Sales of dailies by family and independent owners and acquisitions by groups building regional clusters combined to make 2017 the busiest transaction year for daily newspapers in nearly two decades, according to an analysis by the Santa Fe, N.M.-based newspaper brokerage Dirks, Van Essen & Murray.
In total, 80 daily newspapers changed hands in 2017 in 31 transactions worth $347.97 million, the firm said.
It noted that the number of transactions beat the record-setting year of 2007 by one deal, and was the most since 2000, when 53 transactions involving dailies occurred. The year 2007 set a record for the dollar volumes of transaction—$20.04 billion, Dirks, Van Essen & Murray said.
In 2017, DV&M itself was involved in 19 transactions with 40 daily newspapers and 16 different buyers.
Phil Murray, the firm’s senior vice president, said the activity was driven by two factors.
One was the sale of independently owned properties and small family-owned groups that are increasingly finding it difficult to operate effectively in today’s advertising environment.
The other was the industry’s focus on building regional publishing clusters, which often requires more separate deals when group owners decide to sell. In 2017, for example, the sale of Civitas Media’s newspapers, which were scattered across several states, required nine separate transactions involving nine different buyers.
The sale of newspapers to non-strategic buyers is becoming the exception rather than the rule. In 2017, there were 23 transactions involving single daily newspapers or small clusters of dailies/weeklies. Of these, 16 were acquired by companies that owned adjacent or nearby operations, Murray said.
“Buyers are looking for more scale in regions where they own newspapers,” Murray said. “It’s becoming increasingly difficult to operate smaller newspapers on a stand-alone basis.”
DV&M expects the newspaper deal flow to continue at a similar pace at least through the first half of the year. The number of dailies sold in 2018 is likely to remain similar to the experience of recent years, which generally range from 50 to 80 per year. Valuations should remain steady and consistent with those over the past 12 months, the firm said.