Next up, DFM

[steveu]

Found out from a friend of mine and former MLive co-worker that the DFM copy desk in the Detroit area eliminated a few positions. Some papers were sold to Hearst.

Not sure about layoffs at any of the papers.

 

[LanceyHoward]

According to this article Digital First Media is trying to sell. The article states that if someone offers 4.5X cash flow they can have a Digital First newspaper.;

Digital First Media's CEO steps down; what may lie ahead for the company?


I also did not realize Hearst is buying. I read an interview where management claims newspaper division profits have increased six straight years. So far most of their purchases seem to be around exisiting properites. I wonder if the Trump Justice Departmetn would let Hearst buy the BANG cluster that Digital First owns. If Justice allowed that then Tronc would surely try to buy the LANG group.

Hearst is privately held and owns lots of other non-newspaper assets. They own magazines, television stations, 20% of ESPN and other assets. But if Hearst wanted to they could pretty much buy up the American newspaper industry.

 

[Songbird]

Thought they rectified everything by eliminating Thunderdome.

 

[Fran Curci]

As for DFM, am I right in interpreting the vulture company's strategy this way? They strip down the paper as much as possible, which will raise profits (at least in the short term). Then as soon as they hit that designated profit level, they sell. So the better the paper does financially, the more likely it is to get sold?

 

[Fran Curci]

Hearst, mentioned above, seems to be doing some things right in Houston and San Francisco.

 

[LanceyHoward]

As for DFM, am I right in interpreting the vulture company's strategy this way? They strip down the paper as much as possible, which will raise profits (at least in the short term). Then as soon as they hit that designated profit level, they sell. So the better the paper does financially, the more likely it is to get sold?

No, a more profitable paper is equally likely to get sold.

As an example let's say you have paper A with EBITA of one million dollars. Paper B has EBITA of two million dollars. Digital First has a price 4.5X EBITDA on both papers, or 4.5 million on Paper A and nine million on paper B. Which paper is more marketable seems to have a lot to do with how interested a neighboring paper is in building a cluster of papers.

 

[LanceyHoward]

Hearst, mentioned above, seems to be doing some things right in Houston and San Francisco.

I have not been to San Francisco in five years (sigh). When I visit a city and pick up a paper I make a rough count of the ad pages. I was there I was shocked at how few ads the Chronicle had. I had been in Denver the week before and done the same thing. The Post had about four times as many ads on Mondays and Tuesday as the Chronicle. I find it hard to believe that the Chronicle is doing that well, especially since even in its halcyon days I don't think it had the metropolitan wide influence and circulation of papers like the Washington Post or Boston Globe.