To sell or not to sell,

By: Joe Strupp that is the question
hasty decisions are not advised

Newspaper owners who are thinking about selling their publications too often overlook the need for competent legal and financial advice, and sometimes jump too quickly into the newspaper market when biding their time, or not selling at all, is really the best option. That was the advice from a panel of former weekly newspaper owners who discussed the pitfalls and pluses of newspaper ownership changes during a seminar at the National Newspaper Association's annual conference in Boston earlier this month.
The four-person panel, led by Moderator Michael Lindsey ? a former newspaper owner and head of Media Consultants Inc., a Cheyenne, Wyo., newspaper brokerage house ? said the first important choices are deciding whether to sell, and when. The panelists, who discussed the issues during the Oct. 1 event, agreed that publishers, especially those who have owned papers for a long time, should make sure a sale is what they truly want.
"I decided when it stopped being fun and when I started to worry that I could no longer do it," said Jay Jackson, who owned a weekly in Clinton, Ark., for 46 years before selling it two years ago. "I got tired of getting up in the morning and going to work."
Steve Haynes, a former owner of many newspapers from Colorado to Kansas, who has also worked for The Kansas City (Mo.) Star, said you should wait until you truly want to sell, when there is no hesitation. "You need to make sure it is what you really want to do," he said. "If you are not really committed, it can go badly."
Terry Licence, who has also bought and sold a number of newspapers, including an Estes Park, Colo., property that he recently sold to MediaNews Group mogul Dean Singleton, warned against selling too quickly, especially when financial problems arise.
"The worst reason to sell is because you are in a distressed situation, financial or otherwise," said Licence, who recalled a time when a fire damaged his newspaper, sparking thoughts of selling. "But you should wait for the best time, when you are doing well."
On the question of pricing your newspaper for sale, Lindsey said the value varies based on the local economy and the newspaper's financial health. But, he said a good rule of thumb is six times the annual cash flow, although he said prices can range from five to 20 times the cash flow for large daily newspapers.
"I've also advised a lot of owners not to sell and, instead, get someone they trust to run things and give themselves a little salary," Lindsey said. "If they are making good money, why stop?"
"Selling your paper is a very emotional thing and you can't get around that," said Licence. "It involves people, and whether you like it or not, it will affect those you work with, those who work for you, the community, and your family."
Jackson said one of the toughest things he faced was watching someone else operate his former publication and not to his liking. "He has irritated nearly everyone in town," he said. "But I have to live with it."
Haynes said patience is key during the sale because any small thing can come up. "You never know what is going to happen," he said. "It is always in danger of falling through."
The panelists also urged potential sellers to find the right accountant, lawyer, and broker and to give the planning process as much time as possible.
"Finding the right people made more money for us than we paid for them," Jackson said. "If you have never been through this before, you don't realize how many things can come up and how difficult they can be to take care of."
Potential buyers "want to know everything," Lindsey added.
The veteran buyers and sellers said the best planning move is to run your paper now as though you want to sell and, when you decide to sell, begin the search for a buyer as far in advance as possible ? even up to 10 years.
"I've seen too many people do it on the spur of the moment," Licence said. "You need to pay attention to the business."

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(copyright: Editor & Publisher October 9, 1999) [Caption]