TCO Case Final (PDF)

The Company
Jason Kaplan, Quinn Chatham, Raphael Ortiz
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Agenda
I. Executive Summary

II. Company Profile
III. Industry Trends
IV. Valuation

V. Potential Buyers
VI. Social Media Damages

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I. Executive Summary

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Executive Summary
Industry Overview

Company Profile

The Company operates in the newspaper publishing and distributing segment, which focuses on the distribution
and publishing of regional and national newspapers.

The Company is a newspaper publishing and distributing company that operates the LA Tribune, a Southern
California regional newspaper.

Valuation

Discounted Cash Flows, Precedent Transactions and Comparable Company Analysis models lead to a valuation
range of $364.11 to $538.93mm.

Potential Buyers

We recommend a strategic buyer for TCO because of the potential synergy opportunities from this sale, and the
premium price. Facebook and Comcast are our potential strategic buyers, because of their current foothold in the
entertainment, media, news and social media industry.

Damages

Total lost operating profit from 2014 to 2016 from advertising and subscriptions was $267.727mm due to the “First
Click Free” policies of Facebook and Google.

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II. Company Profile

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Company Profile
Business Description

Print & Digital Subscriptions

The Company (TCO) is a newspaper publishing
company which provides a daily and Sunday newspaper
under the LA tribune and operates the LAtribune.com,
which features full editorial text from the LA Tribune as
well as original text, video content and other interactive
features.

Organizational Structure

Print

Digital

1200

400

650

750

1500

1250

1250

1200

2014

2015

2016

2017*

Financial
Performance
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title style
$1,000,000
Revenue

TCO Co.

EBIDTA

Net Income

$950,000
$900,000
$850,000

$800,000

LA Tribune

LAtribune.com

$750,000
$700,000
2014

2015

2016

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Revenue Breakdown
TCO Co. Revenue Streams

Circulation & Advertising
Weekday

Print
Circulation

$600,000

$500,000

Sunday

$400,000

Digital
$300,000

Total
Revenue

Print
$200,000

Display
Advertising

Digital
Classifieds

$100,000

$2014

2015

2016

2017

Circulation

2018

2019

2020

2021

Advertising

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SWOT Analysis
Strengths

Weaknesses

• Growing digital subscriptions

• Print subscriptions are declining

• Strong reputation for journalistic excellence

• Decreasing print advertising revenue

• Dominant regional presence in greater Los
Angeles area, but also is the 4th most
circulated newspaper nationwide

• Print production overhead

Opportunities
• Monetizing new digital consumer profiles
• Smart phone user adoption of new digital
media

• Younger generation’s adversity to old forms of
media

Threats
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• Growing number of competitors in the media
industry

• Tailwinds from recent election cycle

• Social media damages from free article
distribution

• Pivoting to a digitally focused business model

• Top talent going to digital only publishing firms

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III. Industry Trends

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