Is The Huffington Post Worth More Than Your Newspaper? (LEE)
The funding means Arianna Huffington's news blog is now considered more valuable by its backers than quite a few publicly traded newspaper companies, such as Lee Enterprises (LEE), owner of the St. Louis Post-Dispatch and 52 other papers (market cap: $36 million), A.H. Belo (AHC), owner of the Dallas Morning News and the Providence Journal (market cap: $35 million), and Media General (MEG), owner of the Tampa Tribune and Richmond Times-Dispatch (market cap: $34.6 million). It puts Huffington Post in the same league as McClatchy Corp. (MNI), owner of the Sacramento Bee, Miami Herald and 28 other dailies (market cap: $150 million).
Update: Learmonth didn't inlude debt or cash in his back-of-the-envelope analysis -- and newspapers have lots of the former -- so these valuations aren't exact, but still give you the general picture.
See Also:
Newspapers Prepare To Make Savage Cost Cuts (NYT)
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Longer answer: You have to include debt in the figures for the newspaper companies. Lee's equity may only be worth 35mm, but I assume they also have a mountain of debt. To figure out enterprise value, Michael needs to add the debt to equity and subtract cash.
But I also think Huffington Post does show the potential that some newspapers could be sitting on. These newspapers have exceptionally strong brands, customer and reader relationships.
To get there they will have to align their print costs with the new reality and get more aggressive about on online growth.
Here's the issue. The Huffington Post has to create a ton of inventory and master local ad sales to have the same competencies as any newspaper company. I have not written about huffpo, but they deserve huge credit for their valuation. But I looked a their latest quantcast numbers and was not surprised to see the post-election deterioration continue. To me the bet on HuffPo, is will the country stay engaged in politics beyond the election. If not, it will take quite a while to grow into the 500mm minimum opportunity that Oak and Softbank will seek.
Aaron
The "Huffington Post" is something you only do with your mistress!