What have we learned from the sale of the Star-Tribune to a private equity firm that was just created in 2005 by a bunch of richie-rich business men?
1) Newspaper industry analyst John Morton told the Associated Press that newspapers are looking to sell: “"Clearly what is happening to McClatchy is that they are much more concerned about their overall financial performance than they are about publishing newspapers.”
2) Avista partner OhSang Kwon says now it’s a buyer’s market: “We think it's just a good time to buy. I think they've been oversold. They're terrific platforms, they have very broad reach, and we think they're going to be around for a long long time."
Combine these two points and it makes for a volatile financial future. Big media companies are under pressure to meet high financial expectations. Meanwhile private interests such as Avista are looking for bargains, companies that look bad now but could turn around over time.
As I’ve said, going private (or in this case, being bought by a private firm) is a real option for a newspaper industry that has to suffer before finances will get better.
Expect to see more variations on this theme.
Comments (1)
Going private is part of the news, and that's certainly a trend, but from my perspective the real story is that the Star Tribune lost more than half of its value in just eight years. It was purchased for $1.2 billion in 1998 and sold for $530 million last week.
Maybe McClatchy is just pulling the rip cord and Avista is bargain hunting, but that's still a huge drop.
Posted by Lee Aase | January 2, 2007 9:25 PM
Posted on January 2, 2007 21:25