Lee: A Glimpse into the Slimfast Strategy
Lee Enterprises — with 49 daily newspapers, largely in small to middle-sized markets — provides a great picture into what’s going on at news companies today. We can call it a Slimfast Strategy, well depicted in its just-released annual presentation.
It cut its cash costs 18%, 2009 compared to 2008. It cut its 1Q 2010 costs by another 17.7% over 1Q, 2009. It plans to cut cash costs, in total, by 8% this year. Significantly, it cut debt by $198 million in 2009. All of those cuts followed a high-wire financial restructuring of the company a year ago. Lee’s Slimfast Strategy is one that you can see throughout the newspaper industry — a recognition, greatly reinforced by lenders, that reduced revenues are here to stay and that operating costs had to see draconian cuts. Now, those cuts have been made.
Lee CEO Mary Junck makes a good case that her companies’ newspapers have considerable print/online reach — as many as 85% of adults in some markets. That reach, of course, hasn’t yet paid over with great revenue growth. Now the position for Lee, and most of its brethren: get the newly skinny kid off the mat and back in the ring.