Friday, October 08, 2010

Broker says weekly newspaper prices rising; another is not quite so optimistic

A newspaper brokerage firm tells Editor & Publisher that "For the first time in three years, the valuations for weekly newspapers are beginning to rise," Mark Fitzgerald reports. It could be both a sign of an improving economy and the greater strength of community newspapers compared to metropolitan papers.

W.B. Grimes & Co. says in its latest newsletter that recent sales of weeklies have been for five to seven times their cash flow, “with several deals completed at the higher end.” However, “Another broker with a speciality in community newspapers does not see the market quite so optimistically,” Fitzgerald writes. “John Cribb, managing director of Cribb, Greene & Associates, said he believes the valuations for weeklies will remain in the 4 times to 8 times area, with most deals in the 5 to 6 times EBITDA,” which stands for earnings before interest, taxes, depreciation and amortization and is not exactly the same as cash flow. “The number of deals may rise if we can get banks to loan money,” Cribb told Fitzgerald. (Read more)

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