Star shuffling reporters' beats
Word is trickling from the South Park Avenue plant of the Arizona Daily Star that some reporters are being shuffled about.
We've heard from reliable sources — including mentions on Twitter from some of the reporters themselves — that reporter Rob O'Dell is off the city beat, moving to computer-assisted reporting. Rhonda Bodfield will take his place at council meetings, while Becky Pallack will shift to Bodfield's old spot covering the county. Picking up the higher education beat from Pallack will be Carol Ann Alaimo. Tom Beal will cover the presidential race, while local politics (also Bodfield's former bailiwick) will be handled by a rotating team, we're told by a number of sources. No word on how Alaimo's former military beat will be handled.
"There were some beat shifts," confirmed Bobbie Jo Buel, the newspaper's editor. She referred us to the Star's assistant managing and metro editors for details; we're awaiting calls back for the official lineup cards.
In July, the Star axed 52 staffers, including about 15 from the newsroom.
The Star's parent company, national newspaper chain Lee Enterprises, was able to refinance a significant proportion of its crushing $1.1 billion debt last month.
The move, which came after Lee stock hit a 52-week low, may have headed off a threatened bankruptcy.
The newspaper chain convinced creditors to extend the due dates on about $864 million in loans to 2015 and 2017 by agreeing to pay interest rates of up to 15 percent.
The company had been facing an April 2012 deadline to repay the funds.
Still to be refinanced at the time of the deal was $175 million in debt, known as the Pulitzer Notes, also due in April 2012.
"(The deal) will allow us to refinance our bank debt on good terms and keep Lee on solid financial footing as we continue to expand our digital platforms, build audiences, drive revenue performance and improve our balance sheet," Lee CEO Mary Junck said in a press release.
But Lee's challenges are not over.
The company still will carry an enormous debt load, and is being forced to water down its stock. Its financial position has been more dependent on cutting employees than increasing revenues. And Lee still faces delisting from the stock exchange.
The chain, $1.1 billion in debt, has a market capitalization of just over $37 million, up nearly $7 million since the deal was announced in early September.
The company has been laying off hundreds of employees, including axing 52 at the Daily Star in July in what one affected employee called "a major bloodletting."
Because the stock has been valued under a dollar for an extended period, the New York Stock Exchange warned Lee in July that it faces delisting if the price does not increase.
Lee also publishes 40-some other newspapers, including the St. Louis Post-Dispatch, Quad-City Times and other Midwestern papers.
Profits from the Daily Star's South Park operation are shared between Lee and the former publisher of the Tucson Citizen, Gannett Inc. Gannett publishes, among others, USA Today and the Arizona Republic.
Lee has been widely thought to be on the verge of bankruptcy. The decline in newspaper circulation in recent years, and the company's crushing $1.1 billion debt from its purchase of the Pulitzer chain (which brought it the Star), have pushed Lee to cut costs.
In May, the company backed away from a plan to refinance the debt, which was to come due in April 2012, after investors failed to bite.
Lee stock has dropped by 70 percent in the last few months, and is now under a dollar.
In 2009, Lee was nearly delisted from the New York Stock Exchange because the stock sold for under a dollar for months. At one point it dropped as low as 28 cents.
If it continues to perform poorly through December, the stock may again face being removed from the trading desk, which would further shake investor confidence in Lee's ability to pay off its debts.
The company received a notice from NYSE on July 8 that it may be delisted if the stock does not climb above the $1 threshold.
In 2004, Lee stock sold for $49.