Newspaper Sales in 2016 Highest Since the Great Recession

The newspaper deal market set new post-recession highs in dollar volume and the number of transactions involving daily newspapers in 2015, according to newspaper merger-and-acquisition firm Dirks, Van Essen & Murray.

Driven by small-market transactions and a handful of significant group deals, the value of announced newspaper sales surpassed $800 million for the first time since 2008, the firm said.

The largest deals of the year include Gannett's agreement to buy Journal Media Group for $280 million (expected to close in 2016), the sale of the Las Vegas (Nev.) Review-Journal, the earlier sale of Stephens Media (which included the Review-Journal) and the acquisition of U-T San Diego by Tribune Publishing.

A number of regional daily numbers changed hands as well, such as the Fredericksburg (Va.) Free Lance-Star, the Erie (Pa.) Times-News and the Portland (Main) Press Herald.

Nearly all of the buyers were existing newspaper owners, and public companies made their presence felt in a major way in the marketplace, said Phil Murray, executive vice president of Dirks, Van Essen & Murray.

"Valuations strengthened somewhat in the second half of 2015," Murray said. "Looking forward we think those valuations will hold through this year."

In total, 70 daily newspapers were involved in announced transactions during 2015 in 27 deals worth $826.96 million, DV&M said.

The dollar volume eclipsed the previous post-recession high of $788.75 million set in 2011, which was driven largely by the sales of the Omaha World Herald Co., Journal Register Co. and the New York Times regional newspaper group.

The number of transactions in 2015 also squeaked past the post-recession mark set in 2012 of 25 deals, a year that saw divestitures by Media General and Freedom Communications and a number of other lender-driven sales.

Early in the fourth quarter Gannett agreed to buy Journal Media Group, owner of 15 dailies, for $280 million. The announced purchase price is equal to the amount paid by New Media Investment Group for Halifax Media Group at year-end 2014. These represent the two largest transactions by dollar volume since 2008.

New Media, meanwhile, remained busy in 2015 as well, buying or agreeing to buy 11 daily newspapers. Early in the year, it paid $102.5 million for Stephens Media, whose eight daily newspapers included the Las Vegas Review-Journal. At year-end, New Media sold just the Las Vegas daily for $140 million to local interests.

Among other public companies, BH Media Group (a unit of Berkshire Hathaway) acquired two dailies and Tribune Publishing bought U-T San Diego.

Over the past five years, annual newspaper transaction volume has been in a fairly tight range between $642 million and $826 million, Murray said. He does not expect any major deviation from that range in 2015.

For more information, contact Dirks, Van Essen & Murray at 505-820-2700.