Deal volume increases for third straight year

The market for newspapers remained strong in 2014, as the total dollar amount of daily newspaper deals rose for the third straight year and several new buyers emerged on the scene.

Leading the pack was the newly public New Media Investment Group, owner of GateHouse Media, which landed the largest deal of the year and closed or announced six transactions involving dailies. The year just ended also saw the establishment of a new community newspaper player – Adams Publishing Group – and new local owners in Minneapolis and Anchorage.

Another public company, Tribune Publishing, also made acquisitions in 2014, reversing a post-recession trend that had seen very few print purchases made by the public newspaper companies.

We do not anticipate any noticeable change in the pace of deal activity or values in 2015, unless there is a significant improvement in print advertising trends. We do, however, expect the buyer pool to deepen with the addition of two new newspaper-centric public companies in 2015 through spin-offs by Gannett and E.W. Scripps/Journal Communications.

By the Numbers
In total, 67 daily newspapers were sold last year in 23 transactions worth $760.20 million. The dollar volume was well ahead of 2013 ($681.08 million), and the number of dailies changing hands was more than twice the number sold in 2013.

The dollar volume in 2014 was just shy of the post-recession high of $788.75 million in 2011, which was driven largely by the sales of the Omaha World Herald Co., Journal Register Co. and the New York Times regional newspaper group.

New Media was the story in 2014, announcing a $280 million acquisition of Halifax Media Group near the end of the year. The deal closed in early 2015. Halifax, which got its start in 2009 and built through acquisition rapidly, had made its last addition – the Worcester (Mass.) Telegram & Gazette – in mid-2014.

New Media also bought the Providence (R.I.) Journal, a group of community newspapers in Texas and Oklahoma and two dailies in southern California among others. New Media went public in early 2014.

Also of note was the emergence of Adams Publishing Group, which made its first newspaper transaction in the first quarter of the year. This first deal consisted of community newspaper groups in Minnesota, Wisconsin, Ohio and Maryland that were acquired from American Consolidated Media.

Adams Publishing is part of a large family operation that includes investments in outdoor advertising, recreational vehicle sales and other businesses.

Boone Newspapers continued to be very active in the current marketplace, landing four deals that involved daily newspapers through affiliate companies. Boone has been one of the most acquisitive companies in the industry in the post-recession era.

Finally, local businessman Glen Taylor bought the Minneapolis Star Tribune, and a  local owner emerged for the Anchorage (Alaska) Daily News, representing a continuation of a trend toward local ownership in larger markets.

Outlook
Over the past four years, annual newspaper transaction volume has been in a fairly tight range between $642 million and $788 million. We do not expect any major deviation from that range in 2015.

The most significant change in 2015 is likely to be the addition of two new public companies. Gannett plans to spin off its newspapers into a separate company. In addition, E.W. Scripps and Journal Communications have announced plans to merge and create two new public companies – one that will be primarily newspapers.

Managers of the companies in both cases have said they anticipate that the new print concerns will be active in the acquisition market. Both will be starting will little or no debt.

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