Why did someone pay a hefty $122M for a struggling Venezuelan newspaper?
El Universal was valued between $20 million and $35 million, but $122 million was an offer the owner couldn't refuse. Some wonder if the buyer has government ties.
Numbers say a lot. And the $122 million price tag for Venezuelan daily El Universal says that the seller was made an offer he couldn’t refuse.
The 105-year-old newspaper had some $4 million in newsprint debt and was only valued at $20 million to $35 million, according to The Wall Street Journal. Consider as well that major US daily The Washington Post sold for hardly more than twice that, at $250 million, less than a year ago to Amazon.com owner Jeff Bezos, a billionaire with spare cash to spend on risky investments.
The buyer of El Universal from the owning Mata family, however, was a relatively unknown Spanish holding company called Epalisticia with unclear reasons for investing in Venezuelan media, especially given newsprint shortages and political pressures on independent media from the ruling Socialist party. High inflation and a scarcity of US dollars has caused shortages of anything from basic goods to airline flights – Delta Airlines this week announced it would reduce service to Venezuela by 85 percent starting next month, following a similar move by American Airlines.
So why would Epalisticia pay such a price? Immediate speculation is that the Spanish firm has government ties and that the Mata family was pressured to succumb to the same fate as two other Venezuelan media companies over the last year. The ownership changes at independent TV news channel Globovisión and respected afternoon paper Últimas Noticias led immediately to less critical coverage of the government. In the case of Globovision, the buyer was later revealed to have government ties.
“Both changed hands in ownership and softened their editorial line against the government,” says our correspondent in the capital of Caracas, adding that many Venezuelan journalists are expressing concern that the same fate awaits El Universal. “The space for media criticism in Venezuela is shrinking.”
Earlier this year during the heat of antigovernment protests, President Nicolás Maduro accused El Universal of seeking to overthrow his government, continuing the tradition of his predecessor Hugo Chávez in attacking free media.... For the rest of the story, continue reading at our new business publication Monitor Global Outlook.