Will this serve as a wake up call to Lee Enterprises, which owns the Wisconsin State Journal as well as half of Capital Newspapers?

This is of personal interest to me as a literally lifelong (from age 2, according to my parents) reader of the State Journal, despite its resolute refusal to hire me for going on 30 years. I suppose it’s personal interest to Craver too as schadenfreude for a competitor of his. (Although the State Journal is not exactly competition for reasons that will soon reveal themselves. But here’s one: The Capital Times, formerly a six-day-a-week newspaper, downsized to two issues per week, stuffed inside the State Journal and available at newsstands for free, to switch its competition from the State Journal to Isthmus, the weekly tabloid that has been around as a tabloid since the late 1970s.)

1. Lee Newspapers 0wns the State Journal. (Lee also owns the La Crosse Tribune and Kenosha News, along with the weekly Vernon County Broadcaster.)
2. The Capital Times Co. owns the Capital Times.
3. Lee and The Capital Times Co. each owns half of Capital Newspapers, which since 1948 (as Madison Newspapers, which apparently is Capital Newspapers’ corporate name) handles advertising for and printing of both newspapers. (Their newsrooms are separate, but their business operations are not.)
4. Capital Newspapers owns the Portage Daily Register, Baraboo News Republic, Reedsburg Times Press and Beaver Dam Daily Citizen, along with several weekly newspapers. (The latter daily is a former employer of mine.)

A former writer at the aforementioned Isthmus claims that Madison Newspapers owns not just the advertising and printing arms of the State Journal and Capital Times, but actually owns both newspapers. That might come as news to Lee, but someone with more knowledge of their corporate structure should explain all that.

I have run into State Journal employees from time to time, including when I was an employee of Journal Communications, publisher of the late great Marketplace Magazine. In fact, I met some members of the State Journal’s business news staff at a business journalism conference held in the Journal Communications building in downtown Milwaukee. They seemed to be nervous, and I think at least one of them who was there is no longer employed there, though I don’t know whether that person left by choice or not. (This was about the time that I started to realize that Journal Communications as an Employee Stock Option Plan company and Journal Communications as a publicly traded company were not the same company.)

Lee as a company apparently is not doing very well. What does Lee itself have to say about this? Just ask Lee:

Lee Enterprises Inc. (NYSE: LEE), a major provider of local news, information and advertising in 50 markets, reported today that for its fourth fiscal quarter ended September 29, 2013, digital revenue continued to increase, operating expenses continued to decrease and debt has been reduced to a level two years ahead of its reorganization plan.

Because of period accounting, year-over-year comparisons are distorted. The 2012 quarter and fiscal year included an additional week of business activity, which added both revenue and cash costs in comparison with the 2013 periods. Tables below summarize key 2013 and 2012 results on a comparable 13- and 52-week basis(1), respectively.

Also, the 2013 quarter includes a non-cash impairment charge of $1.94 per diluted common share. As a result, Lee reported a preliminary loss of $1.71 per diluted common share, compared with a loss of 6 cents in 2012. Excluding unusual matters, adjusted earnings per diluted common share totaled 25 cents for the 2013 quarter, compared with 7 cents a year ago.

(What’s an impairment charge? Read this.)

Since it is the People’s Republic of Madison, an obligatory slam on management’s compensation is required. To that, two points: (1) Management pay is a small fraction of overall payroll, unconscionable bonuses or not, and (2) I’ve always suggested that employees of publicly traded companies, which includes Lee, buy stock in their company so they can reap the benefits of whatever management does to increase profitability and stock price, and to give the employee a voice, even if a small one, as a shareholder.

Oh wait, here’s a third point: I suspect the State Journal salaries are where they are less because of Lee management salaries than because of the employment market. Madison is about as great a news city as exists in the Midwest, and therefore reporters would … well, insert your favorite violent metaphorical verb here … to work in Madison. If someone leaves the State Journal, easily 100 applicants would seek to replace him or her. One rule of business is that a business that wants to stay in business does not overpay its employees. Because there are so many journalists, anyone who leaves the State Journal — or the Capital Times, or one of the radio station groups, or one of the TV stations — are very easy, financially speaking, to replace.

Based on Facebook comments (and you know how accurate those are), the State Journal is doing well financially, enough to subsidize other Lee newspapers. The State Journal is not the newspaper I grew up reading, although you could say that about any newspaper since about 1980. There is more national and world news than you might think should be in a daily today, though that could be attributed to Madison being a supposedly more worldly community. (It also could be attributed to wire-service subscriptions costing less than reporters’ salaries.)

The State Journal has always had a great sports department. The State Journal also seems to cover Madison and Dane County well, though that might be a better statement posed to a Dane County resident. (Those three words will never again describe me.) The State Journal used to be Madison’s conservative newspaper in terms of opinions. “Less liberal” would be a better description now (though any newspaper looks like a John Birch Society newsletter compared to the communists who write C(r)apital Times opinions).

One irony of the Capital Times is that the family that started it has a large charitable foundation, the Evjue Foundation, which gives a lot of money to a lot of Madison and Wisconsin causes. The irony is that the newspaper whose profits created the foundation has spent its entire existence castigating business and wealth, and editorially espousing taking others’ wealth for their own idiotic pet lefty cause.

(Another is that the Capital Times started WIBA radio in Madison, which carries the three-hour show of the non-liberal Rush Limbaugh. Still another is this: Madison Newspapers employees went on strike in the 1970s. My high school journalism teacher, who I conclude was quite active in Madison Teachers Inc., refused to take his classes to Madison Newspapers — which one would think would be a place high school journalism students would like to see — because he refused to cross the union’s picket line, several years after the strike. The target of his ire was not, interestingly, the State Journal; it was the Capital Times.)

One irony of the State Journal is that one of Lee’s owners is Warren Buffett, who didn’t make his billions of dollars making stupid investment decisions. In fact, Buffett is also not known for making short-term investment decisions, which suggests against the theory that Buffett bought into Lee expecting Lee to be sold in whole or in part.

So because speculation costs nothing, Craver’s Facebook posters speculated on whether the Capital Times Co. would want to buy the State Journal from Lee. If it’s true that the State Journal is one of the most profitable — maybe the most profitable — Lee newspaper, then Lee’s not going to sell except for a high price. The State Journal’s future seems better than Lee’s, particularly if Lee keeps reporting eight-digit fiscal-year losses. If Lee hasn’t figured out how to make newspapers work in a digital world, well, Lee has a lot of company.

My prediction for years has been that what we now know separately as newspapers, radio and TV are going to merge into one, to where an information provider will provide the news in whatever form a reader wants it — as video, audio, print (as a PDF or something like it that the subscriber can read online or print), online, and whatever the next medium of information is. The value of the State Journal is that it has covered Madison and surroundings since 1839. How information is delivered will change; the need for that information won’t.

To demonstrate why I like hanging around with the news media, someone who works on Fish Hatchery Road posted:

Romenesko’s post made me realize that I need to start keeping a flask of alcohol in my desk. Although, as a friendly competitor pointed out, I may need to keep the booze safely away from any burning furniture.

That last point is because, of course, you can’t see the flame of burning alcohol. But you knew that.