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Media Sector Has Its Bright Spots

May 13, 2009 07:00 PM
by Anne Szustek
Print media is certainly struggling to find its way at the moment. Yet despite the industry’s troubles, investors see promise within the segment.

Newspaper Stocks Doing Well (?!?)

Rick Edmonds, a business analyst for the Poynter Institute, reports that as of Monday, nine newspaper stocks traded on Wall Street were up as much as four times from their three-month lows. Among the rebounders are The New York Times; Gannett, the parent company of USA Today and several regional newspapers; and Journal Communications, owner of the Milwaukee Journal-Sentinel. Taking care to outline the risks inherent in investing in these stocks, Edmonds writes that an overall economic recovery will likely boost newspaper companies’ shares “for a window of several years.”

The New York Times Could Be the Latest Hit for Geffen

David Geffen also sees long-term hope for The New York Times, as evidenced by the Brooklyn native's recent bid for a 20 percent stake in his hometown paper. Wall Street Journal sources said that the record executive and DreamWorks co-founder voiced his willingness to buy up Harbinger Capital Partners’ NYT holdings at market value, estimated at less than $200 million.

Harbinger did not take Geffen up on the offer, as per BusinessWeek and Wall Street Journal sources, although BusinessWeek's Los Angeles bureau chief Ron Grover writes that his source said the capital firm “hasn’t made a decision concerning The New York Times.” He goes on to write, however, that while Geffen "famously refuses to over-pay," his “bet is that he and the Harbinger folks are likely still talking, or that they will before too long.”

Print Media Shares Are Also up Across the Atlantic

British newspaper shares have also been seeing a recent bounce. According to the Financial Times, Johnston Press, the parent company of several papers, including the Scotsman, has gone up some sixfold since March 10. Between Oct. 20 and May 8, an investment of £10,000 in Trinity Mirror, the publisher of U.K. tabloid The Daily Mirror, would have earned £134,700 as of last Friday. Overall, the All-Share Media Index on U.K. stock exchange FTSE has gone up nearly 23 percent over the past two months, not far behind the FTSE as a whole, which has gone up approximately 30 percent over the same period. David Elms, a partner at accountancy firm KPMG, told the Financial Times, “There is renewed optimism and people look to media companies to be one of the first sectors to come out of recession.”

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