No one’s selling today unless they have to, and in traditional media, some of them just have to, a buyout pro told me. There isn’t a lot of happy news for print media companies this summer.
Cox Communications is trying to sell some of its newspapers, which PE firms are interested in, one source says, but not at the 10X to 11X multiple investment bank Citigroup is hoping for. Meanwhile, American Media Inc. — backed by THL Partners and Evercore Partners — today saw its CEO make a last-ditch offer to save his company from bankruptcy.
The Newark Star-Ledger is threatening to sell, too, but after watching the ugly investments of both Avista Capital Partners (Star-Tribune) and Willis Stein (Ziff Davis) in print media space, who would be so brave as to leverage a company with a declining business model?
A very smart media guy at Warburg Pincus once told us his theory on the future of print media outlets: they’ll be propped up and sustained by independent private trusts, because they no longer have a viable, money-making business model.
There’s one area of traditional media that’s looking hopeful, and that’s radio. Buyers, seeing opportunity with Clear Channel’s year-long buyout distraction (and subsequent divestiture requirements), have seen the space as a strong place to invest. Assets up for sale in the space (probalby including Clear Channel’s 500 or so divestitures) are being valued in the 9-11X EBITDA range, which makes me nostalgic for those high-multiple, pre-credit crunch days of yore.