I read your "letter to readers" in this morning's (2/20) Quad City Times and was surprised at how your newspaper management views its own economic situation.
Your "update on the financial health of our parent company (Lee Enterprises)" comes at least a year too late for most investors and readers. The lack of any substantive coverage of the newspaper chain's stock decline and economic peril over the past year has not been lost on us Quad City Times readers. We've had to rely on annual report, SEC filings and online articles by the Associated Press, Forbes and other business publications rather than any coverage of Lee in the Times.
While Deere and other local companies have been featured in your newspaper for poor stock performance and business declines, Lee's much steeper stock decline and turmoil has been ignored with only a small number of articles on "debt issues" reserved largely for the business section.
Your "financial update" today on Lee again was absent any specifics (facts) and long on unsubstantiated claims.
Among the comments was that Lee's new financial restructuring "removes uncertainty among some observers that Lee would not be able to handle its debt during this time of severe economic downturn. . ."
Those so-called "some observers" were your accounting firm's auditors writing in the company's 8K filings and most recent annual report.
You also wrote the corporation's financial restructuring "quashes ill-considered speculation that Lee's debt obligations could somehow impair the ability of the Quad City Times to continue serving readers and advertisers. Of course, that was never true."
Those employees laid off at the Times and other Lee newspapers over the past year probably would disagree, along with those employees left doing more with less because of staff cutbacks. Of course Lee's financial meltdown has hurt your daily product, and the other 49 daily Lee newspapers. One doesn't have to look much beyond the actual size of your daily newspaper and news hole to see that.
And, as to Lee's long-term survival, the jury is still out. The financial restructuring gives Lee more time to turn around the ship which has been seriously run aground. Several analysts had previously noted Lee's lines of credit would carry them through 2009, unlike some other newspaper chains that already have filed for bankruptcy.
But if the economy doesn't improve, and the declines in print advertising do not reverse in the next year, there is no assurance even the country's 4th largest newspaper chain will survive.
With my best regards,
Greg Gackle
