No One Really Wants to Buy the Statesman

by: Karl-Thomas Musselman

Sat Mar 28, 2009 at 06:00 AM CDT

Four groups have made bids to buy the Austin American-Statesman, but none offered more than $50 million, Nicholas Carlson reported yesterday at Silicon Alley Insider.

To illustrate what a poor situation that is, let's go back to September, where media analyst John Morton told the Statesman's Dan Zehr that "a rule of thumb for valuing a newspaper is $2,000 multiplied by the average daily circulation over a week. For the Statesman, that comes out to roughly $350 million."

...

If that much has changed in the past six months, then the market for a profitable newspaper, with no other daily competition and a growing web presence, has bottomed out. The land that the Statesman sits on is worth $32 million on its own, according to Travis Central Appraisal District records.

So what does Cox do now? The company said it wouldn't rule out selling the paper and the land separately. They can either sell one of their well-performing papers for one of these low-ball offers, or hold on to it and see what's around the corner. It's a depressing situation to be in for the newspaper's owners, and for those who work there.

Sheesh. From the Business Insider, the bidders...

* Platinum Equity, which just bought the San Diego Union-Tribune.
* Chris Harte, who publishes the Minneapolis Star-Tribune.
* Hicks Holdings, which owns the Texas Rangers.
* Jim Friedlich of Zelnick Media.

...and this sad quote.

The $50 million figure is based mostly on the Stateman's real-estate footprint, our source tells us. The source is pretty sure Cox won't accept any of the offers.

"Austin's in this bizarre trap: It's so worthless you might as well hold onto it."

While we've certainly had a variety of opinions about the Statesman over the years, it's not like we want to see it go out of business and really, there's no reason that it should. It's all very odd.