This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Newspaper Dealmaking Heats Up as Newcastle Aims to Spend $1B

Stocks in this article: GHSE GCI TRBAA NCT

NEW YORK ( TheStreet) - Phil Murray, a partner at the pre-eminent newspaper advisory firm Dirks, Van Essen & Murray, based in Santa Fe, N.M., says mergers and acquisitions among print legacy businesses remain vibrant even if volume has declined in recent years.

Murray, a former journalist, was talking about the future of newspaper dealmaking after Wes Edens, Chairman of Newcastle Investment Corp. (NCT), a health care real estate investment trust and affiliate of the private-equity firm Fortress Investment Group, said last week that his company is prepared to spend as much as $1 billion aggregating small and medium-sized newspapers into New Media, the working name of the entity that will combine Fortress's Gatehouse Media (GHSE) with the publications that Newcastle acquired last week from News Corp.'s (GHSE) Dow Jones Local Media Group.

"There is sufficient deal flow for GateHouse/Newcastle to spend $1 billion if they want to," Murray said, in a phone interview from Santa Fe.

Gatehouse, which has $1.2 billion in debts, said it plans to file a "pre-packaged bankruptcy" this week with creditor support.

"That wouldn't have been a lot six years ago, but one billion dollars buys you a lot of newspapers now," Murray added. "A lot of newspaper dealmaking is driven by building larger, regional clusters that make it more attractive to sell larger advertisers on a digital footprint. The Dow Jones papers fit pretty well with what they've already got."

So far in 2013, newspaper mergers and acquisitions have totaled $635 million, just about even with all of 2012 when deal volume reached $643 million, according to data compiled by Dirks, Van Essen & Murray. Of course, Jeff Bezos' purchase of Washington Post's (WPO) namesake publication pads that number. In 2011, newspaper M&A hit $789 million, a gigantic rebound from 2010 when dealmaking totaled just $149 million.

Those were all down years compared to life before the 2008 recession, when newspaper deals totaled $2 billion to $3 billion per year, Murray added. M&A activity in the industry skyrocketed to a record $20 billion in 2007, that year of drunken-spending when Sam Zell overpaid to take Tribune (TRBAA) private and Rupert Murdoch succeeded in fulfilling his dream to own The Wall Street Journal when News Corp. (NWSA) paid top-dollar to take control of Dow Jones Co. In that same year, Gatehouse bought a handful of newspapers from Gannett (GCI ).

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs