By: Mark Fitzgerald
The market for newspapers has nearly dried up, but the value of newspaper properties remains surprisingly strong, brokers say.
“Much of what is coming to market are for the most part distressed properties, and, as a result, multiples look bad. But the value of papers has not really fallen off the way the numbers would indicate,” Owen Van Essen, president of Santa Fe, N.M.-based Dirks, Van Essen & Murray, said during last week’s Inland Press Association annual meeting.
In the current sales climate, publishers with good properties — monopoly papers in growth markets offering strategic clustering opportunities to at least one buyer — are holding them off the market, Van Essen said.
John T. Cribb, principal broker of Bozeman, Mont.-based Cribb & Associates, said good properties can still fetch prices of as much as 13 times their cash flow — if buyers exist. “The deals that are going through go at decent prices. The difference is there are so many [potential] buyers saying, ‘We’re just not buying anything,'” Cribb said.
The collapse of newspaper sales has been remarkably swift and steep. Van Essen’s firm estimates this year will close out with transactions totaling $400 million — barely 3% of the $14.2 billion generated when 100-plus dailies changed hands last year.