Mid- And Small-Market Newspaper Selling Briskly At Healthy Multiples, Broker Says

By: E&P Staff For all the well-publicized softness in big-city newspaper valuations -- from the purposely loss-making sale of the Minneapolis Star Tribune to the apathy that greeted Tribune Co.'s auction -- small and mid-sized newspapers "are selling at strong prices," a brokers report says.

The latest edition of the Cribb Greene Report by the Bozeman, Mont.-based mergers and acquisitions firm Cribb, Greene & Associates says the market for smaller newspapers is being buoyed by strategic buyers looking to fill in clusters, private equity investors, and traditional family-owned chains.

"Mid-sized daily newspapers (10,000 to 100,000 circulation) are still hotly pursued, as are large weekly clusters in growing areas," the report says. On the small-circulation side, strategic buyers are critical to valuations, and can move the property's price by 25% either way by their presence or absence in a sale, Cribb Greene says.

Mid-sized dailies are fetching prices of 10 to 14 times EBITDA (earnings before interest, taxes, depreciation, and amortization), or about 2 to 4 times publishing revenue. Dailies under 10,000 are going for 8 to 11 times EBITDA, according to the brokerage firm.

Larger weekly clusters with revenues in the millions generally sell for 7 to 10 times EBITDA, or 1 to 2 times revenue, Cribb Greene says. Small weekly clusters and stand-alone weeklies can sell in the 4 to 7 times EBITDA range, "although these properties can bring multiples much higher or lower depending on strategic value and market growth.

In their discussion of the overall newspaper market, Cribb Greene says specialty and niche publications typically fetch 4 to 8 times EBITDA.