Monday, July 28, 2008

New York Times is Worth How Much?

The New York Times, which is really a national newspaper with a comparable circulation to USA Today, has been reported to have a remarkably low value, according to Business Week. How low did the New York Times go? On Wall Street, its trading value has plummeted to half of what it enjoyed from just a year ago to $12.48 per share. That means it only has a market cap of less than $1.8 billion.

Business Week states, to "put this in perspective, CBS recently acquired tech publisher CNET, a much weaker media brand, for $1.8 billion. Add in the company's $1.1 billion of debt, subtract $42 million for its cash on hand, and the company's total enterprise value—a valuation measure that totals up those items in such a fashion—is just $2.85 billion."

Newspapers are taking a beating every where. In 1993 the Boston Globe sold for over $1 billion. Last year it was being marketed for around half that ($500 to $600 million). Most newspapers have faced a crushing blow because of the Internet and the rise of the new media. The Wall Street Journal, which was sold by the Bancroft family to Rupert Murdoch's News Corp for $5 billion (roughly twice its value on the stock market) is a happy exception to what is going on in old media. The fact the Bancroft family -- which seemed very connected to its publication -- sold it at all, demonstrates how concerned they were about the future of their holding.

Increasingly newspapers are trying to make the shift to the web as their primary media vehicle. New York Times has even gone so far to say that it could be exclusively online in a few years. Unfortunately, many newer companies are well ahead of them in this game and brand loyalty simply isn't what it use to be. The only newspapers that have enjoyed an increase in advertising dollars in recent years are those that are free. Be the writing in the newspaper or on the Internet, the writing on the wall isn't very positive for many of the strongest names in print media.

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Kevin Price is Host of the Houston Business Show (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at HoustonBusinessShow.com. Visit the archive of past shows here.

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