12-31-13 | Printable Version

Year-End 2013

Year in review: Market stays strong in 2013

The dollar volume of daily newspaper deals in 2013 eclipsed the prior year, as a number of buyers came into the market to take advantage of opportunities.

In a demonstration of the expanding interest in newspapers, the 23 transactions involving daily newspapers in 2013 saw 16 different buyers come to the plate. The only companies completing more than one transaction were Berkshire Hathaway’s BH Media, Boone Newspapers and Black Press.

Many of the buyers were family-owned newspaper companies with strong balance sheets. In addition, wealthy individuals acquired two of the biggest names in newspaper publishing – the Boston Globe and the Washington Post.

Looking forward into 2014, we expect the deal flow to remain similarly strong. Any improvement in print advertising trends in the coming year should have a positive impact on values and the number of deal getting completed.

By the Numbers
In total, 32 daily newspapers were sold last year in 23 transactions worth $681.08 million. The dollar volume was slightly ahead of 2012 ($642.83 million), although the number of deals and number of dailies changing hands were down somewhat.

BH Media was very active in the first part of the year. The Omaha-based company acquired mid-sized dailies in Roanoke, Virginia and Greensboro, North Carolina from Landmark Media Enterprises. Both papers fit well with the properties acquired in 2012 from Media General.

In addition, BH Media added the family-owned Tulsa (OK) World and The Press of Atlantic City (NJ) in separate deals.

In the highest-profile deals of the year, Boston Red Sox principal owner John Henry acquired the Boston Globe and Worcester (MA) Telegram & Gazette, while Jeff Bezos of Amazon fame bought the Washington Post. Both men, who have had extraordinarily successful business careers, said they had no specific plans for the papers, but saw excellent opportunities.

The core of the buyer group over the past three years, however, consists of longtime privately held newspaper companies. In 2013, these included Forum Communications, Ogden Newspapers, Boone Newspapers, Larry Perrotto’s Community Media Group and Shaw Media.

News Corp. sold the Dow Jones Local Media Group in the only deal of the year involving a sizeable newspaper group. The eight-daily group, with publications on both coasts, was acquired by a company managed by Fortress Investment Corp., which also controls newspaper publisher GateHouse Media.

After emerging from bankruptcy late in 2013, GateHouse said it plans to grow the company through additional newspaper acquisitions.

Outlook
Over the past three years, annual newspaper transaction volume has been in a fairly tight range between $642 million and $788 million. We expect similar levels in 2014.

Print advertising declines are moderating in some parts of the country, but performance remains very inconsistent month-to-month and varies by region. Credit markets appear to be loosening somewhat for newspaper deals, which has helped to drive some of the recent activity

In addition, buyers are encouraged by the general success of paid access circulation models, which have improved revenue trends in some markets.