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Daily Star parent to institute paywall plan

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Lee Enterprises

Daily Star parent to institute paywall plan

Lee Enterprises, the long-troubled parent company of the Arizona Daily Star and other daily newspapers, plans to charge readers to access the chain's websites, the company announced Wednesday.

Lee plans to introduce "digital subscriptions" within three months, and to build paywalls at most of the company's websites by the end of the year, CEO Mary Junck said at Lee's annual meeting.

It's not known if the Star will institute a paywall, or what it might cost. Company spokesman Dan Hayes said timing and pricing "will be determined market by market."

Lee rolled out paywalls at its six papers in Wyoming and Montana last year. Readers with a paid subscription to the print newspaper were charged about $20 per year to read stories online, while nonprint readers were charged $50-$75 per year.

The papers let readers access 15-20 stories before the paywall kicked in.

"We're excited about the opportunities we see for digital subscriptions," Junck told stockholders Wednesday.

Lee owns 48 newspapers around the country, with joint interest in four others, including the Star.

The company's partner in the Tucson paper, Gannett Inc., is the former publisher of the Tucson Citizen. While the press stopped rolling for that paper in 2009, Gannett and Lee remain partners in the South Park operation.

Gannett has also announced plans to build paywalls at its newspapers, which include the Arizona Republic and USA Today.

Lee's paywalls in Wyoming and Montana are based on the Press+ system, which users can easily circumvent by adjusting the JavaScript settings in their browsers. A similar paywall at the New York Times website is also easily stepped around.

Lee bankruptcy

A pre-packaged bankruptcy filing by Lee was approved by a federal judge in January.

Lee has been laboring under a $1 billion debt, much of which was to become due in April. The bankruptcy prepared by the chain pushed the due dates back to December 2015 and April 2017.

The company contended the Chapter 11 reorganization would give it time to right its finances.

The company reached terms with the majority of its debt holders last year, but had to go to court to force the terms on a minority of its lenders.

While the majority of Lee's debt holders agreed to push back the due date on the loans two years, about 3 percent of the company's lenders were non-consenting, Lee CFO Carl Schmidt said in a release at the time.

The company's interest in the Daily Star and the Madison, Wis., Capital Newspapers operation were not included in the bankruptcy. Both Tucson and Madison are partnerships with other newspaper companies.

Lee took on the huge debt load to finance the 2005 acquisition of the Pulitzer newspaper chain for $1.46 billion, which brought it the Star and the St. Louis Post-Dispatch, among others. Lee publishes nearly 50 daily newspapers across the country.

Part of Lee's debt, $138 million known as the Pulitzer Notes, was inherited with that purchase, and is secured by the assets of the former Pulitzer chain, including the Star.

Lee was faced with having its stock delisted from the New York Stock Exchange after trading below $1 for months. That threat has abated somewhat since the bankruptcy filing, as Lee has traded at slightly more than the dollar threshold.

Wednesday, Lee took a 5-cent bounce to $1.15, and jumped a penny in after-hours trading.

In 2004, Lee stock sold for $49.

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