LONDON, June 8 (Reuters Breakingviews) – There’s a profound similarity between selling a sports team and selling a newspaper. Both businesses appeal to deep-pocketed buyers seeking influence or prestige. That’s the only way to explain a possible 600 million pound ($748 million) price tag for the Britain’s Telegraph Media Group (TMG).
The company, which owns the Daily and Sunday Telegraph newspapers as well as the Spectator magazine, may be up for sale because its parent group has failed to repay about 1 billion pounds of debt owed to Lloyds Banking Group (LLOY.L). Britain’s biggest lender appointed AlixPartners as receivers to recover some value, which could involve auctioning off the influential right-of-centre titles.
The good news for Lloyds is that TMG, run by Nick Hugh, has recently been profitable and growing. Revenues rose 4% in the most recently reported financial year, which ended in January 2022. EBITDA hit 40 million pounds, up 5%, based on UK filings, while borrowings were minimal. The debt load behind the Lloyds spat sits at the parent company of the Barclay family, the group’s long-time owners. Sir Frederick Barclay and his late brother David bought the titles almost two decades ago.
Lloyds reckons the price tag could be as high as 600 million pounds, according to media reports. That’s hard to justify. Assume revenue kept rising at 4% last year, as it did in the previous one, and TMG would have had a top line of 255 million pounds in the financial year ending in January 2023. Listed peer Reach (RCH.L), owner of the Daily Mirror and other UK newspapers, trades at 0.4 times 2022 revenue. On that basis, TMG’s value including debt would be just over 100 million pounds. Granted, Reach is shrinking while the Telegraph’s digital subscription business offers the chance for continued growth.
Lloyds and AlixPartners will no doubt make a different valuation case. It helps that they have precedent in recent sales of well-known media brands. Japanese media group Nikkei bought the Financial Times in 2015 for 2.5 times the previous year’s revenue. Exor (EXOR.AS), the investment vehicle of Italy’s Agnelli clan, bought a stake in the Economist Group for 14 times trailing EBITDA, Breakingviews calculated. Both figures would imply a roughly 600 million pound enterprise value for TMG, assuming that the top line grew 4% last year and that the EBITDA margin held steady.
The upshot is that an influence-seeking billionaire, perhaps one seeking visibility in the Conservative Party, could find a way to justify the asking price – even if it seems a stretch on purely financial grounds.
Follow @pamela_msg on Twitter
CONTEXT NEWS
Receivers chosen by Lloyds Banking Group could put the Telegraph Media Group up for sale after its Bermuda-based parent company B.UK failed to repay bank loans. B.UK’s receiver is AlixPartners.
An auction process for the Telegraph newspapers and the Spectator magazine could kick off within days and value the assets at about 600 million pounds, Sky News reported on June 7.
(The author is a Reuters Breakingviews columnist. The opinions expressed are her own.)
Editing by Liam Proud and Oliver Taslic
Our Standards: The Thomson Reuters Trust Principles.
Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
Telegraph’s $750 million price implies vanity contest
- Advertisment - 
Recent Comments
on Iowa State starting RB Jirehl Brock among latest college football players charged in gambling probe
on The Rev. Al Sharpton to lead protest after Florida governor’s ban of African American studies course
on Sports World Hails ‘Superwoman’ Lindsey Vonn for Her Grand Comeback Despite Career-Changing Injury
on San Mateo County Community College District sues five companies over role in ‘pay to play’ scandal
on Saipan, placid island setting for Assange’s last battle, is briefly mobbed – and bemused by the fuss
on ‘Pokémon Scarlet’ and ‘Violet’ Fan Theories Suggest Legendary Time Travel, Alternate Dimension Plot
on Joe Manchin and Tommy Tuberville introduce bill on name, image and likeness rules for college sports
on Inside the Michael Jordan ‘Air’ movie, plus why NFL, others are buying into the sports film industry
on If you’re a frequent traveler, these wrap tops from Aday will revolutionize your on-the-go wardrobe
on How Does Jack Nicklaus Travel? Exploring the Private Jets Owned by the ‘Golden Bear’ Over the Years
on Hollywood Reporter: Tom Cruise negotiated with movie studios over AI before the actors strike began
on Ford Blue Cruise: US regulators investigate fatal crashes involving hands-free driving technology
on Dozens of boats cruise the Seine in a rehearsal for the Paris Olympics’ opening ceremony on July 26
on Devout athletes find strength in their faith. But practicing it and elite sports can pose hurdles
on Despite strong Lunar New Year holiday data, consumer spending in China isn’t roaring back just yet
on David and Victoria Beckham so ‘Charmed’ by Tom Cruise They Have His Photos on Display at Their Home
on CONCEPT ART: New Details Revealed for Disney Cruise Line Lookout Cay at Lighthouse Point Destination
on CBS Sports announces Matt Ryan will join NFL studio show. Longtime analysts Simms and Esiason depart
on Boston College vs. Army live stream, how to watch online, CBS Sports Network channel finder, odds
on Boise State vs. Air Force live stream, odds, channel, prediction, how to watch on CBS Sports Network
on Biden to tout bill’s prescription drug prices, energy provisions in pitch to Americans, aide says
on After UFC Fallout, Conor McGregor Offers a Valuable Piece of Advice to Free Agent Francis Ngannou
on 2024 Super Bowl: CBS Sports Network and CBS Sports HQ to combine for 115 hours of weeklong coverage
on ‘Best Intention’: Chris Kirk Has Absolute Trust in Jay Monahan and PGA Tour’s Widely Debated Model
on 2023 NFL All-Rookie Team: CBS Sports draft expert, former GM unveil league’s best first-year players
on “Completely Knocked Me Out”: Rob Lowe Recalls Boxing Match With Tom Cruise On 1983 Brat Pack Classic
on CONCEPT ART: New Details Revealed for Disney Cruise Line Lookout Cay at Lighthouse Point Destination
on “Completely Knocked Me Out”: Rob Lowe Recalls Boxing Match With Tom Cruise On 1983 Brat Pack Classic
on CBS Sports announces Matt Ryan will join NFL studio show. Longtime analysts Simms and Esiason depart
on Carlos Sainz’s Soccer Fanboy Emerges as Spaniard Shares Defining Moment With This Real Madrid Legend
on Biden: ‘At this point I’m not’ planning to visit East Palestine, Ohio, after toxic train derailment
on ‘Best Intention’: Chris Kirk Has Absolute Trust in Jay Monahan and PGA Tour’s Widely Debated Model
on Ahead of big sports weekend, dispute with Disney leaves millions of cable subscribers in the dark
on A heavy wave of Russian missile attacks pounds areas across Ukraine, killing at least 4 civilians
on 2024 Super Bowl: CBS Sports Network and CBS Sports HQ to combine for 115 hours of weeklong coverage
on 2023 NFL All-Rookie Team: CBS Sports draft expert, former GM unveil league’s best first-year players
on Army vs. Coastal Carolina live stream, how to watch online, CBS Sports Network channel finder, odds
on AL Rookie of the Year Julio Rodriguez Spreads Joy and Sportsmanship to the Youth of Loma de Cabrera
on After UFC Fallout, Conor McGregor Offers a Valuable Piece of Advice to Free Agent Francis Ngannou
on Dubai International Airport sees 41.6 million passengers in first half of year, more than in 2019
on Devout athletes find strength in their faith. But practicing it and elite sports can pose hurdles
on Despite strong Lunar New Year holiday data, consumer spending in China isn’t roaring back just yet
on Dave Portnoy: Taylor Swift’s security should ‘drag Kim Kardashian to jail’ if she attends Eras Tour
on CONCEPT ART: New Details Revealed for Disney Cruise Line Lookout Cay at Lighthouse Point Destination
on “Completely Knocked Me Out”: Rob Lowe Recalls Boxing Match With Tom Cruise On 1983 Brat Pack Classic
on CBS Sports, Serie A announce new TV rights deal; Paramount+ to air over 400 Italian soccer matches
on Cam Newton’s Violent Public Incident Draws Hilarious Reaction From 3x All-Star: “Where Do I Sign Up
on Boston College vs. Army live stream, how to watch online, CBS Sports Network channel finder, odds
on Angel Reese Launches Foundation Dedicated To Empowering Women Through Sports & Financial Literacy
on A weaker dollar, skyrocketing prices and ‘record’ visitor numbers: Good luck in Europe this summer