The Star Finally Implodes

The Arizona Daily Star has lost over 50% of its value in the two years since Lee enterprise purchased it.

If you think the morning Arizona Daily Star is worth less these days than it used to be, you’re not alone - so do the people who publish it. Lee Enterprises last week said it is reducing by $90.4 million the value of its Tucson operations.

The Tucson markdown was part of $722 million Lee took as non-cash impairments to its financial statements for the first three months of this year. The company announced the charges in a filing May 14 with the Securities and Exchange Commission (SEC).

Comments

[BobH]

I've stated before that the most likely outcome of the Tucson newspaper situation is for Gannett to buy the Star, merge it with the Citizen, and then begin combining operations with the Republic.

Lee cutting the value of the Star by more than half certainly makes the prospect more attractive to Gannett (though certainly they have enough problems that buying another paper may not look like a good idea right now).

If we accept as a premise that Tucson is too small to support two papers, then their options, as I see it, are:

1) Buy the Star,
2) Shut down the Citizen,
3) Hope that Lee blinks first and does them a favor by shutting down the Star.

The JOA runs out pretty soon, I believe, and something is going to happen in the next year or so. I think the likelihood is in the order I listed them.

[Frank]

No, the JOA doesn't expire for another half decade.