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2009 Newspaper M&A survey indicates buyers moving slowly from sidelines...optimism is rising
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According to the just released results of W.B. Grimes & Company's Annual M&A Survey, it's obvious publishers are taking an historically cautious approach to making acquisitions. Only 10% of publishers participating in the survey indicated they were ready to make a move (21% said there were more likely to be sellers). However, another 25% indicated as the economy and financing environment improves, they would be ready to consider acquisitions. 63% of the publishers responding indicated 2009's discretionary income would first go towards developing their existing business from within.
58% of respondents have their eye on debt. Lack of suitable bank financing and limited cash required for a down payment remain issues keeping them from making deals. It is interesting to note that only 36% of those responding indicated they were comfortable putting as much as 20% down on a transaction. That's obviously a big issue in a banking environment where 20%+ down payments are the norm.
What kind of publications are buyers seeking today? 62% indicated their most important consideration in making a deal is the strategic fit with their existing newspapers. Only 15% indicated a desire to move into new markets. Over 50% of those responding indicate they now require sellers to have a minimum of $500,000 in annual revenues. Not surprising, most buyers are requiring positive cash flow. As for target products, 89% said weekly newspapers. Interest in daily and shopper newspapers was 38%. 25% indicated an interest in looking at "alternative or city" weeklies where 13% of those respondents expressed an interest in parenting and 17% seniors publications.
It is important to note that 75% of respondents are owner/publishers. Of the 25% who work for a group, 42% indicated they have the blessing to consider acquisitions on a case by case basis yet only 3% indicated they were being encouraged to find acquisitions. 40% indicated their plate was full and there was no intention in considering acquisitions at this time.
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Newspapers and thinking the unthinkable
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Back in 1993, the Knight-Ridder newspaper chain began investigating
piracy of Dave Barry's popular column, which was published by the Miami
Herald and syndicated widely. In the course of tracking down the
sources of unlicensed distribution, they found many things, including
the copying of his column to alt.fan.dave_barry on usenet; a
2000-person strong mailing list also reading pirated versions; and a
teenager in the Midwest who was doing some of the copying himself,
because he loved Barry's work so much he wanted everybody to be able to
read it.
One of the people I was hanging around with online back then was
Gordy Thompson, who managed internet services at the New York Times. I
remember Thompson saying something to the effect of "When a 14 year old
kid can blow up your business in his spare time, not because he hates
you but because he loves you, then you got a problem." I think about
that conversation a lot these days.
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Community publications need to distance themselves from the newspaper crisis
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By John Peterson
Communitymediamatters.blogspot.com
There are newspapers and there are newspapers in crisis.
It's a them and us. The big guys and then the local and regional papers, be they weekly or daily, free or paid. I include shoppers and niche publications.
The big guys are in big trouble and we shouldn't be, because their problem is our opportunity (I say "we" and "our" because I can't get the publisher out of the consultant.).
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