Lee Enterprises Will Buy 16 Newspapers From Howard

Posted on February 15, 2002

Lee Enterprises, Incorporated, announced it has reached an agreement to acquire Howard Publications, a family-owned company of 16 daily newspapers. The transaction, valued at $694 million, will be paid for with $440 million in cash and new bank borrowing. Mary Junck, Lee Enterprises chief executive officer, said the purchase fulfills a strategy announced two years ago when Lee decided to sell its television stations in order to expand in newspapers.

"The Howard newspapers fit precisely with our core strategy of buying midsize newspapers in good markets," Ms. Junck said. "As we've said repeatedly, we believe that publishing newspapers in these size markets is a wonderful business, one that we have proven we know how to do well. Buying Howard will further strengthen our standing as the pre-eminent newspaper group serving midsize markets."

Howard newspapers have total daily circulation of 479,000 and include the North County Times in Oceanside and Escondido, California (89,000 daily circulation), The Times of northwest Indiana (88,000) and the Waterloo Courier in Iowa (44,000). Others include Wyoming's largest newspaper, the Star-Tribune in Casper; The Times-News in Twin Falls, Idaho, near the Sun Valley ski resort area, and The Post-Star in Glens Falls, N.Y. The purchase includes Howard's half-interest in the Sioux City Journal in Iowa. With the acquisition, Lee will own 38 daily newspapers and have a joint interest in six others, with total circulation of 1.1 million daily and 1.2 million Sunday in 18 states.

William E. Howard of Howard Publications said the family initially approached Lee. "When we decided it was time to sell our newspapers, we identified Lee as the best possible operator with the keenest understanding of the kind of community newspapering we do," he said. "I'm confident that Lee will make our newspapers more successful and provide more career opportunities for our employees."

Junck said Lee plans to add value and increase profitability at the Howard newspapers through more aggressive sales of advertising and newspapers, the launch of niche publications, and expansion of online services, such as classified advertising programs and special sections. She said cost savings include central purchasing of newsprint and reductions in corporate overhead. Underpinning all of those efforts, she added, are "our strong local news products that serve communities well."

"Lee has a talented management team with a great track record," Junck said. "We've proven in the past 18 months that we're among the best in our industry at driving advertising revenue and circulation sales, even in an adverse economic climate. We've gained a lot of experience in sales management and tactics, specifically tailored to midsize markets, and believe that through training, managing, benchmarking and incenting, we can drive more revenue and readers to Howard newspapers and their websites. At the same time, we're impressed with numerous innovative selling and sales management tactics Howard has successfully executed, and we're eager to move those to Lee."

She and William Howard said that because of similar cultures, operations and market sizes, they expect the transition to be quick and efficient with little disruption. With the addition of Howard's 2,400 employees, Lee will have about 7,200.