By: Jennifer Saba The Web sites of the largest newspapers in the United States are valued to be worth $300 million to $450 million, according to a new report from Borrell Associates.
Borrell, along with BIA Financial, teased out the value of newspaper Web sites compared with other locally owned sites affiliated with radio and TV stations, for example.
"What emerged was another strong indication of the fundamental changes taking place in the media industry: local Web sites generate important value for their owners, especially for owners that have positioned their sites for growth in key high-demand advertising categories such as e-mail, streaming video and paid search," analysts for Borrell wrote.
The study looks at the median Web site valuation for newspapers, television, radio, and pure-plays. Analysts noted that the median value for newspaper Web sites is based on revenues ranging from $500,000 to roughly $30 million.
The estimated median value of newspaper Web sites is $3.5 million at 12.5 times cash flow. For TV Web sites, the median is $3 million at 15.8 times cash flow. Radio is $1.2 million at 19.3 times cash flow. And the value of pure-plays is at $2.4 million at 21.8 times cash flow.
Borrell warns newspapers that they may have some of the highest revenues but their valuations are "constrained" because growth rates have slowed. The reason: newspapers Web sites are relying on online ad categories like banners and listings that losing speed.
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