By: Lucia Moses

Analyst: GOP White House Makes Prospect More Likely

They may have to wait a while, but newspaper stock prices could
“significantly” increase if cross-ownership rules are repealed
– a prospect that looks more likely now that the GOP has won
the White House, a Wall Street publishing analyst predicted.

A repeal of the Federal Communications Commission ban that
prevents a newspaper from owning a broadcast media outlet in the
same market could drive newspaper consolidation in the next year
or two, William B. Drewry of Credit Suisse First Boston wrote in
a Jan. 2 research note.

“There is huge shareholder value to be unleashed in the newspaper
stocks going forward, and the wild card to making that happen
will be newspaper company management and family owners that are
willing to sell to bigger companies over the next several years,
if and when true media rule deregulation occurs,” Drewry wrote.

Consolidation swept the industry last year, with a record $14
billion in U.S. dailies changing hands and four major companies
– Times Mirror Co., Central Newspapers Inc., Thomson Corp.,
and Hollinger International Inc. – selling either all of
themselves or most of their newspaper properties.

Companies that amass multiple media outlets in many local markets
could benefit by being able to offer advertisers cross-media
packages while saving on back-office functions and office space,
Drewry wrote. Overall, Credit Suisse First Boston has a “Buy”
rating on 12 newspaper companies it follows.

Lucia Moses (
is an associate editor covering business for E&P.

Copyright 2001, Editor & Publisher.

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