News & Events
FOR IMMEDIATE RELEASE
MEDIA WEBSITES PROVE SIGNIFICANT VALUE FOR THEIR OPERATIONS –
FROM $15 TO $450 MILLION – ACCORDING TO A NEW REPORT BY BIA FINANCIAL NETWORK
AND BORRELL ASSOCIATES
Local TV & Radio Websites
Will Be the Next Largest Growth Sector in Online Advertising
CHANTILLY,
VA., – September 17, 2008
– Although websites owned by newspapers are typically more developed than radio
and television and have greater value at present, local radio and television
stations are positioned for rapid growth over the next few years, resulting in
strong multiples for their website values, according to a new report, “What’s a
Website Worth? Valuation Metrics for Local Websites.” Issued today by BIA
Financial Network, a leading financial and strategic advisory firm serving the
media and communications industries, and Borrell
Associates, a leading local advertising research firm, the report focuses
on the growth of newspapers, television and radio stations, and local
“pure-play” and provides a range of metrics that assist in determining values
for these websites. The report also discusses the factors unique to web
operations that will an impact in the future.
The analysis concludes that local websites hold significant value
for their owners, especially if they’ve invested in a way that positions them
for growth in high-demand advertising categories such as e-mail, streaming video
and paid search. The uppermost value of some of these local newspaper websites
was between $300-450 million, and the values for the largest-grossing radio
websites were seeing values in the $15-20 million range.
Credit: BIA Financial Network and Borrell Associates
The median value of a local
website varies by what type of company runs it, and its growth potential.
Newspaper sites have higher values because of higher revenues, but TV, pure-play
and radio sites gain some lift because of greater growth potential. The chart
represents 2007 estimates.
In 2008, the oldest newspaper, radio, TV and “city.com” websites
turned 14-years-old, evolving from interesting experiments to financial saviors
for their parent organizations. With many sites generating millions in revenue
and profits and delivering a strong potential for continued growth, there is
speculation and interest in how these sites should be valued and the
opportunities they will bring to their parent companies.
“Obviously,
there are fundamental changes taking place in the value of media properties,
with the value of their websites becoming more meaningful as a percent of total
value,” said Mark Fratrik, VP of BIAfn. “Given their growth potential,
the value multiples of media websites may be 2 to 4 times that of the core
business.”
According to
Gordon Borrell, CEO of Borrell Associates, “Websites associated with traditional
media companies benefit from promotion and content cost synergies as well as
opportunities to up-sell to existing customers. As a result, their cash flow
margins are robust – in most cases much higher than their parents’.”
The report
also provides value magnifiers for websites, which include market penetration,
sales organizations, revenue sources, media leverage, performance benchmarketing,
and URL valuation.
“What’s a
Website Worth? Valuation Metrics for Local Websites”
is available for online purchase at:
http://www.borrellassociates.com/reportDetails.aspx?prodID=120
For more
information, call 800.331.5086 or email
info@bia.com.
# # #
About BIA Financial Network,
Inc.,
BIA Financial Network, Inc.
(BIAfn)
has served the media and communications industries for more than two decades
with financial and strategic advisory services, as well as a comprehensive array
of research and investment resources. In addition to providing competitive and
comparative information and analysis, BIAfn
is also the nation’s leading communications appraisal and valuation firm. Its
affiliated company, BIA Capital Strategies, provides merger and acquisition
advice, and arranges equity and debt funding. BIA Digital Partners LP provides
subordinated debt and preferred equity investments to medium stage
communications companies. Additional information is available at
www.bia.com
About
Borrell Associates
Borrell
Associates is the leading provider of local advertising research, data and
strategic analysis. The company has offices in Williamsburg, Va., and Seattle,
Wash., and provides detailed market advertising reports for hundreds of local
media companies, including WebAudit™, Local Ad $pending™ (LA$R™) and customized
reports for any U.S., Canadian or U.K. market. For more information, visit
www.borrellassociates.com.
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