For the first time in more than a decade, the Capital Times Co. paid out less in stock dividends last year than it did the year before. Yet the company remains surprisingly profitable, despite the economic downtown and trends that have put the hurt on newspapers nationwide.
In 2008, according to records filed recently with the Dane County Probate Court, the Cap Times Co. paid $55.25 per share, down from $61.25 per share in 2007. The company has 120,000 shares, so overall payouts were $6,630,000 last year, compared to $7,350,000 in 2007.
The company's dividends, which until now have risen steadily every year since 1996 (and possibly much longer), are the best public indicator of the overall profitability of Capital Newspapers, which owns and publishes The Capital Times, Wisconsin State Journal and other papers.
Capital Newspapers does not reveal how much profit it makes.
In the past, Cap Times Co. officials have said the dividends they pay out represent their full half share of the profits of Capital Newspapers. If this is still true, that would mean the operation as a whole made about $13.2 million in profit last year.
During this time, Capital Newspapers cut back on staff, curtailed benefits, ended publication of the Cap Times as a print daily, and abandoned even the pretense of competition between Madison's two dailies. (The bylines of Cap Times writers now appear regularly in the State Journal.)
The probate court filing placed the current market value of Cap Times Co. stock at $850 per share. That's down from $1,340 in 2004 but unchanged from 2007 (see Watchdog, 1/9/09). Meanwhile, the stock price of Lee Enterprises, the other half-owner of Capital Newspapers, has been in freefall, from $48 per share in 2004 (when it went into major debt to buy the Pulitzer chain) to about 40 cents per share today.
Apparently, Capital Newspapers is actually still doing quite well - just not as well as it once did. It's putting the screws to its workers because it wants to remain super-profitable, in part so it can funnel cash to Lee, which is in dire straits due to poor decisions by managers who continue to draw huge salaries.
But the pain is not being felt in every quarter. The William T. Evjue Charitable Trust continues to pay out a total of $180,000 a year to its trustees: John Lussier, Nancy Gage, Clayton Frink, Dave Zweifel and Brady Williamson. And all but Williamson get another $12,000 a year for being board members of the Evjue Foundation, which allocates the trust's revenues - which will be somewhat lower this year due to lower dividends. (Lussier and Gage also split about $1.7 million last year from Evjue's family trust.)
Maybe the State Journal will launch an editorial harassment campaign insisting that the trustees relinquish these payments for the greater good. Maybe not.