Valuation of Hispanic Media Companies: A Newspaper Broker Provides Advice to Hispanic Publishers
Portada: Can you explain the way the current Hispanic newspaper industry resembles the Free publication industry twenty years ago?
John Cribb: “The Hispanic newspaper industry is quite young, and many of the publisher/owners of these papers are also the founders - which is the same situation of the Free paper industry of twenty to thirty years ago. Other similarities include that Hispanic publications are typically free distribution products, and are serving a new and growing market niche. Interesting to us is that the "free publication" model of both Free and Hispanic papers is precisely the same model as Internet-based publishing (which is the free distribution of information using a revenue stream from advertising). “
Portada: What do you recommend Hispanic publishers?
Cribb: Something we learned from study and brokerage of free papers in the early stages of that industry was that many of these publications were not being professionally managed. Typically these papers were a "labor of love" and the founders were unaware of good publishing management techniques that insure solid profitability. At some point most owners will face a sale of their publication, and will need to show potential buyers a company with good profits, revenue growth, and strong management in place. We suggest that Hispanic publishers evaluate (or appraise) their operations with an eye to running tight, clean operations.
Look on www.portada-online.com this week for a table explaining the valuation (sales/multiples) of different Newspaper properties.
April 9, 2007:Analysis: The Continued Strength of Community Newspapers
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