Barron’s’ Andrew Bary sifts through the numbers and determines that Wall Street is “starting to write an obituary for the newspaper industry.” One cue: veteran newspaper investor Warren Buffett “sounds gloomy.” But all is not lost, Morgan Stanley newspaper analyst Douglas Arthur tells the weekly: “You can argue about the secular issues until you’re blue in the face … but these are companies with quasi-monopolistic franchises, little debt and high free cash flow. There’s value in the group.”
Then Bary veers into LBO fantasy land … always a fun place to visit. Knight-Ridders’s lack of “family-control situation” might make it an attractive LBO target.
The I-word — internet — shows up three times in the article, as a reason for the industry’s woes and as a slam at NYTCO for the About purchase. (“The Times didn’t help its cause on Wall Street by paying a rich $410 million for About.com, an Internet site with just $40 million in annual revenues.” Reminder: Barron’s is owned by Dow Jones, which made its own hefty internet purchase of MarketWatch.) The result is a disconnect between the internet as harmful to newspapers and the internet as revenue generator for those same newspaper companies … (via Romenesko)
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