will soon put his legendary reasoning and writing skills to work for the New York State Bar Association in Albany. As a onetime contributor to Mark’s pages (and who, on at least one occasion, caused him all sorts of grief), I wish him all the best in his new career.

New hires, a significant departure and a welcome return at The Post-Star

13th in a series by contributor Mark Wilson

(©2011 Mark Wilson)

The human resources department at the Post-Star is busy. News today that Editorial Page Editor Mark Mahoney is leaving the newspaper to take a job with the New York State Bar Association is only the latest in a list of recent personnel changes.

Post-Star Managing Editor Ken Tingley announced in a blog post last week that the newspaper recently filled three editorial positions that have been vacant since last summer. The three new writers are Mary Albl and Michael Bonner in sports and Jamie Munks in news, covering Washington County.

As well, in the past week, two other names have been added to PostStar.com’s contact page. They are Danielle Johnson, who will write obituaries, and former Post-Star Assistant Features Editor Rhonda Triller.

Triller returns to the paper's staff after a four-year stint at the Albany Times-Union. In 2007 Triller accepted a copy editing post at the Albany paper. In May 2009 she started a TimesUnion.com blog focused on her newborn triplets. She signed off from the blog (and the Times-Union) this past Monday. Triller’s new role at the Post-Star will be as copy editor.

[The hiring of quality control is long overdue at the Post-Star. In a recent post on his blog, The Front Page, Editor Ken Tingley thoroughly trashed the English language in defense of an editorial which some readers saw as critical of South Glens Falls High School. Unless his ten paragraph post was a deliberate attempt to lend the offended educators some consolation in the knowledge of their comparative literacy, uploading the scolding copy without first vetting it with a proofreader was ill-advised. Welcome back, Rhonda!]

For those keeping score, the recent hires brings to 60 Post-Star employees listed on the paper’s web site. This is four more than last month's low of 56, but one fewer than the names listed on August 2nd. The organization must hire eight more staffers to return to its June 2nd staffing level.

A comparison of the executive and editorial positions listed at PostStar.com to its nearest-sized sister publication in the Lee Enterprises barn shows a sizable staffing gap: The Lacrosse (Wisconsin) Tribune contact page lists 24 employees in these positions while the Post-Star has over forty percent more at 34.

Further Reduction at Lee Newspapers

12th in a series by contributor Mark Wilson

(©2011 Mark Wilson)

In a move yet to be officially announced, Post-Star owner Lee Enterprises, Inc. of Davenport Iowa merged two of its central Illinois newspapers on September 26th. 

The move combined the Journal Gazette of Mattoon and the Times Courier of Charleston into a single publication now called (unsurprisingly) the Journal Gazette & Times Courier.

The neighboring communities of Mattoon and Charleston,12 miles apart, are located in southern Illinois, about 130 miles northeast of St. Louis, Mo. The combined average daily circulation of the papers is roughly 13,000. Since 2006 the Charleston Times Courier has lost over one quarter of its average daily circulation, placing it ninth on the list of Lee Enterprises’ worst performing newspapers.

The move by Lee to merge an underperforming publication with a nearby neighbor may foretell the fortunes of other newspapers in the Lee portfolio. The Lompoc (CA) Record with a daily circulation of 3,874, and the Beatrice (NE) Daily Sun with a circulation of 5,321 have lost even more readers than the Times Courier over the past half decade.  Both may well be merged with larger nearby publications: In the case of Lompoc, the Santa Maria (CA) Times is forty miles away, and the Lincoln (NE) Journal Star is only 43 miles from Beatrice. By comparison, the Auburn (NY) Citizen—whose size and recent circulation losses are in the same ballpark—is over 150 miles from its nearest merger candidate, the Post-Star. This summer Lee placed the staffs of the Helena (MT) Independent Record and the (Butte)Montana Standard (a distance of 68 miles) under a single editor, though the offices of each paper were not combined.

Lee Enterprises, Inc., which is experiencing financial difficulty, has not yet officially acknowledged the merger of the two Illinois papers. However, a press release dated October 10, announcing the appointment of a new publisher at the Carlisle (PA) Sentinel, did mention that Lee wholly owns 48 daily newspapers. Last month the number stood at 49. Lee has yet to report how many staffers were laid off in the most recent consolidation.

Moneyball: Lee Enterprises and the Post-Star by the numbers

Eleventh in a series by contributor Mark Wilson
(©2011 Mark Wilson)

With the end of September comes the end of another semi-annual survey of the number of newspaper readers conducted by the Audit Bureau of Circulations. The results of the latest audit will not be released until the first week in November.

While the ABC’s last audit showed the Glens Falls Post-Star in the middle of a haggard pack of regional newspapers when ranked by percentage of lost circulation, it might be useful to assess the recent performance of The Post-Star in context of the 53 daily newspapers owned by its parent company, Lee Enterprises, Inc. of Davenport, Iowa. After all, for as much as the Post-Star wants readers to see it as a paragon of small-town local journalism, it is ultimately just another property in a corporate portfolio—a corporation under the shadow of overwhelming debt, impending stock exchange delisting and possible bankruptcy.

Lee Enterprises operates 53 newspapers and their satellite publications in 23 states, with heavy concentration in the country’s northern midwest region. As of a year ago, the audited daily circulation of Lee’s properties ranged from 207,145 (St. Louis Post-Dispatch) to 3,821 (Baraboo [Wisconsin] News Republic). With its circulation of 26,798, the Post-Star reached the 14th largest audience in the Lee stable. A year ago the paper accounted for 1.94% of Lee’s entire weekday paid circulation.

Over the five-year span bracketed by the 2006 and 2010 annual reports, while every Lee paper but one posted losses in circulation (combined, Lee papers lost 256,338 paying readers or 15.66%), the Post-Star lost readers (6,473—or 19.46%) at a pace well above the average. In percentage of circulation losses, the Post-Star ranked fifteenth worst of the 56 Lee papers that were extant in 2006.

Perhaps of greater concern to Lee management, the Post-Star appears to be shedding its print audience at an increasing rate compared to the rest of the field. Between 2008 and 2010 the Post Star ranked tenth worst in Lee circulation losses; between 2009 and 2010—a year after winning the Pulitzer Prize for editorial writing—the Post-Star moved to fourth place among Lee’s biggest losers.

While no two newspapers are alike, and the regional forces influencing circulation figures vary from year to year, finding yourself routinely on the list of under-performers (and sinking) in a corporate portfolio is not good. Particularly when the corporation is under tremendous pressure from creditors to increase its liquidity.

All the grim statistics might yet point up an opportunity—both for the Post-Star and its sister newspaper the (even worse-performing) Auburn [NY] Citizen. Should the time come when Lee is forced to divest its geographical or financial outliers, perhaps a local (or at least regional) interest will step forward to buy the undervalued properties. Should that happen the Post-Star will be able to stake a valid claim (for the first time in four decades) of being a genuinely local newspaper.

Failing Circulation Forces Newspaper Awards to Break the Rules

Tenth in a series by regular contributor Mark Wilson

(©2011 Mark Wilson)

Cascading newspaper circulation numbers are causing problems in more than advertising revenues, newspaper staffs, and corporate media stock prices. They now appear to have compromised the integrity of newspaper awards.

The New York State Associated Press Association (NYSAPA) announced its annual awards earlier this month for writers, editors, photographers and graphic artists working at daily publications across the state. A total of 240 awards (82 first, 80 second and 78 third prizes) in 27 categories went to numerous employees of 34 newspapers.

According to the official rules, entrants for the writing categories are divided into four separate circulation classes: Under 25,000; 25,000 to 50,000; 50,000 to 125,000; and over 125,000. At present, the Audit Bureau of Circulations lists only six newspapers in New York State with circulation between 25,000 and 50,000. While there is no indication of how many newspapers submitted entries to the competition, of these six papers, only three -- The Poughkeepsie Journal, The Observer-Dispatch of Utica, and The Post-Star of Glens Falls -- won any writing awards. Inexplicably, a fourth newspaper, The Watertown Daily Times, also won awards (three) in this class. The Audit Bureau of Circulations lists the daily circulation of the Watertown paper as 20,475—4,525 readers shy of the minimum standard for the judging class.

When asked to explain the discrepancy, contest organizer and AP New York Bureau Chief Howard Goldberg initially explained that because of shifts in newspaper audiences from print to online editions, the NYSAPA decided to use 2009 circulation figures for this year’s competition. Asked then why the Rochester Democrat and Chronicle won ten writing awards this year in the 50,000—125,000 class when its 2009 daily circulation was 130,506, Mr. Goldberg retreated. He clarified that for this year’s contest classes NYSAPA “mostly stuck with the print circulation numbers we had used for last year’s contest.”

This explanation raised a few questions:

*Did NYSAPA modify the circulation numbers for all participating papers?
If so, did they use the same formula for each paper?

*Why did the official rules fail to mention the change?

*How were the participating newspapers notified of the change in rules?

*And who authorized the change?

Mr. Goldberg declined the opportunity to answer these questions. Mr. Goldberg also did not share the number of submissions for each category within each class of the writing competition. Along with the four newspapers that divided 45 prizes for writing in the 25,000 to 50,000 circulation class, the over-125,000 circulation class distributed 39 writing prizes among four newspapers, and six papers with circulation between 50,000 and 125,000 shared 45 prizes. In the most competitive class, 18 newspapers with circulation under 25,000 shared 44 writing prizes in 15 categories.

The Associated Press determined its New York State awards prestigious enough to send out a wire story nationwide. Likewise, eight of the 14 newspapers whose employees were honored for writing in the three least competitive classes devoted newsprint to coverage of their own successes. None bothered to report the narrowness of the classes in which they competed.

At The Post-Star in Glens Falls, Editor Ken Tingley, who sits on NYSAPA’s Board of Directors, announced his paper’s new honors in a blog post that cited 33 awards. A story soon followed (attributed to “staff”) in his paper’s business pages under the headline, “Post-Star wins total of 33 state Associated Press awards.” As a matter of fact, the newspaper actually won 34 awards—none for fact-checking. In a sign of these hard economic times for the news publishing sector, four of the nine Post-Star staffers awarded first prize in the NYSAPA contest have left the paper since their honored work appeared in print.

As for NYSAPA’s apparent breaking of its own rules in an effort to beef up award classes and lend the contest some semblance of legitimacy, Howard Goldberg claims that contest reform will be on the agenda at the organization’s September board meeting. Perhaps his board might consider scrapping the self-indulgent exercise altogether. It has passed the point of resembling Prize Day at Low-Self-Esteem Summer Camp far more than a valid gauge of professional merit in a benighted industry.

Post-Star: Help Wanted (guest essay)

9th in a series on the troubles at The Post-Star and its parent Lee Enterprises

by Mark Wilson

Astronomy informs us that at the end of a star’s useful life, when it has burned through all its fuel, it expands into a loose assemblage of cosmic dust centered on a collapsing carbon and oxygen core. The outer shell eventually dissipates, leaving the ultra dense, sparkless core to mark a once-bright spot in the heavens. This post-star phase of stellar evolution is known as a “white dwarf” or “degenerate dwarf.”

In Glens Falls, the Post-Star is in transition. Dire financial crises at Lee Enterprise Inc—the Iowa corporation that owns the newspaper, along with about fifty other dailies across the country—have forced another round of staff cutbacks in all departments. Since Memorial Day, the Post-Star has lost nine of the 68 staffers (13.2%) listed on the “Contact Info” page at poststar.com. The loss of editorial staff includes Drew Kerr from the Saratoga Bureau, feature writer Jordan Reardon, veteran photographer and photo-illustrator TJ Hooker, and sportswriter Alex Matthews. In the past week the paper has also lost its online editor Jonathan Davenport (particularly painful as the news organization attempts the difficult transition to an internet-based model) and Washington County correspondent Lydia Wheeler, whose name has yet to be removed from the web page.

Characteristically, Post-Star Editor Ken Tingley wrote a vague blog post attempting to spin this bad news into something positive: a portent of a strengthening business climate in the newspaper publishing industry. His implication that the missing writers left for better jobs in the industry seems not to be true in all cases. When asked, Tingley declined to identify the recently-departed editorial staff; the transparency-crusading editor who publishes the names (and salaries) of public-sector employees as a service to the taxpayers who underwrite them proves himself unwilling to even confirm the employment status of his own byline journalists as a service to the subscribers, readers and advertisers who support them.

This summer’s staff cutbacks at the Post-Star mark the second major round of shrinkage for the newspaper (and the parent corporation) since the recession took hold in 2008. In December of that year an article in the Post-Star announced the firing of four of its full-time employees. The story stated that the cuts amounted to two per cent of the paper’s workforce, reducing the staff from 161 full- and part-time employees to 157. The following March, an article announcing the layoffs of eleven more employees cited a decrease in the paper’s payroll from 147 to 136 full- and part-time staff. Using their own numbers, in the three and a half months between those two news items ten more staffers disappeared, unreported. In total, the attrition in Post-Star staff between December 2008 and March 2009 amounted to 25 employees, or 15.5% of the original 161. By comparison, the Post-Star’s parent company reported a 12.2% decrease in total employees in the fiscal year ending September 2009.

Perhaps a better measure of the net loss of Post-Star talent (that accounts for staff increases as well as decreases) is a comparison of the staff “Contact Info” pages from poststar.com at various dates. The page from September 14, 2008 lists 84 employees. (Notably vacant on this list is the position of Publisher, which would not be filled by Rick Emanuel until October 20, about a month prior to the layoffs.) The same web page today lists 60 employees. Accounting for the previously mentioned departure of Lydia Wheeler, in less than three years the newspaper has suffered a net loss of nearly 30% of the staff it distinguishes with a listing on its own website.

While Editor Tingley, may try to put some positive spin on this grim statistic, the fact remains that the Post-Star continues to shine ever and evermore dimly.