Addendum to this post: Friday's Chicago Tribune story attributes the lowered selling price not to market value, but to the role of CareerBuilder (CB) in the transaction. Since Tribune and Gannett (the original buyer) both own stakes in CB, the thinking apparently goes that the deal had to capture the value of Career Builder as the paper would have moved from one company to the other. That value -- given sale -- would probably be in the two Connecticut papers' share of the Tribune's equity stake in CB, not in the annual revenues gained from the affiliation. So the thinking would go that Media News -- not a CB owner -- wouldn't be getting that value.
That argument has a certain logic, though I haven't done the arithmetic yet on the value of Tribune's current overall CB stake value. If it is correct, it would be surprising to see these assets going at close to what they went for earlier in the year. The stock market has taken down the value of most public news companies by more 10% during the same period. So that might well tell us that Tribune's original selling price was too low, or that Media News paid more than it had to, the latter being the more unlikely scenario. Of course, now Media News has a great concentration of properties in Connecticut and its cost savings -- through bundling and cutting "redundancy" -- makes the two properties more valuable to it.
As properties (post-Zell Tribune+) hit the market, we'll get the chance further to see value assessed.
How do you put a number on the toll of unstoppable newspaper print revenue declines this year?
One way is to consider today's announced sale of the Stamford Advocate and the Greenwich Time by Tribune to Media News. The sales price: $62.4 million.
Just last March, Tribune tried to shed the papers, selling them both to Gannett, which nullified the deal when it couldn't break existing labor contracts. The sales price then: $73 million.
That's a 14% drop in roughly seven months.
Sure, New England may be hit harder than other areas by some revenue declines, but the number has great meaning nationwide. Double-digit revenue declines in classified advertising have already taken a substantial toll, diminishing newspaper value -- and power -- going into 2008.