End of the world reloaded
Column The big US media groups, once said to be the most profitable legal investment after casinos, have dramatically lost market value.
Even those accustomed to doomsday scenarios from the US newspaper industry will take a deep breath: of the 8 billion dollars that the Tribune Co. spent at the turn of the millennium to incorporate Times Mirror and thus the Los Angeles Times into its group, 3.8 billion dollars had to be written off these days. The New York Times - one of the few papers on the other side of the Atlantic that still maintains reporting on the media industry and journalism - recently calculated how the stock market values of newspaper companies, which were once said to be the most profitable legal investment after casinos, have developed.
The large corporations have lost market value dramatically. The Washington Post Co. has lost 24 percent since the beginning of 2008, the New York Times Co. 26 percent and the largest newspaper group in the USA, Gannett, 52 percent. For many other listed publishing houses, price falls of 50 to 70 percent in the last one to two years are the order of the day. And there are even more drastic cases. For example, the market capitalization of the Journal Register Company, which publishes the New Haven Register and hundreds of smaller newspapers, fell to one million dollars in August 2008. The papers have thus lost 99 percent of their value since the beginning of the previous year. In the same period, GateHouse Media, another publishing house that publishes hundreds of small local papers, has lost almost 98 percent of its market value and is now listed at a market value of 26 million dollars. The Sun-Times Media Group in Chicago is trading 91 percent lower than in January 2007 and its share capital is currently valued at 34 million dollars.
Stock market players may now be wondering whether these are buy prices - and are certainly in good company with a large number of investors from outside the industry who are thinking "now or never" about taking advantage of this opportunity. Others who may have believed in synergy effects and their own superior management talents - such as Sam Zell in the USA and David Montgomery in Europe - have already got bloody noses. Which is why we'd better refrain from the surefire tip for investing or destroying money in the summer slump.
Instead, on this occasion - the Olympics are just coming to an end - we would like to remember Al Neuharth. He was, so to speak, the marathon runner and gold medal winner in the American newspaper business at the end of the 20th century.
In the space of two decades, he has turned the upmarket tabloid he founded, USA Today, into the highest-circulation US newspaper - with first-class sports coverage, by the way.
As a precaution, however, the optimist and bon vivant ¬Neuharth had already played out the end of the world twenty years ago - and imagined the lead story that the leading US newspapers would report on immediately beforehand. His headline versions: New York Times: 'End of the World - Third World Countries Hardest Hit'; Wall Street Journal: 'End of the World - Dow Jones Index Plunges to Zero'; Washington Post: 'End of the World - Government Sources Say White House Ignored Early Warnings'; USA Today: 'We're All Dead! Latest sports scores p. 6'. The joke may sound more macabre today than when Neuharth invented it. However, if it was intended to encourage a cheerful, summery serenity in dealing with the scenarios of the exodus of our daily newspapers, it still served its purpose in the Olympic year 2008.
The large corporations have lost market value dramatically. The Washington Post Co. has lost 24 percent since the beginning of 2008, the New York Times Co. 26 percent and the largest newspaper group in the USA, Gannett, 52 percent. For many other listed publishing houses, price falls of 50 to 70 percent in the last one to two years are the order of the day. And there are even more drastic cases. For example, the market capitalization of the Journal Register Company, which publishes the New Haven Register and hundreds of smaller newspapers, fell to one million dollars in August 2008. The papers have thus lost 99 percent of their value since the beginning of the previous year. In the same period, GateHouse Media, another publishing house that publishes hundreds of small local papers, has lost almost 98 percent of its market value and is now listed at a market value of 26 million dollars. The Sun-Times Media Group in Chicago is trading 91 percent lower than in January 2007 and its share capital is currently valued at 34 million dollars.
Stock market players may now be wondering whether these are buy prices - and are certainly in good company with a large number of investors from outside the industry who are thinking "now or never" about taking advantage of this opportunity. Others who may have believed in synergy effects and their own superior management talents - such as Sam Zell in the USA and David Montgomery in Europe - have already got bloody noses. Which is why we'd better refrain from the surefire tip for investing or destroying money in the summer slump.
Instead, on this occasion - the Olympics are just coming to an end - we would like to remember Al Neuharth. He was, so to speak, the marathon runner and gold medal winner in the American newspaper business at the end of the 20th century.
In the space of two decades, he has turned the upmarket tabloid he founded, USA Today, into the highest-circulation US newspaper - with first-class sports coverage, by the way.
As a precaution, however, the optimist and bon vivant ¬Neuharth had already played out the end of the world twenty years ago - and imagined the lead story that the leading US newspapers would report on immediately beforehand. His headline versions: New York Times: 'End of the World - Third World Countries Hardest Hit'; Wall Street Journal: 'End of the World - Dow Jones Index Plunges to Zero'; Washington Post: 'End of the World - Government Sources Say White House Ignored Early Warnings'; USA Today: 'We're All Dead! Latest sports scores p. 6'. The joke may sound more macabre today than when Neuharth invented it. However, if it was intended to encourage a cheerful, summery serenity in dealing with the scenarios of the exodus of our daily newspapers, it still served its purpose in the Olympic year 2008.
