Media Watch

CC Times parent to sell 6 newspapers

Ottaway offer dailies in California, Pennsylvania and New York for sale
Times not on list yet, it's the second time for some of them

The last time the newspaper industry took a nose dive five years ago, Dow Jones offered up many of their Ottaway community newspapers for sale. Some sold, some didn't.

For the Santa Cruz CA Sentinel it must be embarrassing to be rejected by buyers then only to be offered up again.

Times, Inky-Mirror, not on list
Ottaway outpaces others 6 to 1

The Sentinel is one of the six on the block now according to a Wall Street Journal story today.  The two local mastheads owned by Ottaway, The Cape Cod Times and the Nantucket Inquirer & Mirror, are not among the six.

The sale was announced despite the fact that the Ottaway Newspaper group has performed better than the rest of Dow Jones and has consistently been a high profit generator for the company, with margins that outpace the larger Wall Street Journal operation.

According to WSJ, "Through the first six months of 2006, for instance, the community-newspaper segment reported revenue of $171 million and operating profit of nearly $32 million, or a margin of 19%. By contrast, the company's flagship consumer media segment -- which includes the Journal, Barron's and online site MarketWatch -- notched $567 million in sales and $17 million in operating profit, or a margin of 3%."

 Thus we read one more chapter in the "Mating Sounds of Dinosaurs". Here's the start of the WSJ story.

Dow Jones Looks to Sell Six Community Papers
By DENNIS K. BERMAN, August 28, 2006; Page B3

Dow Jones & Co. has put a number of its community newspapers on the auction block, according to people familiar with the matter, as the publisher aims to push deeper into electronic media while taking advantage of a one-time tax break.

The company, which publishes The Wall Street Journal, is shopping six titles from its Ottaway Community Newspapers division. The markets include Danbury, Conn.; Oneonta and Plattsburg, N.Y.; Santa Cruz, Calif.; Sunbury, Pa.; and Traverse City, Mich. Overall, Ottaway, publishes 15 daily newspapers and more than 30 weekly newspapers and "shoppers" in nine states in the U.S.

The papers on the auction block produce roughly $25 million or more in earnings before interest, taxes, depreciation and amortization, or Ebitda, according to a person familiar with the matter. Valuations for such community papers have in recent years run at about 10 to 12 times Ebitda, which suggests Dow Jones could receive about $300 million from a sale...

 Read the rest of the story here, and comment below.