Out of the frying pan?

Future is murky after Hagadone purchases Lee newspapers


Residents of the Flathead and Mission valleys are cautiously hopeful that the new owners of their weekly newspapers will repair the wreckage left in the wake of ownership by Lee Enterprises.

On July 1, the Idaho-based Hagadone Corporation, owner of Kalispell’s Daily InterLake, took over the Hungry Horse News in Columbia Falls, the Lake County Leader in Polson, the Clark Fork Valley Press in Plains, the Mineral County Independent in Superior, the Bigfork Eagle and the Whitefish Pilot. Also purchased from Lee were two free publications: The Advertiser, a Polson-based shopper, and the West Shore News in Lakeside.

Hagadone, founded by conservative publishing and resort magnate Duane B. Hagadone, has long owned many of the newspapers in the Idaho Panhandle, including the Coeur d’Alene Press. The company also owns papers in Wisconsin and Washington state and until recently held a half-interest in Iowa’s Sioux City Journal. Hagadone purchased the Western News in Libby in 1999.

Left in Lee’s wake are stunned community leaders, former employees, and others who say they feel used by the Iowa-based chain, which still owns daily newspapers in Missoula, Hamilton, Butte, Helena and Billings, as well as various specialty publications across Montana.

Lee’s detractors say the company’s lack of accountability and its passion for cutting local news, increasing advertising rates, slashing compensation for ad staffs, and replacing longtime employees with low-paid and unseasoned newcomers have left bad feelings all around.

Some say Hagadone’s new acquisitions could be successful proving grounds for regaining trust. Others, using the InterLake as an example, say they’re worried about the company’s reputation as a skinflint operation that shuns in-depth journalistic endeavors and puts the highest priority on pumping maximum cash into Hagadone coffers.

Tom Kurdy, who now serves as joint publisher of the InterLake as well as the newly acquired weeklies, declines to publicly express an opinion about Lee’s shakedown of the papers. Nonetheless, he promises things will get better as his company takes the hand of wary readers and advertisers.

“We are committed to maintaining the strong, independent newspapers in each one of these communities,” Kurdy says. “We look forward to helping these communities grow and growing with them. It’s a joint effort. We want people in these communities to understand that we’re here for the long term.”

Lee’s Flathead expansion started in 1997, when it bought the Bigfork Eagle. Two years later, the company purchased the Ravalli Republic in Hamilton, the Pilot, and the Pulitzer Prize-winning Hungry Horse News. In early 2000, Todd and Carmine Mowbray sold their weeklies in Polson, Plains, Superior and Lakeside to Lee. Also purchased by Lee was News Press, a regional printing plant in Ronan.

Employees who stayed with the papers suffered severe culture shock when Lee took over. “Everything was money-driven instead of people-driven,” says Joyce Shima, a longtime bookkeeper and manager at the Lake County Leader who worked for both Lee and the Mowbrays. “That was the biggest change. There was a big shift in what was important.”

Shima worked less than two years under Lee after the company bought the paper. She quit last year after becoming disillusioned with the changes.

“At a family operation, everybody knows your kids’ names and that sort of thing,” Shima explains. “A corporation is more bottom-line driven. That’s a really huge change for a small town. It’s a totally different perspective.”

“I don’t think [the Leader] was a great paper before, but with Lee it was a total disaster,” adds Jay Preston Jr., president of Ronan Telephone Co. and a longtime community booster. “It really went downhill when Lee took it over. It was pennywise and pound-foolish stuff.”

After purchasing the Bigfork paper, Lee officials in 1999 developed the Flathead Publishing Group, consisting of former Missoulian circulation manager Jim Rickman, financial coordinator Ron Kay and sales manager Twila McCartney. Rickman was named publisher of the group, which included all the newly acquired papers. Part of the group’s plan was to consolidate resources and use many of the same ads and news stories in all of the publications, despite the fact that each paper was based in communities separated by cultural, geographic and economic differences. While that same belt-tightening strategy is used every day at Lee’s other Montana papers, observers say the force-feeding failed miserably with the weeklies.

In the case of the Leader, coverage of local events and issues, especially in Ronan and other communities in the southern end of Lake County, took a deep plunge, observers say. In place of local stories and photos, recycled “content” from other reporters in the Lee chain and the wire services were routinely used to fill the space.

Wayne Fuchs, a former Mission Valley radio broadcaster who now serves as publicity and education coordinator at St. Luke’s Community Hospital in Ronan, says he became increasingly frustrated when hospital news didn’t get in the paper once Lee took over.

“I saw articles on a writing conference in Dillon and things going on in the Flathead Valley,” but fewer and fewer stories about people and issues in the Mission Valley, Fuchs says. He took those concerns to his superiors, and in the spring the hospital quit advertising with the Leader because of the paper’s diminishing commitment to the community.

“We felt that it was the only way to get their attention,” Fuchs says, adding that once he learned Hagadone was buying the papers he talked to Kurdy and the hospital started buying ads again.

While community leaders and others say they’re trying to remain optimistic, Hagadone’s recent buyout from Lee also triggered a new round of layoffs, the shutdown of the Ronan printing plant, which was not acquired by Hagadone, and continuing concerns that another corporate occupation is in the works.

But Kurdy notes that the company has already opened a new bureau office in Ronan to replace one that was closed earlier this summer. And he vows to keep the papers local and independent, although his specific strategies for improving them are still sketchy. “Our emphasis is on local news and community,” he says.

“Everybody has been instructed to turn out the best local product they can. We fully intend to pay very close attention to our news products and satisfy the needs of our readers.”

According to Kurdy, six full-time employees were not rehired when Hagadone bought the weeklies, although some have since been offered work in other capacities. Hagadone passed over the three Flathead Publishing Group leaders, but Kay and Rickman were given different jobs with Lee Enterprises. Rickman, who served as Lee’s lightning rod when the company owned the papers, did not reply to requests for comment.

Also losing their jobs in the Hagadone-Lee transfer were 25 part-time workers at News Press. Kurdy says some of those positions will be revived as new functions are added in Columbia Falls.

Ron Miller, who worked as a printer at the Hungry Horse News since 1978, was among those laid off when Hagadone decided to print all of the weeklies in Kalispell. Miller continues to do contracted piece work for Hagadone, but he doesn’t expect that to last for long. While he’s sorry to lose his full-time job, he feels the bigger issue is what happened to the paper after Lee took it over.

“The big loser is still this community,” he explains. “This paper represented something very positive for this community, and now that’s gone.”

Among the Flathead weeklies, the Hungry Horse News in particular once enjoyed a strong reputation for its editorial content. Founder Mel Ruder built it into a model publication, with a special emphasis on local personalities, photography and coverage of Glacier National Park. The paper gained national circulation as admiring readers passed subscriptions to family and friends. Ruder won a Pulitzer Prize—Montana’s first—for his coverage of the disastrous 1964 flood.

“[The paper] has always been a source of pride,” says Miller. “When you can work at a place with a great deal of pride, that’s worth a lot.”

Pride, however, is not often mentioned by former Lee employees while discussing what happened at the company’s Montana weeklies over the past few years.

“The lack of caring about any editorial content was amazing,” says Bill Simonsen, who worked for a decade as a reporter for the Bigfork Eagle before quitting two years ago. Other former employees interviewed for this story also say they were appalled at the high number of errors that were apparently deemed acceptable, the increased skimming over of many local events, and a barrage of complaints from readers about decreased coverage.

“We’re hopeful” about the future, says one current Hagadone employee who asked not to be identified. “But we’re dealing with a lot of variables that are unknown. You just can’t count on anything.” Allan Marcus worked as an ad salesman at the Leader for more than a year before quitting shortly after Hagadone took over. He says ad representatives at some of the papers had been making up to $60,000 a year before Lee bought the weeklies. With subsequent changes in the pay structure, it’s difficult for sales staff to make more than $30,000 annually, Marcus and other sources say.

“It’s just your normal, everyday corporate standing with employees,” Marcus says. “They’re just worried about the bottom line. Lee raised ad rates a bunch of times, and people didn’t like that. I had a hunch things weren’t going to work out [with Hagadone], so I got out.”

John Schnase, former publisher and part-owner of the Leader, stayed on with Lee for only six months before resigning.

“It was a difficult time for both advertisers and readers,” Schnase says. “The emphasis was different. The way customers were treated changed, too. What made it more difficult was trying to combine the north and south end of things [between the Mission and Flathead valley papers]. I think it diluted the product. My observation is that things are improving, and the communities need to give [Hagadone] a chance.”

Gordon Granley, owner of The Total Home store in Ronan, says he didn’t like the way he was treated after Lee bought the Leader. The paper, arguing that Granley’s ads were getting increased visibility because they also ran up north, raised his rates. At the same time, they brought in new potential competitors by running Flathead Valley ads in the local paper.

“I told them that you guys are doing what’s good for you and telling me it’s good for me, and it isn’t,” Granley says, adding that Lee sales staff tried to talk him into spending even more money on ads. In response to the paper refusing to take his concerns to heart, Granley says he trimmed his Leader advertising by two-thirds.

“It’s called being accountable,” he says. “They just don’t seem to be accountable for their actions. What is the greatest concern to me is that we no longer have an important core of who we are as a community. It’s simply becoming harder and harder to maintain that, and a newspaper is an important part of that.”

“They seem to be trying,” says Marcus of the new owners. “They seem like they’ll get more involved with the community. But it will take a year or two for people to believe that and actually see that. If someone started a new paper right now, I think [Hagadone] would be in trouble.” 

(Ron Selden, who writes from Helena, formerly worked as a reporter for the Lake County Leader and the Missoulian. Additional reporting was done by Missoula Independent Publisher Matt Gibson.)

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