So why would anyone buy a newspaper? Well, for one thing, they make money. Despite the Internet and the slowing economy, many newspapers remain highly profitable. "They still tend to have pretty strong market position in their local markets, the deepest investment in newsgathering and content of any other companies in their local area and they can monetize that with premium ad rates that have translated into good earnings and cash flow,'' said John Puchalla, a credit analyst for Moody's (nyse: MCO - news - people ). "The tough revenue environment makes it an unattractive equity story, but if you're conservatively levered, you can manage through these downturns."
Moreover, the newspaper operations of publicly traded media companies posted an average operating margin of nearly 17% in 2007, according to independent newspaper analyst John Morton. [Click for MORE]
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