Lee Enterprises better at real estate than newspaper biz
September 24, 2015
Perhaps attempting to fill the space once occupied by the dwindling number of property sale ads in the classifieds, Lee Enterprises, publisher of the Arizona Daily Star, continues its new pursuit: real estate.
The Davenport, Iowa based company announced last month it sold the property it owned in Napa, California, the location of the publisher’s Napa Valley Register. Price of the land and building deal is estimated in the $5 million range.
“As we continue to transform our business through consolidation, outsourcing and other means, we have excess real estate assets in certain markets,” said Lee Chief Financial Officer and Treasurer Ron Mayo in a press release. “Monetizing those assets provides us with the capital to reduce debt and invest in our digital transformation as we move forward.”
Translation. Lee has some big debt payments on the horizon, the result of its bankruptcy refinancing, and while its been somewhat successful in trying to stay ahead of its current payment situation, once the larger outstanding debt comes due, it needs to hope that digital transformation is somehow a money cow that can help to erase the metaphorical red ink it accrued due to terrible expansion decisions the company made last decade.
The hub of that decision, Lee’s overextension in its purchase of Pulitzer, is part of the real estate dump. The old Pulitzer building, home of Lee’s St. Louis Post Dispatch, has been on the market for a few months. Lee is also trying to sell property in Provo, Utah, Bloomington, Illinois and Portage, Wisconsin. All told, including the Napa land, Lee estimates a value of $10 million.
At this rate, perhaps it might consider reaching out to Parker Brothers/Hasbro to share rights for the Lee Enterprises version of the Monopoly board game.
The real estate announcement came on the heels of a less-than encouraging quarterly earnings report. Lee’s stock price has suffered as a result. It plummeted from the $3 range to a low of $1.36. It since rebounded a bit, and closed at $1.83 last Friday.