When Times Publishing Co. announced in late January that it was putting Congressional Quarterly up for sale, industry observers asked the same question: Why now? With the general economy in tatters, credit frozen and most print advertising spending in free fall, there have certainly been better moments in history to sell such a widely respected brand.
CQ offers strong products in print and online that cover legislative activity on the national, state and local levels. In addition to CQ Weekly, it has CQ.com and CQ Today, a print and online newsletter. CQ President Robert Merry said the brand has produced seven straight years of double-digit revenue growth.
With the government injecting trillions of dollars into the economy, CQ appears to be covering a market that will only grow more influential in coming years. “Obviously, the problem is not CQ,” said Mark Edmiston, managing director of media investment bank AdMedia Partners. “The problem is the St. Petersburg Times. They're being forced to go out into the market.”
Times Publishing owns the St. Petersburg Times, which is part of an industry that is struggling mightily. “We're selling an asset to provide funding for the continued expansion of the newspaper in the Tampa Bay market,” said Andrew Corty, VP of Times Publishing. The company sold CQ Press, a book publishing unit, last year.
CQ has able competitors in the Economist Group's Roll Call, Atlantic Media's National Journal,
The Hill and Politico, among others, and requires investment to continue competing at a high level. “There's part of this that breaks my heart,” said Merry, who has worked at CQ since 1987 but sees the need for deeper pockets to support it.
“It's pretty clear that the challenge faced by newspapers makes it very hard for the company to find the wherewithal to make what I would consider appropriate investment in a company like Congressional Quarterly,” Merry said.
Industry observers say the timing of taking CQ to market is unfortunate. “It would be reasonable to assume that it would be valued substantially lower than it would have been last year,” Edmiston said.
“The brand is a blue-chip brand, so it's attracting a lot of attention from strategic buyers and also from some private equity funds,” said Michael Marchesano, managing director of media investment bank Jordan, Edmiston Group, which is handling the sale of CQ.
Industry observers mentioned CQ's central competitors—Economist Group and Atlantic Media—as potential buyers. (Economist Group spent $43 million last August to acquire Capitol Advantage, a provider of online grassroots tools to lobby Congress.) The Washington Post Co. and Gannett Co. were also mentioned as possible suitors.
A deal is not expected to close until summer. M