Small newspapers for sale at reduced prices
Posted by Simon Day on June 23, 2009 at 7:20 AM
While coping with the industry downturn better than their major daily counterparts, smaller newspapers are on the market at record low prices, according to Cribb, Greene & Associates, a brokerage that handles mergers and acquisitions for daily and weekly publications, MediaPost reported Friday.
These smaller newspapers can be found for sale at around four to eight times their earning level before income tax, depreciation and amortization (EBITDA), according to John Cribb, the brokerage's managing director. Just a few years prior the same titles were fetching 10-14 times their EBITDA.
These smaller newspapers can be found for sale at around four to eight times their earning level before income tax, depreciation and amortization (EBITDA), according to John Cribb, the brokerage's managing director. Just a few years prior the same titles were fetching 10-14 times their EBITDA.
The reductions are even more significant given that EBITDA is also down on the back of the general economic and industry declines.
Moreover, smaller community newspapers are a decidedly more attractive purchase than larger metropolitan dailies. Revenue losses at the smaller papers have been much less than at the major papers and local markets have continued to offer the niche newspapers advertising revenue.
Cribb said that although accurate statistics for smaller, often privately owned papers are harder to come by, it appears that ad revenue is down only 10%-15%.
"Certainly, these are ugly numbers compared to what newspapers are used to, but they are not disastrous. This is not the financial condition of an industry that is failing," he added.
Newspaper Association of America statistics show an industry wide, first quarter revenue decline of 28.3 percent for 2009, on top of a 16.6 percent decline for all of 2008. However, these figures fail to distinguish between large and smaller publications.
The comparative strength of the smaller newspapers has been put down to the value of unique local news and the local papers monopoly over such news. Larger national dailies are competing with free online sources for reporting on national and international news. Community papers are frequently the only source for local news and as a result have retained value in public perception.
Advertising revenue has also remained much more stable at the local publications through personal relationships fostered through the community and access to niche markets.
Among the major publishers, total publishing ad revenues falls were: 27% at The New York Times Co.; 34.1% at Gannett; 29.5% at McClatchy; 24% at Lee Enterprises; 28.6% at E.W. Scripps; and 28.2% at A.H. Belo.
Moreover, smaller community newspapers are a decidedly more attractive purchase than larger metropolitan dailies. Revenue losses at the smaller papers have been much less than at the major papers and local markets have continued to offer the niche newspapers advertising revenue.
Cribb said that although accurate statistics for smaller, often privately owned papers are harder to come by, it appears that ad revenue is down only 10%-15%.
"Certainly, these are ugly numbers compared to what newspapers are used to, but they are not disastrous. This is not the financial condition of an industry that is failing," he added.
Newspaper Association of America statistics show an industry wide, first quarter revenue decline of 28.3 percent for 2009, on top of a 16.6 percent decline for all of 2008. However, these figures fail to distinguish between large and smaller publications.
The comparative strength of the smaller newspapers has been put down to the value of unique local news and the local papers monopoly over such news. Larger national dailies are competing with free online sources for reporting on national and international news. Community papers are frequently the only source for local news and as a result have retained value in public perception.
Advertising revenue has also remained much more stable at the local publications through personal relationships fostered through the community and access to niche markets.
Among the major publishers, total publishing ad revenues falls were: 27% at The New York Times Co.; 34.1% at Gannett; 29.5% at McClatchy; 24% at Lee Enterprises; 28.6% at E.W. Scripps; and 28.2% at A.H. Belo.
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