How much is that Projo in the window?December 28th, 2010 at 2:08 pm by Ted Nesi under On the Main Site
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.