Lee offers optimistic outlook
Rapidly increasing digital growth is a key component in the optimistic outlook for Lee Enterprises, offered Wednesday by the Davenport-based company’s CEO.
Mary Junck, Lee’s chairman and chief executive officer, told stockholders and employees attending the company’s annual meeting the optimism is based on factors such as huge audiences for its products, strong digital growth and local news content, and an aggressive sales culture.
But Junck reminded shareholders the print newspaper product remains the main staple in the equation.
“Throughout the recession and now, our audiences are massive and strong across all age groups,” she said. “Although not growing in percentage terms, print remains the backbone of our business. It provides excellent results for advertisers and a preferred experience for a majority of readers.
“At the same time, digital alternatives for advertisers and readers have exploded. We have seized these digital opportunities and are rapidly growing revenue and audiences. We see big opportunities for online, mobile and tablets.”
Lee, the parent company of The Times Media Co., owns 49 daily newspapers and joint interest in four others, digital sites and 300 specialty publications in 23 states.
Junck cited a survey of Lee’s 12 largest markets where, on average, almost six of 10 adults read the printed newspaper over seven days. In some markets, that figure jumps to more than 80 percent. She said the year-to-year digital revenue increase last quarter was almost 38 percent, “propelled by our larger audiences, new product offerings and strong sales programs.”
She shared results of an independent research survey of 17,000 randomly selected individuals in those 12 markets.
“This past year, we added a follow-up question for the people who say they don’t read the newspaper and don’t access our digital products,” Junck said.
The question asked whether those “nonreaders” actually use the newspaper.
“Nearly half of those nonreaders said ‘yes,’” Junck said. “They use the newspaper on a regular basis. In other words, 34 percent of adults in our markets don’t consider themselves readers of the newspaper or users of our digital products. Even so, nearly half of them—amounting to over 15 percent of all adults in our market—somehow ‘use’ the newspaper at least once a week.”
And of those additional people, Junck said, the survey showed 70 percent use the newspaper to check advertising for sales in local stores and about half seek weather forecasts, comics or sports scores, or clip coupons. She said 40 percent scan ads to compare prices, and 30 percent or more check entertainment information or read a classified ad.
Junck highlighted demographics by age, saying 45 percent in the 18-to-29 age bracket read the newspaper. When digital use is added, she said, the company’s reach is 54 percent for that group.
She talked about the increased use of digital tools across the company.
“Last fall we rolled out sports mobile apps in 19 markets, providing continually updated, extensive coverage of more than 600 high school teams, 13 college teams and three professional teams,” she said.
During a question-and-answer session, Tim Stabosz, a stockholder from LaPorte, asked several questions of Junck but also observed that the numbers reported were encouraging.
Junck credited Lee’s sales culture for the strong numbers.
“The economy is improving a little bit,” Junck said, and retailers and businesses “are more amenable to our marketing pitches.”
Junck told Stabosz she is encouraged by growth in specific sectors. Employment ads and automotive were very good in the first quarter, and she expects that will continue.
Stabosz also asked what goals the company had set for online revenue.
Junck said digital accounts for 8 percent to 9 percent of revenue but the company has not set a specific goal. “We just want to grow revenue overall.”
Stabosz, a private investor, said he began buying Lee stock about two years ago and likes what he sees and hears.
“I came here because I want to meet the management,” he said. “I believe Lee is the best-managed publicly traded newspaper company in the country.”
He said he is impressed with the growth in advertising revenue in the first quarter, which he said is “dramatically better” than the competition.
Lee stock closed at $2.86 a share, down 11 cents, in trading Wednesday on the New York Stock Exchange.