October 11, 2012
WELL, IT IS THE 21st CENTURY, YOU KNOW: It’s Time People Realized That The Drudge Report Is A Major Media Property Worth Hundreds Of Millions Of Dollars:
In short, the Drudge Report is almost as big a digital media property as The New York Times.
That’s absolutely staggering.
Because The New York Times is produced by ~1,200 journalists. The Drudge Report is produced by one.
And how about economics?
Economically, The Drudge Report is much smaller than The New York Times. But that’s in part by design. And, importantly, The Drudge Report is likely highly profitable, which is not something that can always be said for The New York Times.
The Drudge Report doesn’t have a salesforce. It works with a firm called Intermarkets to sell the ad units on its pages. The Drudge Report contains general news, often with a political slant, which means The Drudge Report likely gets relatively low revenue-per-page. (Say, $1.50 per 1000 pages). But The Drudge Report has a lot of pageviews.
Assuming The Drudge Report gets $1.50 per 1000 pages and has 1 billion pageviews per month, The Drudge Report should be generating revenue of $15-$20 million a year.
That doesn’t sound like much, but, importantly, Drudge has very low tech, editorial, and sales costs.
So almost all of that is profit.
Assuming The Drudge Report pays the full corporate tax rate on those earnings, the business probably generates $10-$15 million of after-tax profit per year.
So, how much is The Drudge Report worth?
Media properties generally trade at a 15x-25x multiple of earnings, or a 4x-5x multiple of revenue, depending on the growth rate of the business and the level of profitability.
A range of 15x-25x earnings for the current incarnation of The Drudge Report, therefore, would produce an estimated value of $150 million to $375 million.
Plus the sustainable distribution method the Drudge Report uses to transmit its news is much healthier for the environment than the Times’ FDR-era legacy approach.