Mark Hauser on Why Private Equity Firms are Buying Newspaper Stocks
The newspaper industry has seen a lot of change over the past decade. With a shift towards digital, many newspapers have been forced to adapt or fold. However, this is not stopping private equity firms from investing in newspaper stocks. Mark Hauser, CEO of one of these firms, reveals why these investors are so interested in the industry and why it’s still worth their time and money.
Why are private equity firms investing in the newspaper industry?
The most significant reason private equity firms invest in newspaper stocks is that they believe it’s still possible to make money from newspapers. This is even though the industry is well past its prime.Some investors also believe it’s a good investment because newspapers can be transitioned from printed paper to digital media.
Mark Hauser also notes that newspapers are more than just a way to get ad revenue as they tend to have political influence as well. He believes this influence will help them generate more revenue moving forward and eventually break even on their investments.
What is happening to newspapers?
Hauser explains that “The newspaper industry has declined for the last decade.” The main reason for this decline is the shift to digital. Newspapers have struggled to maintain their readership as people turn to websites, blogs, and social media for their news and reading material. However, private equity firms are looking past these struggles and seeing the merits of investing in newspapers stocks.
Private equity firms have invested in newspaper stocks all over the world. As a result, they nearly quadrupled their investment by selling it off to NBCUniversal.
Mark Hauser says that private equity firms are still interested in investing in newspaper stocks because “our investments can create significant value for shareholders of our portfolio companies, which include public and private companies globally across diverse industries.”
How can investors make money from this shift?
The most important thing for an investor to do when investing in any company is to understand the risk and opportunity. With newspapers, the risk is that this industry will decline, and there will be no return on investment. However, if the industry does not suffer as much with a shift towards digital, there are many opportunities for investors.
One of these opportunities is the possibility of buying regional newspapers at a low price because they are starting to lose their circulation and readership from traditional advertising. If you purchase these newspapers at a low price and turn them around, you can make an excellent return on your investment. Another opportunity is digital advertising through companies like Facebook or Google leading the way in this space. These companies are doing well and could offer an excellent return on investment for those who invest in newspaper stocks.
Newspapers are a dying industry, says Mark Hauser, but private equity firms see opportunity.