http://www.businessweek.com/articles/2013-07-11/how-investing-in-print-could-pay-off#r=nav-r-story
News Corp. Time Warner. Now, Tribune. They’re all spinning off their
declining print businesses.
Why would anyone buy these orphans? Because they will offer pure plays on
what promises to be more mergers and acquisitions in the industry. It might
even get exciting.
“The spun-off publishing companies may be better positioned to consolidate
the shrinking newspaper and magazine industries,” says Paul Sweeney of
Bloomberg Industries.
Rupert Murdoch’s News Corp. Publishing, he notes, will be the biggest U.S.
publisher, with $8.2 billion in revenue and $1.3 billion in earnings before
interest, taxes, depreciation, and amortization. Its $2.6 billion in cash and
no debt leave it primed to acquire titles. Murdoch has been seeking ways to
take out Tribune’s (TRBAA)Los Angeles Times,
people familiar with the matter told Bloomberg News in March. Last year, News Corp. (NWS) management looked into acquiring about a fifth of Time Inc.’s (TWX) magazine titles, according to two people with
knowledge of the matter who asked
not to be named because they weren’t
authorized to speak publicly.
According to Bloomberg, News Corp. Publishing has more cash at its disposal
than any print competitor. “They will be acquisitive—that’s the way they
operate,” Karen Klapper, a debt analyst at CreditSights, told Bloomberg’s
Edmund Lee on July 1. “That’s the only way it grows. Publishing is only going
one way these days, and it’s not up.”
