Is that because regional and city magazines aren’t as attractive to prospective buyers, particularly private-equity firms that may not think they can turn a property around and sell it for a premium to another buyer in three to five years? Or is that because owners of city and regionals just aren’t selling? We turned to two media bankers to get their thoughts on valuations for city and regional deals.
"Smaller, lower-growth titles sell for 6-8X EBITDA and 1-1.5X revenues," says Reed Phillips, managing partner at DeSilva + Phillips, which handled the ABARTA Media sales to Morris Communications, 7×7 and California Home & Design on behalf of Hartle Media, and Modern Luxury. "Larger, higher-growth titles sell for 8-12X EBITDA and 1.5-2.5X revenues. Profitability and growth potential are two of the most important factors." Still, there are regional titles capable of commanding a premium. "Sometimes you get the ﾑonce-in-a-lifetime’ opportunity to buy a magazine like New York and all the multiples go out the window," adds Phillips.
Regional magazines typically trade below special interest or national magazine multiples;typically in the 6-9X EBITDA or 1-1.5X revenue range, according to Scott Peters, managing director at The Jordan Edmiston Group. "Profitability always matters, especially in regional titles where they don’t have as much back office and operational synergies with a buyer as special interest or national titles."