If The Newspaper Industry Is In Such Bad Shape, Why Is There So Much M&A Activity?

In the media industry, robust M&A activity is usually a sign of health. Sellers looking for an exit — seeking to convert equity to wealth — find plenty of potential buyers. Prices are attractive for both sides — so deals get done.

In the newspaper industry of 2021, there remains a lot of M&A activity, which tells a somewhat different story that the usual overwhelmingly bleak narrative.

Some of the deal-making is high profile, like Alden Global Capital’s acquisition of Tribune Publishing earlier this year, or its current bid for a hostile takeover of Lee Enterprises. That impending transaction, should it happen, may not have a favorable outcome, but it doesn’t reflect on the health of the Lee Enterprises business. Lee, which owns 75 daily papers, reported revenue of $196.4 million for its third quarter of 2021, an increase of 7.6% over the same period the prior year.



Lee also reported digital revenue of $66 million, more than one-third of total revenue and a 48% increase over last year. EBITDA totaled $27 million, an increase from the prior year for a second straight quarter. Lee’s third quarter ended on June 27, the most recent performance results the company has released.

Then there was the announcement this week of Ogden Newspapers buying Swift Communications. Swift publishes local daily and weekly newspapers, magazines and other media in a dozen markets in Colorado, Utah and California, along with a number of national niche and agricultural magazine products.

Ogden, based in Wheeling, West Virginia, is the publisher of the well-known magazines Grit (for rural audiences) and Mother Earth News. With the purchase of Swift, it will publish 54 daily newspapers and a number of weekly newspapers and magazines in 18 states.

These acquisitions are just the tip of the iceberg, which reflects the highly distributed nature of the newspaper industry. The top markets are consolidating into big chains, but there are plenty of independent newspaper brands in tertiary markets and rural towns and cities.

For example, the M&A firm Grimes, McGovern & Associates does a lot of business in the small newspaper market. In a Dec. 2 newsletter from that firm, it announced the sale of The Laker/Lutz News, a weekly community newspaper brand serving the Tampa area to Street Media LLC, parent company of the Village Voice, LA Weekly, Irvine Weekly and the Bay Area Marina Times.

In the same newsletter, the firm had 15 other newspaper offerings, most of them weeklies in places such as Pacific Northwest’s Treasure Valley, Northwest North Dakota, central Pennsylvania, coastal South Carolina and Upstate New York. One listing promises that it’s “The Only Newspaper in the County!”

If I had to guess, I’d say most of these businesses are tiny, probably under $1 million in revenue. But still, if there’s a macro narrative that says the newspaper industry is withering, the story on the micro level says there are a lot of transactions in small markets, and there is a business in small dailies, weeklies and specialty media brands.

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