Item 1. Business
ITEM 1. BUSINESS
Lee Enterprises, Incorporated is a leading digital-first subscription business dedicated to delivering high-quality, trusted, and intensely local news, information, advertising, and marketing services. We serve 73 mid-sized communities across 26 states, engaging over 771,000 digital subscribers through our rapidly growing digital platform. Our mission is to enrich communities by providing engaging local content, enhancing subscriber experiences, and empowering more than 25,000 local advertisers with a comprehensive suite of omni-channel advertising and marketing solutions.
Our diverse portfolio includes digital subscription platforms, daily, weekly, and monthly newspapers, and niche products, all tailored to deliver original local content alongside national and international news. These products are accessible in both digital and print formats, with real-time updates available through our websites and mobile apps.
Operating predominantly in mid-sized communities, our offerings range from prominent daily newspapers and their digital counterparts—such as the St. Louis Post-Dispatch and The Buffalo News —to non-daily newspapers and digital platforms serving smaller towns. By combining deep local insights with innovative digital solutions, Lee Enterprises is transforming the way communities stay informed and connected.
Technology, media, and consumer behavior are experiencing a seismic shift driven by the rise of generative AI. This groundbreaking innovation is transforming how information is created, shared, and consumed, offering an unprecedented opportunity for media companies to adapt, innovate, and solidify their role as trusted providers of news and information.
As a local news organization operating across 26 states, Lee is uniquely positioned to succeed in this evolving landscape. Our communities depend on us not only for unbiased reporting but also as the vital connection that brings together neighbors, leaders, and businesses. Leveraging the transformative potential of generative AI, we are enhancing our commitment to truth, transparency, and service—ensuring we remain a cornerstone of the communities we serve in this dynamic new era.
While monetization opportunities of our content and data continue to grow, we generate revenue today primarily through advertising and marketing services, subscriptions to our digital and print products, and digital services, primarily through our majority-owned subsidiary, BLOX Digital, our software as a service content platform.
Advertising and Marketing Services Lee provides comprehensive advertising and marketing services tailored to local, regional, and national businesses. Our advertising revenue streams are categorized as follows:
• Digital Advertising : Display and targeted advertising on our owned and operated digital platforms.
• Digital Marketing Services : Offered through Amplified , our suite includes targeted display, video, OTT (over-the-top), hyper targeted AI advertising, custom content, web development, social media management, search engine marketing, events, email campaigns, and other advanced marketing strategies.
• Print Advertising : Display advertising featured in our daily and non-daily print publications.
• Preprinted Inserts : Advertising distributed within our daily and non-daily print products.
Digital advertising and marketing services remain a cornerstone of our strategic priorities for 2025. Our advertising teams utilize an omni-channel sales approach, integrating the reach of our owned and operated platforms with the capabilities of Amplified . This approach enables us to provide a full suite of digital marketing solutions.
Leveraging a nationally scaled sales force, proprietary ad technology, and robust analytics, we deliver data-driven, customized advertising solutions. Using AI-powered media planning, we craft targeted, integrated campaigns to help advertisers connect with their intended audiences effectively.
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Subscription Business
Lee offers a range of subscription options, including digital-only subscriptions, full-access subscriptions, and single-copy sales.
• Digital-Only Subscriptions : This rapidly growing segment offers access to our content exclusively through digital platforms. Expanding our digital-only subscriber base and revenue remains a top strategic priority for 2025.
• Full-Access Subscriptions : Provide comprehensive access to our content across multiple platforms, including print editions (delivered or available for pickup), websites, smartphone and tablet apps, and e-editions. Pricing varies significantly by market and delivery frequency. Like broader industry trends, print subscription volumes declined in 2024.
To drive digital-only subscription growth, we employ several key strategies:
• Investing in relevant, trusted, and hyper-local news and information that deeply connects with our communities.
• Launching brand marketing campaigns to highlight the value and appeal of our content.
• Continuously enhancing the subscriber experience to improve engagement and satisfaction.
• Converting organic website traffic into subscribers through on-platform promotions, paywalls, and dynamic metering systems.
We also implement a variety of pricing strategies, such as discounted introductory offers, to encourage trial usage and build habituation before transitioning subscribers to standard rates.
This multi-faceted approach ensures we remain a trusted source of information while capitalizing on the opportunities of the digital-first era.
We generate revenue primarily through advertising and marketing services, subscriptions to our digital and print products, and digital services, primarily through our majority-owned subsidiary, BLOX Digital.
Digital advertising and marketing services remain a key strategic priority for us in 2025. Our advertising teams deploy an omni-channel sales approach that leverages our owned and operated products with Amplified to offer a full suite of digital advertising and marketing services. Through our nationally scaled sales force, proprietary ad tech, and sophisticated reporting and analytics, we believe we are well positioned to solve advertising solutions for our advertisers. Through our AI-driven media planning process, we present our advertisers with targeted, integrated solutions that help them reach their intended audiences.
Advertising and marketing services revenues are subject to moderate seasonality primarily due to fluctuations in advertising volumes tied to holidays and seasonal advertising in our first fiscal quarter.
Digital Services Revenue – In 2024, almost all of our digital services revenue is from BLOX Digital. BLOX Digital, operated through our 82.5% owned subsidiary INN Partners, L.C., is one of the largest web-hosting and content management SaaS providers in North America and offers modern integrated digital publishing and content management solutions for creating, distributing, and monetizing multimedia content.
• BLOX Digital services more than 2,000 daily customers, including media publications, universities, television stations and niche publishers, including Lee.
• Including intercompany revenue generated from our markets, revenue at BLOX Digital grew 10.4% in 2024 and totaled $38.6 million.
• We made significant investments in BLOX Digital in 2024 including enhancing its product capabilities that include an AI driven digital platform that offers a personalized mobile news app, a smart paywall, and an AI assistant tool.
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Other Revenue - Excluding digital services revenue, other revenue is comprised mainly of commercial printing and delivery of third-party products.
We compete with other media and digital companies for advertising and marketing spend. Our print and digital products competed with other forms of media including national media providers and amateur content creators, as well as other news and information outlets for subscription spend. The market for local digital marketing solutions is highly competitive and evolving allowing opportunities for new competitors to enter the market.
Amplified competes with other digital marketing solutions agencies as well as other media companies which have a similar strategy for digital marketing solutions. While some of our competitors enjoy competitive advantages such as greater name recognition, longer histories as well as greater financial resources, we believe we compete favorably and our product capabilities meet customer requirements due to our data-driven, omni-channel sales approach, our experienced digital sales force, and our overall customer satisfaction.
The number of competitors in any given market varies; however all of the forms of competition noted above exist to some degree in all of our markets.
STRATEGIC INITIATIVES
Our strategy emphasizes technology leadership through partnerships, products, and operational excellence. There are three pillars to our strategy:
1. Expand Our Audience with Compelling Local Content
Lee is committed to maintaining its leadership position as a trusted provider of local news and information by delivering best-in-class digital experiences. We focus on enhancing consumer engagement and growing audiences by offering relevant, useful, and engaging content through a multi-media approach that leverages AI and includes video, audio, and written content.
In 2025, we plan to make targeted investments to improve the user experience of our digital products, particularly on mobile platforms, and aim to personalize news and content that amplifies and extends our audiences. By recruiting top talent and leveraging data to enhance subscriber retention, we aim to provide our local consumers with trusted, high-quality content that drives digital audience growth and subscription conversions.
Our proprietary local content, presented on best-in-class multimedia platforms and augmented by new and engaging video channels, is designed to not only grow audiences but also increase monetization opportunities.
2. Accelerate Digital Subscription Growth
As the fastest-growing local media digital subscription business, Media Company continues to achieve significant growth in digital-only subscribers. In 2024, digital-only subscriptions increased by 7%, reaching over 771,000 subscribers and offsetting declines in traditional full-access subscriptions. More than 53% of our full-access subscribers have also activated their digital access.
Our strategy includes leveraging data and analytics to target our extensive addressable market of 26 million unique visitors, converting them into digital subscribers. With these efforts, we aim to achieve substantial growth in digital-only subscribers, targeting over 1.2 million by 2028.
This digital transformation is not only a strategic imperative but also an environmentally sustainable one. By shifting to digital platforms, we reduce energy consumption at production hubs, newsprint usage, and the environmental impact of fossil-fuel-driven distribution channels.
3. Diversify and Expand Offerings for Local Advertisers
Our advertising and marketing solutions provide a robust platform for local advertisers to achieve scale both within and beyond our markets.
• Amplified Digital Solutions : Through Amplified , our full-service digital agency, we create sophisticated campaigns on both our owned-and-operated sites and third-party platforms. These campaigns use auction-based ad buying and are tailored to meet the specific needs and scale of each advertiser.
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• Omni-Channel Sales Approach : Our highly skilled and digitally adept salesforce—the largest and most proficient in our markets—works closely with local businesses to provide tailored advertising solutions.
• Advanced Metrics and Collaboration : Collaborating with Google and other ad tech providers, we deliver advanced metrics and analytics to ensure campaign effectiveness and ROI.
NEWSPAPERS AND MARKETS
The Company, including our investments in TNI Partners ("TNI") in Tucson, AZ and Madison Newspapers, Inc. ("MNI") in Madison, WI, publish the following daily newspapers and maintain the following primary digital sites:
September 2024 (3)
2024 Monthly Average ('000s)
Newspaper Primary Website Location Digital & Print Subscribers (4)
Unique Visitors Page Views
St. Louis Post-Dispatch stltoday.com St. Louis, MO 87,358 2,642 21,952
Buffalo News buffalonews.com Buffalo, NY 78,433 1,679 22,154
Tulsa World tulsaworld.com Tulsa, OK 64,352 958 7,988
Omaha World Herald omaha.com Omaha, NE 62,498 1,356 16,391
Wisconsin State Journal (1) madison.com Madison, WI 58,758 1,294 13,255
Richmond Times-Dispatch richmond.com Richmond, VA 46,896 970 10,530
Arizona Daily Star (2) azstarnet.com Tucson, AZ 42,980 1,179 2,977
The Times nwitimes.com Munster, Valparaiso, and Crown Point, IN 40,311 832 7,237
Billings Gazette billingsgazette.com Billings, MT 35,849 665 5,966
Lincoln Journal Star journalstar.com Lincoln, NE 34,977 885 8,164
The Press of Atlantic City pressofatlanticcity.com Atlantic City, NJ 22,684 649 5,016
Roanoke Times roanoke.com Roanoke, VA 21,917 471 4,744
Quad-City Times qctimes.com Davenport, IA 20,432 453 4,073
Winston Salem Journal journalnow.com Winston-Salem, NC 20,101 538 4,810
The Pantagraph pantagraph.com Bloomington, IL 18,768 415 4,705
Greensboro News-Record greensboro.com Greensboro, NC 18,563 433 3,259
Freelance-Star fredericksburg.com Fredericksburg, VA 16,860 244 2,962
Missoulian missoulian.com Missoula, MT 15,615 303 3,723
The Bismarck Tribune bismarcktribune.com Bismarck, ND 12,021 315 4,422
Waco Tribune-Herald wacotrib.com Waco, TX 11,840 295 2,495
Other Daily Publications 347,178 8,496 69,434
Other Non-Daily Publications 26,598 1,035 2,841
Total 1,104,989 26,107
229,098
(1) Owned by MNI
(2) Owned by Star Publishing and published through TNI
(3) Source: Company statistics.
(4) Digital & Print Subscribers represents the subscriber volumes as of September 29, 2024.
NEWSPRINT
The raw material of newspapers, and our other print publications, is newsprint. We purchase newsprint from U.S. and Canadian producers. We believe we will continue to receive a supply of newsprint adequate for our needs and consider our relationships with newsprint producers to be good. Newsprint purchase prices can be volatile and fluctuate based upon factors that include foreign currency exchange rates, tariffs and both foreign and domestic production capacity and consumption. Price fluctuations can affect our results of operations. We have not entered into derivative contracts for newsprint.
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EMPLOYEES AND HUMAN CAPITAL RESOURCES
We believe the foundation of our business is the people and employees who support our business strategy. A major focus in 2024 was investing in top digital talent to carry out our Three Pillar Digital Growth Strategy and position us to achieve our long-term growth targets.
At September 29, 2024, we had 3,047 employees, including 373 part-time employees, exclusive of TNI and MNI. Full-time equivalent employees in 2024 totaled approximately 2,897 of which 366 are represented by unions. We consider our relationships with our employees to be good. We are committed to creating an equitable and inclusive workplace that also reflects the diversity of our local readers and communities in which we serve.
We remain deeply committed to fostering diversity within our organization by continuously evaluating and enhancing our hiring practices, broadening our recruitment efforts, offering skill-building opportunities focused on diverse storytelling, and crafting business strategies that engage historically underserved communities. These initiatives position us to build a more representative workforce at every level, strengthening our company’s culture and driving long-term success.
CORPORATE GOVERNANCE AND PUBLIC INFORMATION
We have a long history of sound corporate governance practices. Currently, our Board of Directors has affirmatively determined that eight of its nine members are independent, including all members of the Board's Audit, Executive Compensation, and Nominating and Corporate Governance committees. The Audit and Risk Management Committee approves all services to be provided by our independent registered public accounting firm and its affiliates.
At www.lee.net, one may access a wide variety of information, including news releases, SEC filings, financial statistics, annual reports, investor presentations, governance documents, newspaper profiles and digital links. We make available via our website all filings made by the Company under the Securities Exchange Act of 1934 ("Exchange Act"), including Forms 10-K, 10-Q and 8-K, and related amendments, as soon as reasonably practicable after they are filed with, or furnished to, the SEC. All such filings are available free of charge. The content of any website referred to in this Annual Report on Form 10-K ("Annual Report") is not incorporated by reference unless expressly noted.
FORWARD-LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. This Annual Report contains information that may be deemed forward-looking that is based largely on our current expectations, and is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those anticipated. Among such risks, trends and other uncertainties, which in some instances are beyond our control, are:
• We may be required to indemnify the previous owners of the BH Media or Buffalo News for unknown legal and other matters that may arise;
• Our ability to manage declining print revenue;
• The impact and duration of adverse conditions in certain aspects of the economy affecting our business;
• Change in advertising and subscription demand;
• Changes in technology that impact our ability to deliver digital advertising;
• Potential changes in newsprint, other commodities and energy costs;
• Interest rates;
• Labor costs;
• Significant cyber-security breaches or failure of our information technology systems;
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• Our ability to maintain employee and customer relationships;
• Our ability to manage increased capital costs;
• Our ability to maintain our listing Nasdaq;
• Competition; and
• Other risks detailed from time to time in our publicly filed documents, including this Annual Report and particularly in "Risk Factors", Part I, Item 1A herein.
Any statements that are not statements of historical fact (including statements containing the words “may”, “will”, “would”, “could”, “believes”, “expects”, “anticipates”, “intends”, “plans”, “projects”, “considers” and similar expressions) generally should be considered forward-looking statements. They reflect our expectations, are not guarantees of performance and speak only as of the date the statement is made. Readers are cautioned not to place undue reliance on such forward-looking statements, which are made as of the date of this Annual Report. We do not undertake to publicly update or revise our forward-looking statements, except as required by law.
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