News DJ To Sell Local Newspapers: 10X-12X Cash Flow


Murdoch has suggested he will immediately dump Dow Jones “Ottaway” local papers, which include the Cape Cod Times.  According to Ed Atorino, newspaper analyst at New York investment bank Benchmark Co., the papers should fetch 10x-12x EBITDA, or $660 million, comparable to the multiples for other high-quality local papers that have sold recently.  National papers have gone for less: 9x-10x.  Likely buyers for the DJ papers include Gannette, Lee Enterprises, and  GateHouse Media.

How expensive is 10x-12x EBITDA?  Put it this way: Anyone who buys the papers is betting that their current cash flows will hang in there for at least a decade.  In other words, even at this price, they ain’t cheap.  Boston Globe via New York Times

See: Why Newspapers Are Screwed (Running the Numbers).