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The LinkUp Blog The Industry's Best-Kept Secret

April 27, 2007 / Toby Dayton

Is The Star Tribune Undermining Dolan Media’s Future IPO?

In today’s Star Tribune, it was reported on the front page of the business section that Dolan Media, a publisher of business, court, and commercial publications around the country, had filed a registration statement with the SEC for an initial public offering of its stock. This is the first such filing for a Minnesota-based company this year and stands as a noteworthy local story. Unfortunately, the Star Tribune business writer painted a fairly negative impression of Dolan Media in reporting the company’s historical financials. The story reported that the Dolan’s advertising revenue had risen in the 2006 despite overall declines in the industry, but then reported that the company lost $14 million in 2006. While this is technically correct, the company generated $21.6 million of operating income in 2006 ($23.2 million pro forma), and $28.7 million in EBITDA. The story did not include these numbers, nor did it explain that the company’s losses were largely incurred due to non-cash interest expense related to redeemable preferred stock.

Granted, not everyone reading the daily paper has an MBA and is familiar with technical financial reporting, but the story could have easily reported that the company generated significant income from operations and possesses attractive EBITDA margins. Whether or not the information was omitted because Dolan competes to some degree with the Star Tribune or because the business writer didn’t take the time to read the S-1 or wasn’t interested in providing a more thorough and accurate picture of Dolan’s financial health for whatever reason, the fact remains that the story was only partially reported and biased to some degree against Dolan Media. The business section of the daily paper should do a better job in its reporting.

[tags]Dolan Media, Star Tribune, Daily Newspapers, Business Reporting, IPO, Media, Publishing, Niche Publications, Alternative Advertising[/tags]