Reports: Lee Enterprises cuts jobs across nation after hedge fund fight

Lee Enterprises Davenport
Lee Enterprises reported strong digital revenue growth in its second quarter fiscal results. CREDIT DAVE THOMPSON

Davenport-based newspaper publisher Lee Enterprises has cut numerous jobs at its newspapers across the country in recent weeks, according to several sources and reports.

According to a report at Axios.com, at least eight newspaper staffers – including several top editors – have been laid off in the past several weeks by Lee Enterprises, parent company of the Quad City Times and Dispatch/Argus.

On Monday, April 25, two longtime Quad-City Times staffers, Ed Tibbetts and Joe Engel, were laid off by the newspaper. Both posted on their personal Facebook pages afterward that their jobs were eliminated. 

“Lee Enterprises has been quietly laying off top editors and other staff across its local papers. The cost-cutting moves come after an unsolicited takeover bid from Alden Global Capital, a hedge fund known for consolidating local news for profit,” according to a report at Axios.com posted Tuesday, March 29.

When contacted by the QCBJ, both Mr. Tibbetts and Mr. Engel declined comment on the issue. However, on Facebook, they thanked their former co-workers for their support and help over the years.

Mr. Tibbetts most recently was the editorial page editor for the Times and Dispatch/Argus and worked for the Times for 32 years. Mr. Engel was the regional digital editor and worked at the Times for 38 years. Mr. Tibbetts’ name was removed from the newspaper’s editorial page staff box on Wednesday, April 27.

Officials with The Quad-City Times declined to comment on the layoffs. Lee Enterprises officials did not return the QCBJ’s calls requesting comment.

Lee Enterprises owns a total of 77 daily newspapers across the nation, including the Times and Dispatch/Argus as well as the Muscatine Journal in the Quad Cities region.

There were job cuts at other Lee-owned newspapers across the country, according to news reports. For instance, KBTX-TV in Bryan, Texas, reported on April 25 that the editor of The Eagle newspaper in Bryan was laid off several days ago. Darren Benson’s name was removed from the masthead of the newspaper as of the April 23 edition. The job cut comes as Lee properties are “undergoing a shift around the country,” according to a KBTX-TV report.

The apparent “shift” by Lee Enterprises comes after months of fighting off an unsolicited bid by Alden Global Capital to take over the company. 

Last November, Alden made that bid to take control of Lee for $24 per share in cash. After Lee rejected the offer, Alden tried to replace some members of the Lee Enterprises Board of Directors by nominating new directors. 

Lee rejected those Alden candidates, and the hedge fund filed a lawsuit against Lee in an attempt to get its candidates placed on the ballot. The lawsuit failed.

On March 10, at Lee’s annual meeting, shareholders overwhelmingly voted to re-elect the company’s three director nominees – Chairman Mary Junck, Lead Independent Director Herb Moloney and CEO Kevin Mowbray.

Also, Cannell Capital officials said in early April it wanted Lee Enterprises to speed up its transition to digital publishing. Cannell recently disclosed the purchase of nearly 20,000 more shares of Lee’s stock, giving it a 9.1% stake in the publishing company, according to several media reports, including the Washington Post.

Cannell Capital’s head, Carlo Cannell, said he thinks Lee needs new board members and executives with experience running a digital publishing business.

“I have some confidence in (Lee’s) management — not a lot,” Mr. Cannell told the Washington Post. “I have great or very little confidence in the board depending on which board member you are referring to.”

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