reDesign

September 17, 2008

Wall Street and the incredible shrinking newspaper industry

Filed under: google, journalism, media, microsoft, newspapers, yahoo — Rakesh Agrawal @ 8:35 pm

A friend asked me today “Does one Bear Stearns bailout equal the entire newspaper industry?” I decided to find out.

Although there isn’t a clear answer, I was surprised by how small the newspaper industry is. Here are the market caps for publicly traded newspaper companies:

Company Market cap (millions)
Washington Post Co. $5,450
Gannett 3,640
New York Times 1,960
Belo 627
Scripps 388
McClatchy 283
Media General 198
Lee 114
Daily Journal 64
Sun-Times Media Group 19
Combined $12,743

The key newspapers that are missing from this list are the Tribune papers and the Wall Street Journal. If you add in the $5 billion that News Corp. paid for the Journal and assume that Tribune is worth $2.25 billion ($8.2 billion value of the deal, discounted at the same rate as McClatchy’s year-to-date performance), the total value of the industry comes to $20 billion. (I’m being generous here and not subtracting out Kaplan’s contribution to the Washington Post’s market cap, which is likely 2/3 to 3/4 of the $5.5 billion.)

By comparison, the government has committed $30 billion in loan guarantees to Bear Stearns and $85 billion to AIG. The actual cost to taxpayers won’t be known for sometime. Bank of America is paying more than twice the value of the newspaper industry for Merrill Lynch.

Some other comparisons:

Market cap of selected companies (in billions)

Market cap of selected companies (in billions)

In other newspaper news:

More on: journalism, newspapers

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4 Comments »

  1. A couple of notes:

    XON is off about 21% from its 52-week high. In the last four months, XON’s lost in market cap is about 8 times the value of the entire newspaper industry.

    Newspapers are still worth more than Ford, and twice as much as GM.

    Perhaps a better comparison would be against another flailing industry: Airlines. The newspapers industries market cap equals that of the legacy carriers.

    Comment by robert — September 18, 2008 @ 7:16 am

  2. A couple of notes:

    XON is off about 21% from its 52-week high. In the last four months, XON’s lost in market cap is about 8 times the value of the entire newspaper industry.

    Newspapers are still worth more than Ford, and twice as much as GM.

    Perhaps a better comparison would be against another flailing industry: Airlines. The newspapers industry’s market cap equals that of the legacy carriers.

    Comment by robert — September 18, 2008 @ 7:17 am

  3. [...] a bit less than the $20 billion I estimated for the U.S. newspaper industry as whole. But I was being generous and not subtracting out non-newspaper [...]

    Pingback by Google guys = 2(newspaper industry) « reDesign — September 19, 2008 @ 9:50 am

  4. I suspect that if you had made the same comparison 10 years ago, the newspaper industry would have looked much bigger than it does now.

    Comment by Evil Pundit — September 21, 2008 @ 3:25 am


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