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Small Newspapers Going Cheap: Study

While revenue losses at smaller and mid-size newspapers have been less than big metro dailies, many have put themselves on the auction block - and their asking prices have never been cheaper, making some of them good investments, says brokerage firm Cribb, Greene & Associates.

Many smaller newspapers can currently be purchased for between four and eight times their earnings before income tax, depreciation and amortization (EBITDA), says John Cribb, managing director, who points out that a few years ago, prices were between 10 and 14 times EBITDA, writes MediaPost.

Cribb says that ad revenues at smaller newspapers are down between about 10% and 15%, compared to total newspaper industry revenues, which were down 16.6% in 2008 and a staggering 28.3% in Q1 09. Total measured advertising expenditures in the first quarter of 2009 plunged 14.2%

However, as many smaller papers are privately owned and don’t share financial results, it is difficult to know just how much ad revenues have fallen.

PricewaterhouseCoopers expects that newspapers will continue to suffer declines in total global revenue in coming years, losing a total of $25 billion by 2013 due mainly to a steady decline in print ad revenue. Newspaper advertising will fall by a cumulative 32.7% throughout the next three years, but will begin to rebound in 2012, writes Editor & Publisher.