Lee Enterprises cuts retiree health benefits amid continuing revenue decline

December 17, 2009 by editor

While touting a slowing in the decline of its operating revenue, Lee Enterprises (owner of the Quad City Times) announced this week it was cutting health care benefits for many of its retirees.

The changes to its health coverage/benefits is expected to reduce the corporation's liability by up to $30 million, according to the company's annual report filed with the U.S. Security and Exchange Commission (SEC). The move triggered protests by union members outside the offices of Lee's St. Louis Post-Dispatch.

In its filing with the SEC, Lee said it was eliminating the medical coverage for some retirees and increasing the share other retired employees would be responsible for paying for health coverage.

The Newspaper Guild of St. Louis, the union representing news and advertising employees at the Post-Dispatch, said the change would result in the cancellation of health coverage for about 100 of its retired members along with an unspecified number of retired management employees.

Lee noted in its news release about the 10-K filing that its accountant did not include a warning in this year's audit opinion about the company's ability to continue as a going concern.

For its fiscal year ended Sept. 30, 2009, Lee's operating revenue was $842 million, a decline of 18 percent from the previous 12 months. Advertising revenue for the period declined more than 21 percent to $615 million.

The company lost $180 million in fiscal 2009, compared to a loss of $871 million in fiscal 2008.

Online page views for the newspaper chain increased nearly 8 percent from fiscal 2008, but online advertising revenue declined nearly 24 percent. Online advertising comprises 6.8 percent of Lee's total advertising revenues.

Daily and Sunday newspaper circulation also continued to decline. For the six months ended September 2009, daily circulation at its 49 daily newspapers was down 6.4 percent while Sunday circulation declined 5.8 percent.

At the Quad City Times, daily circulation currently is 50,373 while its Sunday circulation now stands at 65,415.