There was an ASX release yesterday announcing the sale of Morrison Media to radio and sports publisher, Pacific Star Network. Morrison was paid $10.8 million in cash for the titles including Surfing Life, White Horses, Smith Journal, Frankie and more. This represents a multiple of 4.9 times on earnings which in the most recent year were $2.2 million for Morrison.
From the outside it looks like Frankie is the star performer for the group with the most recent audit figures I can find (July – Dec ’13) showing a circulation of 63,645. None of the other titles are shown in the audit (tells you something on its own) but from what I know, the main surf title, Surfing Life, is easily well under half that figure, Smith hasn’t had the traction of Frankie, and White Horses is targeted at a super niche.
Morrison’s hookup with Frankie was genius – the title has ridden a fad from the ground floor to saturation and dominated the competition over that time. And the timing of the sale is perfect for Morisson where I think the growth potential with the audience it now has is limited. In other words, he has moved the title out right at the top of its game. Great work.
The future will be interesting for Surfing Life. There doesn’t seem to be a natural link between the properties of Pacific Star where they can leverage the existing sales infrastructure and there’s no digital expertise at PSN to help build the properties. Not that we always nail it here but when you look at the images and videos in this post, I kinda think they could do with a little guidance. Print sales aren’t growing and I’m not sure that digital revenue is yet to replace that lost cover price. Having said that, they might have a plan to really get the mag to break out?
You can read the ASX announcement over here.