Providence Journal could be worth as much as $50 million

Reed Phillips III, a media analyst at DeSilva & Phillips in New York, has estimated the worth of The Providence Journal at between $35 million and $50 million. More

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Providence Journal could be worth as much as $50 million

A MEDIA ANALYST believes the Providence Journal -- which parent A.H. Belo Corp. said yesterday it is looking to sell -- could be worth between $35 million and $50 million.
Posted 12/5/13

PROVIDENCE – Reed Phillips III, a media analyst at DeSilva & Phillips in New York, has estimated the worth of The Providence Journal at between $35 million and $50 million.

The Journal’s parent company, Dallas-based A.H. Belo Corp. announced Wednesday morning that it is exploring the sale of the 184-year-old daily.

Last month, Belo sold the Press-Enterprise of Riverside, Calif., to Freedom Communications Inc., which also owns the Orange County Register in Santa Ana, Calif., for $27.3 million.

The Press-Enterprise – with a daily circulation of 127,350 and Sunday circulation of 151,642 – is a larger paper than the Journal, but the latter’s 2012 revenue of $93.8 million as reported in Belo’s annual 10-K filing exceeded the Press-Enterprise’s $65.4 million.

The Providence Journal’s circulation has dwindled over the last several years, from a daily circulation of 101,123 in 2010 to its current 78,000, a 22.9 percent decline. Its Sunday circulation has also dropped 22.9 percent, from 137,339 to 105,800.

Despite falling readership, revenue from circulation was roughly the same in 2012 as in 2010. Meanwhile, a surge in printing and distributing revenue – from $5.4 million in 2010 to $13.2 million in 2012 – helped to offset a 22.8 percent decline in ad revenue.

“Other factors that will influence the value are whether real estate is involved in the sale and what the pension liabilities are to former employees,” said Phillips. “The first brings the value up, the latter brings it down.”

According to The Providence Journal, only the company’s production facility at 210 Kinsley Ave. would be included in Belo’s sale of the paper, although Providence Journal Co. President, Publisher and CEO Howard G. Sutton said the buyer could purchase the main office building at 75 Fountain St. and the surrounding parking lots separately.

The Providence tax assessor’s website shows that the office building on Fountain Street is assessed at $10.4 million, and the production facility is assessed at $4.6 million. Roger Williams University has long considered leasing the first three floors of the Fountain Street office for its law school.

“The biggest component is 75 Fountain St.,” said Mike Giuttari, president of MG Commercial Real Estate. “If Roger Williams goes through with what they want to, that will probably stabilize that building, and the Journal will contract to the other half.”

Sutton told the newspaper’s staff that Stephens Inc. – the company hired by Belo to help it find a buyer – will compile a study of the Journal to present to potential buyers before soliciting bids. The sale, if one were to occur, would likely be next year, he said.

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