Brokers say it's doubtful this year's transaction level will come close to last year's. And while the slowing economy may temper transaction prices, buyers are still willing to pay high prices for valuable papers, says Wrubel, who expects that dailies will continue to fetch prices in the range of 11 to 14 times cash flow. The next person to head the Federal Communications Commission will help determine the changing face of media ownership. Under the leading contender, Michael Powell, the agency is likely to favor relaxing the ban that prevents newspapers from buying broadcast stations in their markets. Such a shift could drive consolidation in the coming months, as companies seek to acquire multiple media in many markets that they can cross-sell to advertisers while achieving cost savings through scale.
Analysts also expect a proposed accounting rule change to spur acquisitions.
A tentative ruling by the Financial Accounting Standards Board would remove a disincentive that now penalizes public newspaper companies when they make acquisitions and may make them more palatable to investors. Scripps and other public newspaper companies that are family- controlled deny they're interested in selling. But, at some point, families frustrated with their company's stock price could decide to take advantage of the high prices paid for properties and cash out. After the Chandler family shocked the industry by selling Times Mirror, anything seems possible. President Bush, with bipartisan support, is expected to seek a repeal of the estate tax, which has been a factor in the sales of some family-owned newspaper companies.