Newspaper Purchase

Rapid City Journal: "Lee Enterprises, parent company of The Rapid City Journal, buys Pulitzer."  Excerpt:

The acquisition is comparable to the 2002 purchase of Howard Publications. At that time, Lee grew by 50 percent in revenue and 75 percent in circulation. The Pulitzer acquisition will increase Lee's size by 60 percent in revenue and 50 percent in circulation.

Lee will become the fourth largest U.S. newspaper publisher in terms of dailies owned and seventh largest in circulation, growing from 44 to 58 daily newspapers in 23 states, with new total circulation of 1.7 million daily and 2 million Sunday. Combining calendar 2004 results, Lee's revenue will rise by more than $440 million, to $1.14 billion.

What is absolutely stunning about the above link is how incredibly detailed the story is (oh for something similar about Gannett Corporation, the owner of the Argus Leader)(more here).  It has been a long time since I took securities law, but those are some serious numbers on Lee's part.  I didn't realize the company was that big of a player.  Anyway, in case you've missed our earlier discussions on this, Lee Enterprises owns the Rapid City Journal and the Sioux City Journal.  Perhaps a pincer move is in order--moving against the Argus Leader-dominated Sioux Falls market in between.  According to the Chicago economic theories I explain to my students, if a firm is reaping monopoly rents in a market another firm is supposed to enter the market to get a piece of the action.  Well, Lee, the Gannett-owned Argus makes close to 50% profit a year in Sioux Falls according to the latest numbers available.  Some readers are also not happy with the Argus (55% according to one survey/poll) and would presumably be interested in switching to a new newspaper.  Note to Lee Enterprises: prove the Chicago economic models correct for once!