You know that Lee bought the Indy. Do you know why?



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Now Gulledge was at the Indy office, shaking my hand again, my god-awful cup of coffee in the other. Uncle Lee, as some seasoned staffers used to call the company, had me back in his grasp.

The company known today as Lee Enterprises has been the dominant newspaper group in Montana for more than half a century, since a Wisconsin publisher purchased papers in Missoula, Billings, Helena and Butte from the Anaconda Copper Mining Company in 1959. Of the 49 daily newspapers that Lee owns around the country, five are in Montana—more than are owned by all other media companies in the state combined. The Iowa-headquartered company's outsized presence here brings the benefits of scale, University of Montana journalism historian Dennis Swibold notes, but it also means that when the company runs into trouble, news suffers statewide.

The last decade or so in particular has brought plenty of trouble. Lee's recent woes are well known to many Indy readers—this paper has covered them for years. The defining moment arrived in 2005, when Lee took on more than $1 billion in debt to purchase the Pulitzer chain of newspapers. It was a bad time for a newspaper company to enter into debt. The ground under the media industry was shifting, decimating advertising revenue. A recession followed, and by 2011 Lee sought bankruptcy protection to restructure its debt payments. Since then, Lee, like every media company, has been in a race to cut costs more quickly than its revenues are falling, while also using "substantially all available cash" to pay down debt, as Lee chairwoman Mary Junck said in an investor call last February.

The fallout has been considerable. Company disclosures with the U.S. Securities and Exchange Commission indicate that Lee's workforce has been cut in half since 2008. Corporate managers developed a reputation for being "pretty quick with the hook" on local publishers who didn't meet financial goals, Swibold says. Johnson, the former capital bureau chief, recalls staff at the Independent Record throwing their own Christmas parties after the company stopped sponsoring them. Veteran staffers stopped getting raises. Lee's Montana dailies now have their pages designed out of state.

Mike Gulledge, who splits his time between Billings and Missoula as publisher of the Gazette and Missoulian, negotiated the purchase of the Indy for Lee Enterprises. - PHOTO COURTESY LARRY MAYER
  • photo courtesy Larry Mayer
  • Mike Gulledge, who splits his time between Billings and Missoula as publisher of the Gazette and Missoulian, negotiated the purchase of the Indy for Lee Enterprises.

"After the purchase of the Pulitzer papers, it just seemed to be a downward spiral in terms of their finances," Johnson says. "That's when they didn't invest too much in the product."

Turmoil wrought by tight finances has been on prominent display at the Missoulian, which is now on its third editor and third publisher since 2015. As part of a Montana Human Rights Bureau case brought by former editor Sherry Devlin last year, the company disclosed that 55 Missoulian employees were either terminated or quit between September 2014 and November 2015. Earlier this year, company-wide cost reductions eliminated three more positions from the Missoulian newsroom, including 25-year veteran sports editor Bob Meseroll.

The trend continued in Lee's latest quarterly report. Total operating revenue dropped 7.2 percent, despite growth in the digital sector, where Lee is concentrating its efforts. In a press release, Kevin Mowbray, president and chief executive officer, said, "We remain highly focused on cost reductions" on the order of another 5 or 6 percent in 2017.

Gulledge is the only Lee publisher in Montana to have survived the last decade. Three former Lee employees who worked with Gulledge in recent years describe him as a savvy manager who runs a tight ship but rarely tries to shape editorial coverage.

"He's a very strategic thinker, creating plans and hitting benchmarks financially," says former Gazette marketing and niche publications director Allyn Hulteng, who left last year to start a marketing firm.

While still based in Billings, Gulledge assumed publisher duties over the Missoulian in March after Heintzelman departed (Heintzelman declined to discuss his exit with the Indy). The Missoulian story announcing the change noted Gulledge's tie to western Montana in the form of a home on Flathead Lake, which state property tax records appraise at $1.2 million. He will now supervise Gibson, who remains as Indy publisher. The pair will lead Lee's experiment in running an alt-weekly newspaper. Announcing the purchase to Indy staff, Gulledge made mention of Lee's 2004 purchase of the Casper Journal, a community weekly in Wyoming that was started as a competitor to the Lee-owned Casper Star-Tribune. Dale Bohren sold the Journal to the Star-Tribune and today is executive editor of both publications. He says the Journal continued to operate separately for several years as he searched for ways to "find a margin, of course."

Over time, Bohren says, it made sense to integrate his old weekly into the primary product. First, the Journal became a free paper distributed to residents who weren't Star-Tribune subscribers, and it retained original content, letters and editorials. In February of this year, 13 years after the sale, Bohren decided to scrap the original content. The Journal now consists of repackaged material that was previously published in the daily paper.

"Congratulations," Bohren told me when I called him. "You're in for a really good ride."

The Indy's journey may not follow the Journal's. Based on her experience running niche magazines for the Gazette, Hulteng says the company is likely to see the Indy's established style and audience as an asset. "From a business perspective, it would seem appealing to add that to the portfolio while maintaining distinct personalities," she says.

The quotation I noticed in Gulledge's office, about what makes a good newspaper, is still there. Last week, I asked a former coworker to send me a photo of it. It reads: "A good newspaper is not afraid to put its arms around its town and say it loves its community. Readers know; they always know. They know the difference between mindless boosterism and being the village scold. They are quick to detect indifference or scorn parading in the name of objectivity."

I tracked the line back to a 1996 column in industry magazine Editor & Publisher, a screed by North Carolina publisher Rolfe Neill about the newspaper industry's plummeting circulation numbers. The column is titled, "Newspapers Must Save Their Own Lives."

When I asked Gulledge on Tuesday about the quote, he told me he wasn't the one who'd hung it on the wall.

"I inherited it, but I didn't want to move it," he said. "I think it's spot-on. All we have is credibility."

What happens when this happens?

The Indy isn't the first independent weekly to fall under corporate ownership. Here's how it's played out elsewhere.

by Alex Sakariassen

When Nick Coltman broke the news to his staff at the Anchorage Press in 2006 that he'd sold the paper to the multi-state media corporation Wick Communications, the reception wasn't exactly warm. Coltman and his wife had helped cofound the free news weekly in 1992, and Coltman had served as publisher since 1996. Making the announcement was tough, Coltman says, because "you're messing with people's lives."

"Honestly, it kind of felt like I was betraying my family," he says now. "When you sell the company, as the patriarch of that family, it was hard. There were a lot of tears when I announced it. That was probably the hardest thing."


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