Succumbing to market reality, publisher Lee Enterprises (NYSE: LEE) says it plans to report a major goodwill writedown in the current quarter. In a just-released statement (after the market close on a Friday) the company said that it will take a non-cash impairment charge of between $500-$700 million in the coming quarter, which will lead to a loss for all of 2008. Earlier this week, we noted that Lee was the one newspaper company not to have taken such a writedown, despite the fact that it paid $1.4 billion for Pulitzer—well above its current market cap—just over thee years ago. A little more perspective: even at the low end, the writedown will be at least as big as the company’s total market cap. In the statement, the company said it believes its current stock price is too low, but that the yawning gap between its market cap and the equity on its books compelled it to make the move. The company reminds that this is a non-cash charge, and indeed it is more of a lagging indicator than anything else—the only surprise is that it took so long. According to the company’s latest 10-Q, it has about $1.5 billion in goodwill, so this may not be the last writedown. Release.