We’ve heard the chatter about the New York Times Company (NYSE: NYT) possibly selling About.com … let’s start by admitting that what makes sense to me and what makes sense to the people running the New York Times Company doesn’t always dovetail. That said, it’s hard to find any scenario, save an amazing offer, that would make a sale of About.com seem like a close-to-sensible move for NYTCo at this point. Just a few reasons:
– About.com is the growth story for the company right now. A sale would give up the only true source of cash growth.
– A sale now wouldn’t come close to multiples that make sense; NYTCo might be lucky to get 10-12x multiples in this environment. About.com is on track for $60 million EBITDA this year. Subtract the debt, etc., and the company would come away with precious little.
– NYTCo has stressed at every turn its commitment to increasing the amount of its revenues that come from digital. An NYTCo spokeswoman responded to my query with the usual “we don’t comment on rumors concerning potential acquisitions and divestitures.”
– If it’s for sale, that news hasn’t reached some of those most likely to be in the bidding.
– As far as I can tell, the company isn’t close to the kind of situation that would require a fire sale of About.
What would make sense? How about selling the company’s 17.5 percent stake in New England Sports Ventures LLC, the company that owns the Boston Red Sox? (Maybe they could toss in the Boston Globe.) That’s one way to raise cash — and slough off an investment criticized as a distraction.