How much is that Projo in the window?
December 28th, 2010 at 2:08 pm by Ted Nesi under On the Main Site
$51 million.
That’s how much one top media appraiser told me he thinks The Providence Journal would sell for in today’s depressed market for newspapers. Other experts said the number could be somewhat higher, but not by much, as I report in a new WPRI.com In-Depth article:
A buyer would probably be willing to pay between $42 million and $51 million for The Journal, Kevin Kamen of Kamen & Co. Group Services in Baldwin, N.Y., told WPRI.com. “It’s not worth a dime more than that,” he said. …
While it’s hard to say exactly how much of the $1.5 billion price tag for the Providence Journal Co. in 1997 represented the value of the actual newspaper, one-third of the total would put it at $500 million.
By that measure, Kamen’s current estimate of $51 million represents a 90 percent slump in value over 13 years. “It’s like winning the lottery and putting all the money in a pocket with a hole in it,” he said. “It’s really incredible how it has gone down in value.” …
Kamen’s estimate of a $42 million to $51 million purchase price for The Journal “sounds reasonable,” Rick Edmonds, media business analyst at the nonprofit Poynter Institute in Florida, wrote in an e-mail.
It’s unlikely A.H. Belo would be interested in selling The Journal at that price, Edmonds said. “Valuations like that keep all but the most motivated sellers” – like the Copleys in San Diego – “from actually going through with transactions. Better to hold on and see if they can rebuild the franchise over a few years.”
You can read the whole story here, and naturally I hope you do. Along with Kamen and Edmonds, I also got input from John Morton, the dean of newspaper industry analysts; “Newsonomics” guru Ken Doctor; and Reed Phillips, a big-time media i-banker in New York.
I’ve actually been working on this story since October, when Aaron Kushner came forward to announce he was planning an unsolicited bid for The Boston Globe. At the time I wondered whether a local buyer might try to purchase The Journal. After publishing that post, a few people asked me how much it would cost to buy the paper; I didn’t know, so I figured I’d try and find out.
Reporting out this story convinced me there is very, very little chance The Journal (or, indeed, most big daily newspapers) will be under new ownership anytime soon. That makes it all the more vital for their current managers to find a profitable path forward – because it’s almost unfathomable to imagine a healthy civic life without them, even if Clay Shirky says we need to be prepared for just that possibility.
Lastly, if you missed it last month, check out my post on why the Projo’s finances are healthier than most people think. I’d say that still holds, too; there’s a big difference between a company’s valuation in the eyes of buyers and sellers and its quarter-to-quarter fiscal position, although the slide in valuation reflects concerns about the latter over the long term.
Tags: a.h. belo, digital media, media, newspapers, projo, providence journal
Nesi's Notes covers politics and the economy in and around Rhode Island for WPRI.com. (Twitter: 
How much is YOUR TV STATION in the window?
And WPRI-TV would sell for how much tops?
That’s a good question, actually – I don’t know the answer off the top of my head, though we might get an idea of station valuations in this market if/when WLNE-TV gets sold.
We can also look to history, since WPRI has been sold twice in the years since Belo bought The Providence Journal Co.
In 1996, CBS sold WPRI to Clear Channel for $68 million. (The FCC required it in order for CBS to keep WBZ in Boston.) Then, in 2001, Clear Channel sold WPRI to Sunrise Television for $50 million. (Sunrise and LIN Media merged the following year.)
Of course, those prices came before WPRI launched Nesi’s Notes in July; the station’s value has obviously skyrocketed AAPL-style since then!
Jokes aside, TV stations’ valuations obviously haven’t taken nearly the hit that newspapers’ have because of the secular changes affecting the print industry. Cory Bergman discussed that over at Lost Remote recently:
http://www.lostremote.com/2010/12/20/local-tv-making-comeback-not-so-much-with-newspapers/
Thank you for your response.
It may interest you to know that your posts about The Providence Journal have prompted a popular, local blogger to research WPRI-TV with the help of qualified media experts. Perhaps the report, if and when it’s posted, will pinpoint the current worth of your station.
Nice. When’s it coming out? And why would s/he only look at WPRI and not the other two big stations as well?
Also, why all the anonymity? No name on your comment, no name attached to the “popular, local blogger.”
In answer to your first question: It will be posted if and when enough qualified research is gathered.
To your second, you would be part of the report — your findings on The ProJo, leading into “Now, what about WPRI?” Of the three “big stations” yours is the only one blogging about the financial health, etc, of The ProJo. Surely, you can see the angle?
Anonymity because we don’t want anybody intefering with our research — trying to “talk us out of it.” Make sense? Trust me, if it’s ever posted, you will be the first to know.
No, that doesn’t make sense – if you’re confident in your findings and unashamed of your efforts, you shouldn’t need to hide your identity to carry out your work.
Also, I’d add that the reason WPRI is the only one of the big stations blogging about the Projo is because it’s the only station with a blogger-reporter who writes about media, politics and business; heck, The Journal and WPRI are actually news partners.
I’d also point out that WRNI, The Phoenix, PBN and GoLocalProv all report on the paper, too – will you write about them?
Ted, of all the local media that reports on The ProJo, none of them write as often and as comprehensive as you. Surely you know that. Please take that as a compliment. You are going to be a big part of the report…blogger goes all out to dig into The ProJo; now what about the TV station he works for? Great angle.
Also, no offense to your 9:58 a.m. post, and I see your point, but we simply can’t take the chance that somebody will throw a monkey wrench into the works. Again, we wouldn’t dare post something unless we have reliable sources and qualified findings. Hey, you’re the one who got us started and you could be a star of the post — and your station could turn out to have glowing attributes. So relax and let it happen. Again, you’ll be the first to know, if it’s ever posted.
Oh boy – you’ve scared me a bit, though thanks for the compliment. I await your report (and your unmasking). All I ask is that it’s fair to my employer – WPRI is a great place to work and I’m very appreciative of my bosses’ support, so I’d hate to cause them any undue trouble by making the place a target.
[...] a reporter to succeed Eric Tucker. . . . Ted Nesi has the ProJo’s sale value topping out at $51 million. (Speculation about the paper being for sale have occasionally flared, but Belo hasn’t seem [...]
This comment thread is awesome. I can’t wait to see how it all turns out. Will there be a Lifetime movie?
Anyway, Ted, I think an interesting thing to look at is not so much the loss of valuation, but what exactly was wrong with the world when the Journal was bought for $500 million (and the Times bought the Globe for what, somewhere in the neighborhood of a $billion?). Why did anyone ever think these properties were worth so much? When did the valuations get so out of control? What was the valuation of the ProJo in 1990, 1985?
Great question. I took a stab at answering it in a separate post:
http://blogs.wpri.com/2010/12/30/why-buyers-paid-so-much-for-the-globe-and-the-projo/
I wonder what Lifetime’s valuation is?