The plummeting value of newspapers

Now there’s a second huge writedown of the value of a recent newspaper purchase.

* Lee and the St. Louis Post-Dispatch, from Paid Content:

Back in March, newspaper publisher Lee Enterprises (NYSE: LEE) warned that it would take a $500-$700 million non-cash hit related to its $1.4 billion purchase of Pulitzer in 2005. We’d wondered previously when that would happen, given that all of the other newspaper deals have resulted in major writedowns. In a 10-Q filing (via AP) last night, the company confirmed that it had written down $721.9 million worth of goodwill related to that deal. It also warned that the final numbers aren’t set in stone, and could still change considerably.

* Earlier, the Minneapolis Star Tribune was written down twice: McClatchy had bought the paper for $1.2 billion and took a bath when it sold the orphan for $530 million and now the purchaser, Avista, has written that down by 75 percent. By my calculation, that’s a drop from $1.2 billion to $130 million — essentially a drop to 10 percent of its value only a decade ago.

And it’s not as if anyone is going to see that the price is so low it’s worth buying a paper now. Only a fool will do that. Witness Cablevision and Newsday.