12-31-17 | Printable Version

Year-End 2017

Year in review: Most transactions involving daily newspapers since 2000

The newspaper industry saw its busiest transaction year in nearly two decades with 31 separate deals involving daily newspapers in 2017.

The activity was defined in large part by a theme that continued from 2016 – the sale of independently owned properties and small family-owned groups that are increasingly finding it difficult to operate effectively in today’s advertising environment.

These owners lack the scale of larger group owners who can bring more to the party on both the revenue and expense side.

In addition, the industry’s focus on building regional publishing clusters means that more deals often are required when group owners decide to sell. In 2017, the sale of Civitas Media’s newspapers, which were scattered across several states, required nine separate transactions involving nine different buyers.

The sale of newspapers to non-strategic buyers is becoming the exception rather than the rule. In 2017, there were 23 transactions involving single daily newspapers or small clusters of dailies/weeklies. Of these, 16 were acquired by companies that owned adjacent or nearby operations.

Among the exceptions were the sale of two iconic big-city tabloids – the Chicago Sun-Times and the New York Daily News. The Sun-Times was bought by a local group and the New York Daily News was acquired by Tronc, which was looking for a foothold in another metro market.

Looking into 2018, we expect the deal flow to continue at a similar pace at least through the first half of the year. The number of dailies sold in 2018 is likely to be in line with recent years – within a range of 50 to 80 per year. Valuations should remain steady and consistent with those over the past 12 months.

By the Numbers

In total, 80 daily newspapers changed hands in 2017 in 31 transactions worth $347.97 million.

The number of transactions eclipsed the record-setting year of 2007 by one deal and was the highest since 2000, when 53 transactions involving dailies occurred. (2007 was record-setting in terms of dollar volume, with $20.04 billion in transaction value.)

The number of dailies involved in 2017 was the highest since 2012, when 84 changed hands. In that year, the sale of the Media General newspapers and Heartland Publications contributed to the large number. The dollar volume in 2017 was up from 2016’s total of $198.81 million.

Transaction announcements remained relatively steady throughout the year, with no major changes in the deal flow from the first half to the second half of the year, although the number of announcements slowed in the final quarter of 2017 (see related story).

Regional Clustering

Civitas Media, owned by private equity firm Versa Capital Management, was assembled through the restructuring of several newspaper companies post-2008, including Brown Publishing, Heartland Publications and Freedom Communications.