Lee Enterprises saved $10 million with layoffs, furloughs and pay cuts this quarter

Lee Enterprises, parent company of the St. Louis Post-Dispatch and The Southern Illinoisan, saved $10 million during the current quarter through layoffs, furloughs and pay cuts. The company also cut capital expenditures by more than 25 percent.

Due to the pandemic shutdown and lost economic activity, Lee is suffering severe advertising revenue decline this quarter. So we can expect more cutting in the chain.

During its quarterly earnings call for investors, Lee reported that it will “achieve $100 million in cost synergies” by the end of the 2021 fiscal year through the ongoing integration of the Berkshire Hathaway properties.

For instance, copy desk and design functions at former BH newspapers are being moved to Lee design hubs.

In some markets Lee will eliminate one to three days of the print product. The UMG has not heard about edition reductions at either the Post-Dispatch or Southern Illinoisan.

Lee will continue centralizing many functions that have typically been done in markets.

Lee used the CARES act to defer pension contributions and FICA payroll tax payments.

By consolidating printing operations and cutting staff, Lee has been able to put newspaper buildings up for sale and move operations into smaller quarters – as the Post-Dispatch did. Currently Lee has $30 million worth of real estate up for sale.

On the plus side:

Lee’s favorable 25-year refinancing deal with Berkshire Hathaway allowed it to maintain liquidity despite the pandemic shutdown.

Lee’s Digital subscriptions and ad revenues were up in the previous quarter. Digital subscriptions for legacy Lee newspapers climbed 91.7 percent over a one-year period.