meek-investor

The bankruptcy filings of the Minneapolis Star-Tribune and Tribune Co. are cast by many as a sign of the continuing decline of the newspaper market. However, it is noteworthy that neither firm is owned by a company with a newspaper heritage, but by firms in the newspaper business primarily for financial gain. The Tribune’s owner is from the real estate business and the Star Trib’s is from private equity. There is no doubt that the newspaper business is facing a difficult time now, but the business origins of the owners are important because their perceptions of bankruptcy, how the community will react, and how the company will be seen afterwards are colored by the norms and mores of those business fields. Newspaper companies have long played special roles in communities, exercising social and political influence, and promoting corporate responsibility, accountability, and community standards. Publishers and editors have typically sat with the other civic leaders on boards and committee...

The privatization of Clear Channel Communications ends a 2-year effort to buyout the leading radio and outdoor advertising firm. The $17.9 billion buyout by Bain Capital and Thomas H. Lee Partners allows the new owners the opportunity to pursue strategies with less influence from unpredictable investors pursuing short-term interests. The sale comes amid heavy competition in terrestrial and satellite radio, but provides the new owners more flexibility in deciding how to best operate the 900 radio stations, radio programming services, and subsidy that owns one million outdoor ad locations. The sale is just one more in a growing trend for private equity purchases of media firms. Their interest in media companies stems from the fact that the market value of many does not reflect the underlying cash flows and asset values or the mid- to long-term prospects of the firms. The valuation challenge of media occurs in good part because advertising expenditures are not evenly distributed throughou...