December 19, 2011

by Jeff Bercovici

Uneasy as the leadership of The New York Times Co. may be about their current financial situation, they remain confident their flagship newspaper has a bright future. The same can’t be said for the 16 small and medium-sized papers the company publishes in California and the southeastern U.S. The prospects for those papers have been dimming, to the point that the Times Co. has decided to cut them loose.

The company’s in “advanced discussions” to sell the Regional Media Group to Halifax Media Holdings LLC, owner of the Daytona Beach News Journal and other papers across the region. Media blogger Jim Romenesko broke news of the impending sale after noticing that Halifax had, apparently prematurely, added the papers’ names to its corporate website. No word yet on what the price might be, but media appraiser Kevin Kamen tells me the group “does not appear to be worth more than $65 million in total valuation.”

Why sell? For starters, the Regional Media Group’s fortunes have been trending downward. Its revenues were down 6.7% through the first nine months of 2011, versus a 0.4% dip for the New York Times itself and a 5.5% decline for the Boston Globe, which isn’t part of the sale.

Even more to the point, Times executives have made building up digital circulation revenues the central pillar of their strategy. But generating those revenues — ie. getting readers to pay to read news stories on computers, phones and tablets — is a daunting task for papers that lack the brand recognition of a paper like the Times. When Janet Robinson, the Times Co.’s soon-to-retire CEO, came to FORBES’s offices in September, she acknowledged as much. “It’s harder for regional papers,” she told us. “They are at the beginning stages of monetizing their digital future.”

Ironically, the very success of the Times’s digital edition is contributing to the declines of regional papers like the ones it owns. Digital delivery means readers outside the New York area no longer face a choice between paying more for the Times or settling for a second-rate local paper like, say, the Gainesville Sun. According to a Times spokesperson, 81% of the digital subscribers the Times has signed up since putting up its paywall last March live outside the New York market. For the print edition, only 62% of the subscribers live outside the market.

Uniondale, NY – Kathleen F. and Gary J. McNall, owners of The Express newspaper, a weekly paid branded title, based in Mechanicville, NY have sold their newspaper to Cindy and Thomas Mahoney. The Mahoneys have 25 years of publishing experience and are very excited to own the respected newspaper in Saratoga County. The closing was July 28, 2011. The McNalls owned and operated the newspaper since 1997. The Express reaches approximately 10,000 readers weekly primarily in the Mechanicville, Stillwater and Schaghticoke areas of upstate, New York. Kevin Kamen, President of Kamen & Co. said, “We were delighted to secure a qualifed buyer for this wonderful weekly newspaper and wish both families the best of luck in the future. It was an honor to represent Kathleen and Gary McNall in this sale.” Terms of the deal were not disclosed.

By Inland Staff

Kamen & Co. Group Services is moving its corporate headquarters to the RXR Corp Plaza in Uniondale, N.Y. The newspaper appraiser and broker was previously located in Baldwin, N.Y.

The move was a necessary step due to the firm’s growth, according to Kevin Kamen, president and CEO of KamenGroup.com.

“We were delighted to sign this lease at the beautiful RXR Plaza, and by doing so, our staff will be able to improve its exceptional, quality service to our growing list of clients,” Kamen said in a statement.

Victoria and Josh Schneps, publishers of The Queens Couriers, in New York, celebrating 25 years, have acquired Brooklyn’s Home Reporter/Sunset News and the Brooklyn Spectator group of weekly newspapers.

This will be the media company’s groundbreaking foray into Brooklyn, establishing a firm foundation for growth throughout the borough. Kevin Kamen, president/CEO of Kamen & Co Group Services of Baldwin, New York, a leading print & digital media appraisal and brokerage firm, brokered the sale.

“Bay Ridge and its environs are some of Brooklyn’s premier neighborhoods, and the Home Reporter-Spectator is one of the borough’s oldest, most respected and successful newspaper chains,” explained new owners Victoria and Josh Schneps, who will be co-publishers of the titles, a position they also hold at the Queens group.

Veteran Brooklyn journalist Kenneth Brown, for 28 years the editor-in-chief of Courier-Life Publications and then CNG Publications, has assumed the role at the Bay Ridge-based Home Reporter-Brooklyn Spectator papers.

He will be working with longtime Home Reporter-Spectator staff writer Paula Katinas, Along with Katinas, the entire staff of the Brooklyn-based chain remains intact and integral to the continuing success of the papers – and excited about the bright future this acquisition holds for the publications. The building at 3rd Avenue and 88th Street remains the headquarters for the newspapers.

Within the next weeks and months, readers will find a revitalization and expansion of their hometown community newspapers. You’ll see more content, a current and visually pleasing re-design, and more color for photos and graphics.

“We will create a strong web presence and establish even greater community involvement. But the heart of the papers will remain intact: local news and issues of interest to the community.

“Perhaps most important, we are looking to the community to partner with us in this revitalization,” said co-publisher Josh Schneps. “We want you to help us expand the coverage of the Home Reporter and Brooklyn Spectator. We want your input; we want to hear of people, places, issues and events of importance to you. From a Bay Ridge social column, to a nightclub reporter, to insider politics and an inside look on Bay Ridge’s beautiful homes, we are looking for ideas, writers, photographers and columnists who can join us in this venture.”

Ted Nesi

Updated: Tuesday, 28 Dec 2010, 2:15 PM EST

Published : Tuesday, 28 Dec 2010, 1:21 PM EST

 

PROVIDENCE, R.I. (WPRI) – The highest price The Providence Journal would fetch in today’s market is $51 million, according to a leading media appraiser, an enormous drop in value since Belo bought the paper a decade and a half ago.

A buyer would probably be willing to pay between $42 million and $51 million for The Journal, Kevin Kamen of Kamen & Co. Group Services in Baldwin, N.Y., told WPRI.com. “It’s not worth a dime more than that,” he said.

The ongoing turmoil in the newspaper industry caused by readers’ migration online has led to a sea change in how investors value long-established print publications, which were reliable cash cows in decades past.

Although The Journal’s Dallas-based owner, A.H. Belo, has not expressed any interest in selling the local paper, The Boston Globe and some other major dailies have been shopped around by their parent companies in recent years.

In October, a Wellesley entrepreneur revealed he was putting together an unsolicited bid for The Globe. The news raised the question of how much it would cost a buyer to take control of Rhode Island’s statewide daily.

Howard Sutton, who has been The Journal’s publisher since 1999, did not respond to an e-mail requesting comment. The paper’s executives generally do not speak to reporters outside their organization.

In 1997, Belo paid $1.5 billion for the 168-year-old Providence Journal Co. and its nine television stations. Two years ago, the company split its TV and newspaper divisions into separate companies, with the new A.H. Belo taking The Journal and its sister papers, the Dallas Morning News and The Press-Enterprise of Riverside, Calif.

Prior to the sale, the Journal Co.’s broadcast division brought in 58 percent of its revenue. While it’s hard to say exactly how much of the $1.5 billion price tag represented the value of the actual newspaper, one-third of the total would put it at $500 million.

By that measure, Kamen’s current estimate of $51 million represents a 90 percent slump in value over 13 years. “It’s like winning the lottery and putting all the money in a pocket with a hole in it,” he said. “It’s really incredible how it has gone down in value.”

Kamen appraises the value of newspapers, magazines and other print properties for buyers and sellers. In 2008, he came within $25 million of predicting the $650 million sale price for New York Newsday.

Kamen emphasized that his estimate was only a rough one because he does not have details about The Journal’s finances beyond the information publicly disclosed by A.H. Belo. The figure excludes real estate owned by the paper such as its downtown headquarters on Fountain Street.

Few buyers for papers today

A slightly higher estimate than Kamen’s was offered by Reed Phillips, managing partner at the media investment bank DeSilva & Phillips in New York. He suggested The Journal could sell for $50 million to $75 million, adding that the information available about the paper’s finances is too limited to offer a tighter range than that.

The Journal’s current value would probably be pegged at four to five times its annual earnings before interest, taxes, depreciation and amortization, said John Morton, a veteran newspaper industry analyst. That would put the combined value of all three A.H. Belo papers at $232 million to $292 million as of last year.

But private equity investors, who are “about the only ones making bids on newspapers these days” , would probably offer even less than that for the paper, Morton said in an e-mail.

Last year, the Beverly Hills-based private-equity group Platinum Equity reportedly paid between $40 million and $50 million to buy the San Diego Union-Tribune newspaper from Copley Press.

The Union-Tribune’s circulation was 270,000 in 2008, and the deal also included valuable real estate. The Journal’s average circulation was 96,595 on weekdays in the six months ended Sept. 30, according to the Audit Bureau of Circulation.

Platinum Equity also “bid on Cox’s papers in Texas, but the bid was so low that Cox withdrew the papers from the market, and pretty much the same thing happened with The Boston Globe,” Morton said. The New York Times Co. rejected two offers for The Globe last year.

Cloudy outlook limits estimates

Kamen’s estimate of a $42 million to $51 million purchase price for The Journal “sounds reasonable,” Rick Edmonds, media business analyst at the nonprofit Poynter Institute in Florida, wrote in an e-mail.

It’s unlikely A.H. Belo would be interested in selling The Journal at that price, Edmonds said. “Valuations like that keep all but the most motivated sellers” , like the Copleys in San Diego , “from actually going through with transactions. Better to hold on and see if they can rebuild the franchise over a few years.”

The Press-Enterprise “is more the problem child among A.H. Belo properties” compared with the Providence and Dallas papers, Edmonds said. Executives say the California publication is the only one of the three that’s not making money before interest, taxes, depreciation and amortization.

The Journal’s appraised value should be based on future earnings, which are now highly uncertain for print media outlets, and therefore it could be “significantly” higher or lower than Kamen estimates, said Ken Doctor, a media analyst at the research firm Outsell and the author of “Newsonomics.”

“Pre-2000, in a steady-state industry, you could look at earnings and project a multiple,” Doctor said. “But there’s no longer any steady-state. Print revenues are still down and may well be down next year as well. Digital is growing, but still not quite enough to make up for print losses.

“So a buyer has to ask: what is the future of what I’m buying?” That cloudy outlook helps explain why Newsweek magazine recently sold for $1, he said.

‘Unbelievable’ circulation, ad losses

Concern about the health of The Journal is widespread in local political and media circles. The paper has long played an outsized role in setting the news agenda in Rhode Island, and even after multiple rounds of layoffs it still boasts the state’s largest newsroom.

Newspapers in the Northeast have been hit harder by decreases in circulation and advertising revenue than their counterparts in other parts of the United States, Kamen said, but The Journal’s declines are worse than average.

“It’s unbelievable what’s been going on there,” he said, noting that the paper’s daily circulation has fallen by 40 percent over the past decade. Nationwide, daily newspaper circulation fell 25.6 percent from 2000 to 2009, according to the Newspaper Association of America.

Kamen also said the paper risks driving away more of its remaining readers if it keeps increasing the cost of home-delivery subscriptions, which rose 14 percent to $416 a year in 2009.

The Journal’s management should “take three steps back and analyze what they’re doing and how they could more effectively rally the community, the advertising base and the readership to help grow the publication,” he said. “They can reply back and say these are tough times, everybody’s taking a loss , but very few have taken such a beating.”

“They have to take control of their destiny,” Kamen added.

Growth seen in online, iPads

The Journal increased its circulation revenue per copy from $167 in 2007 to $293 in 2009. That has likely reached a plateau at all three of Belo’s papers, making it all the more important for the paper to increase how much money it gets from digital ads and online readers, Doctor said.

Sutton recently told Journal employees the paper will debut a new version of its website, Projo.com, next summer designed by ExNihilo, a firm in Providence, according to a memo obtained by The Providence Phoenix. At that point the site will no longer offer all the content in the print edition for free, he said.

The paper also plans to launch apps for Apple’s iPhone and iPad next year and has hired the local marketing agency Nail Communications to lead a rebranding effort.

Like their peers at The Journal Register Co., A.H. Belo executives will be telling investors they can increase digital revenue quickly, though those gains could be neutralized if the print business continues to shrink, Doctor said.

Meanwhile, analysts expect more than 35 million tablet computers to be sold next year, led by the iPad, presenting another opportunity , and challenge for print publications.

“Belo is among the leaders thinking through and planning that transition,” Doctor said. “So, on the curve, [it's] well-positioned. New owners would need to make the same transition, with similar thinking, and that’s no sure thing.”

tnesi@wpri.com

Copyright WPRI

By Jeff Bercovici

Mixed Media

Image by Getty Images via @daylife

October 28, 2010 - Image by Getty Images via @daylife A group of investors, led by entrepreneur Aaron Kushner, wants to buy the Boston Globe. The New York Times Co. says it’s not for sale , but then that’s what the Bancroft family said when Rupert Murdoch offered them $5 billion for The Wall Street Journal, and look how that turned out.

So let’s play this game. How much would it cost to buy the Globe? And how much is it actually worth?

For some informed speculation, I turned to media appraiser Kevin Kamen, who correctly predicted Newsday’s sale price of $650 million, give or take $25 million. Since the Times Co. doesn’t break out figures for the Globe per se, only for the New England Media Group (which also includes the much smaller Worcester Telegram & Gazette), Kamen could only come up with a very rough estimate based on that group’s 2009 revenues of $440.6 million; its reported 2009 loss of $85 million, since reined in by $10 million of union-approved cost cuts; and its circulation of 264,000 on weekdays, 419,100 on Sundays.

Crunch all those numbers, and what’s the Globe worth? “I would say no more than $120 million,” says Kamen. “And I’m being very generous. I would say it’s worth, realistically, $75 million.” The extra $45 million, he says, is based on the assumption that whoever buys it must have an notion of how to make money from it beyond “Let?s buy this thing and see what happens.” (It’s worth pointing out that that’s exactly the spirit in which Sidney Harman bought Newsweek, but he only paid $1 for it.)

“Whoever’s buying this has got to have an ulterior motive,” says Kamen. “There’s got to be a bigger picture that’s consequential to them.”

Of course, even at $120 million, the Globe is still a relative bargain when you consider that the Times Co. paid $1.1 billion to acquire it in 1993, and that, as recently as 2006, Jack Welch was prepared to pay $550 million or more for it. Just imagine what it’ll be worth in another four years if the Sulzberger family holds out.

By Jessica Heslam

Boston Herald Media Reporter

Saturday, October 30, 2010 - The Big Apple-based newspaper broker who estimated the Boston Globe’s worth at $120 million tops said that price tag doesn’t include the beleaguered broadsheet’s employee pension costs.

Kevin Kamen, president of Kamen & Co., told Forbes this week that the Globe isn’t worth more than $120 million – and that it’s more likely worth $75 million. “Whoever does buy this is going to have to assume debt – no question,” Kamen told the Herald yesterday. “The big question is how much of that debt has to be assumed and what is that debt?”

“It’s got to be somebody with real deep pockets that has a sincere and a genuine reason for wanting it,” Kamen added. The New York Times [NYT] Co. bought the Globe for a staggering $1.3 billion in 1993 and failed to sell it last year. The Times yanked the Hub broadsheet off the market after fetching preliminary bids of $35 million from Stephen Taylor, whose family used to own the Globe, and Platinum Equity, a West Coast investment firm. The Times originally wanted potential buyers to assume $59 million in unfunded pension liabilities for the Globe and Worcester Telegram & Gazette – and then nearly doubled that figure to $115 million.

Wellesley greeting card entrepreneur Aaron Kushner has been meeting with some of Boston’s top business leaders and is putting together an investor group to try to buy the Times Co.’s New England Media Group, which includes the Globe, Boston.com and T&G.

Hub construction honcho John Fish said he met with Kushner a few weeks ago.

“It sounds as though they’ve got a very interesting perspective on how to re-engineer the Globe,” Fish said. “My sense was it’s just way beyond my space. It’s a very, very challenging proposition.”

As for the Globe’s worth, Kamen said yesterday he’s “more comfortable with the $75 million” figure. “These are really tough times,” said Kamen. James Boyce, founder of the Boston-based Common Sense New Media Strategies, said it’s a declining asset.

“No matter what the valuation is, there is not a model out there for turning around newspapers and making them more valuable,” Boyce said.

jheslam@bostonherald.com

Phil Rugile is trying to break a traditional publishing model so it won’t break him.

The maiden voyage of Cold Spring Harbor-based MYMAG, a print publication devoted to celebrities, can’t be found on newsstands and is not available via subscription. Want a copy? Go online and pony up $10 for the glossy print magazine.

Another break from the past? A single company buys the rights to all ads throughout an issue. Microsoft’s Bing and Diesel Jeans are on board as “single ad sponsorships” for the first three issues, all published simultaneously this week.

Also, Rugile and his partner, Marcus Greaves, are publishing magazines devoted totally to one celebrity, with the first three showcasing DJ and record producer Steve Aoki, model/actress Olivia Munn, and film/video director Brett Ratner. Hence the title – MYMAG.

Rather than launching a traditional marketing campaign to spread the word, MYMAG will rely on the celebrities own Twitter activity and their presence on Facebook and MySpace.

Those D-list denizens mentioned above ring no bells? Rugile is banking that enough people not only are familiar with them but also are willing to part with $10 to get a closer look.

“We’re taking trends in media and entertainment and how celebrities are trying to get closer and closer to their fans,” Rugile said. “We’re trying to capitalize on that connection and give the celebrities another channel to promote themselves in a purely viral way.”

Some warn that launching a print publication is like betting that the Titanic will beat the iceberg. Last year, 525 magazines went under and by February of this year another 40 titles sunk to the bottom, according to MediaFinder, an online database devoted to publications. Publishing legends such as “Gourmet” are history and other iconic glossies, including “PC Magazine” and “Playgirl,” are publishing online exclusively.

Marcus Greaves is all too familiar with collapsing print publications. In February his Doubledown Media closed shop along with it’s flagship magazine, “Trader Monthly,” a lifestyle publication aimed at wealthy Wall street types. But both partners maintain MYMAG’s new model is the key to success.

Rugile – a publishing lifer with stops at Time, Newsday and the Baltimore Sun among other places – said that private capital invested is approaching seven figures and that print runs will depend on the fans of the celebrity.

“We have a ‘secret sauce’ formula to determine how many copies to print based on how many fans someone has on their Facebook page and how many on their Twitter network,” Rugile said. “We’re intentionally keeping it small so we don’t have inventory sitting around.”

He estimated that print runs will be anywhere from 7,500 copies up to 50,000.

Kevin Kamen, chief executive of Baldwin-based Kamen & Company Group Services, which appraises publications and brokers sales, said the upside for MYMAG is that printing has become cheap during the recession.

“Printers will take anything they can get now because they’re starving,” Kamen said.

But Kamen doesn’t like the idea of any print launches in this market, no matter how innovative the strategy might be. “I’d advise against it,” he said.

The magazines are professionally laid out with sharp photographic spreads. Original content created by the celebrities are at the front of the publications followed by articles and images selected by them from publications including “Playboy,” “Interview” and “Rolling Stone.”

No money changes hands to get the big guns of publishing to come up with content. “We provide publishers with endorsement of their content, opening up new readership, bringing them into a unique environment where online and print intersect,” Rugile said.

The obscurity of the first three celebrities chosen to have their own magazine is in the eye of the beholder, Rugile said. Olivia Munn recently made an appearance on “Late Night With Jimmy Fallon.” “She was a killer,” Rugile said. “Owned the stage. She’ll be really big next year.”

As for DJ Steve Aoki and filmmaker Brett Ratner, they’re show biz insiders who have many followers, according to the publishers.

It’s hoped that Ratner, who directed the 2006 “X-Men: The Last Stand” and Mariah Carey videos will provide a springboard to future celebrities interested in having their own magazine.

“Brett brings validation to the concept,” Rugile said. “Along with Steve and Olivia, he’s not the A-list of household names, but it’s important that we present ourselves to the clients that we ultimately want to reach.”

   For Immediate Release: August 12, 2009