Lee Enterprises is taking an axe to the expense side of its balance sheet, and some of those whacks will affect employees at the Journal Times.
Lee announced late last week the imposition of a company-wide pay freeze and the elimination of all matching company contributions to 401(k) retirement plans. It also "allowed" individual publishers at the company's 50-some dailies to order unpaid furloughs for all employees.
Well, we've had no "official" word from the JT -- not that we ever do -- but the word from the troops is that Publisher Rick Parrish has followed his counterparts at other Lee papers, like the flagship St. Louis Post-Dispatch -- whose $1.4 billion purchase in 2005 brought about this mess -- and ordered the week-long furloughs, to be taken by spring.
Nor is the pain limited to Lee's working stiffs: reporters, pressmen, ad sales reps and the like. Lee's top execs also are suffering... although everything is relative, right? Mary Junck, Lee's President and CEO, saw her pay cut from the $3.7 million she received in 2007 to last year's $2.5 million. Ouch! Her base pay of $850,000 is frozen, along with everyone else's, but that unpaid week off will cost her $16,346 -- enough to fund a young reporter's job for almost a year.
The unkindest cut of all was noted in the company's proxy report for its upcoming annual meeting. ""The Company's CEO informed us she would not accept any bonus for 2008." (What sycophant would even suggest one, given the company's dire straits -- other than those doofuses on Wall Street?)
In any case, the big news expected to come from Lee's March 10 annual meeting is the size of the reverse stock split: Lee is mulling turning five shares of its stock into one share, or maybe ten shares into one, thus raising the market price of each share from its current low of 30-odd cents per share to something over a buck. A five-to-one split would raise the price to about $1.50; ten-to-one would bring a $3 price.
That would satisfy one of the New York Stock Exchange's two listing requirements, but not the second: that a company have a market capitalization over $25 million. The NYSE lowered that cap requirement to $15 million -- but just until April 22. Lee hit 34 cents per share this morning, which brought its market cap to $15.33 million, but whether it will stay there is a question. There's nothing on the horizon -- you can just cut expenses so much, after all -- that would bring the cap back up to $25 million.
Meanwhile, there are other fish to fry: debt covenants. The company has only until Feb. 6 to renegotiate a reprieve on this year's portion of a $306 million debt payment.