OPINION: There is much hope for an economic upturn

Feb 1, 2025

KEVIN KAMEN
President/CEO | Kamen & Co. Group Services LLC

It is a new Washington, D.C., and President Donald Trump, now inaugurated, is in charge after having won the seven swing states and the popular vote back in November. I hope that America starts to unite from the turmoil of the recent past. We must think about what we all have in common and strive to achieve success by coupling our ideas, energy and compassion to help others together as one force.

Our country is facing serious issues, and folks are struggling. The cost of eggs is already at $7 a dozen on Long Island, and feeding a family is extraordinarily expensive.

Something needs to happen in the way of an adjustment at the supermarket, whether in Tampa, Florida, Uniondale, New York, Tempe, Arizona, or Topeka, Kansas.

The cost of a college education annually at Gettysburg College in Pennsylvania is $81,960; at Boston University in Massachusetts, it averages $86,363; at Arizona State University, it is $33,270; and at Clemson University in South Carolina, it is $35,338. This is nearly cost-prohibitive and must be addressed. Education is expensive because of several factors, and our future depends upon it.

Our youth need to receive a college diploma and must become highly trained and skilled to help take us to new heights. We all must do what we can to make this world and nation a better place to live — and more cost-effective for people of all backgrounds and ages.

There is so much happening within the financial markets presently — and it will impact each of us, particularly within the multimedia sector.

Last month, with the U.S. economy struggling, the Feds under the leadership of Chair Jerome Powell cut rates 25 basis points to the 4.25%-4.50% range, and it projects to again cut interest rates a half percentage point by the end of this year.

The logic stated by officials is the decent labor market and the recent decline in lowering inflation, although truth be told, inflation has started to once again climb up, and as of January 15, 2025, was at 2.9%. One month prior it was 2.6%.

This time last year, inflation was averaging 4.1, which caused interest rates to steadily jump. This is an excellent time to consider investing in acquiring a newspaper or magazine entity — and/or selling. With interest rates falling for the most part and President-elect Donald Trump now in control, there is much hope for an economic upturn and growth activity with the expected expansion of GDP, the standard measure of the value of all goods and services produced within the U.S. during a specified period.

The U.S. Real GDP is at a current level of 23.40T, up from 23.22T last quarter and up from 22.78T one year ago. For the record, the GDP is calculated by adding the gross value of a high percentage of U.S.-operated producers within the economy, plus product taxes, minus subsidies.

It is important to understand the GDP is used primarily to measure the economic health of a country.

Frankly, you might want to contemplate selling your business at this time or, at minimum, investing your monies in discovering the real value of your publication.
With a fresh calendar year in front of us, and the divergence in tone between the Fed and the Bank of England and Bank of Japan so hopeful of U.S. growth and inflation being stronger than in other parts of the world now that we are into 2025, the silver lining is to be prudent but sensitive to not sitting idle and putting things off.

Timing is most significant at this moment in time. If you have considered retiring or selling in the recent past, now would be a smart time to receive an independent financial valuation of your enterprise that could serve as a guide for your next steps. Be judicious and sensible. Borrowing monies for all will become cheaper, and investors will shortly resume eyeing acquisitions that present both growth opportunities and strategic advantages for their multimedia conglomerates. The dynamics at play are real; it will remain challenging when it comes to owning/operating a multimedia entity. The GOP has won the U.S. Senate. The U.S. House of Representatives remains under Republican control, too. People want to get the economy back on track, and things will certainly change soon. The current rate of inflation is at 2.9%, and the U.S. unemployment rate is 4.1% compared to 3.70% in November, when there were 7.01 million unemployed. A year ago, there were 6.3 million unemployed. It is now 23% more expensive for nearly everything since the pandemic-induced recession of February 2020. The economic chills of a recent presidential election campaign, high inflation and several international wars are playing a role in how our country meets the daily challenges of containing costs and confronting international discord. Washington, D.C., and California have the highest rate of unemployment, and this was before the horrendous fires taking hold in Los Angeles. Nevada, Illinois and Puerto Rico have extremely high unemployment as of this date.

Flexibility matters!! Supply chain issues, threats of employee strikes over wages — and overall climate change impacted by hurricane season — all continue pointing to a chaotic future, not to mention all the wars taking place across the globe. The average mortgage loan rates as of January 2025 are at 7.04% for a 30-year fixed and 6.27% for a 15-year fixed in California. The average 10-year ARM is 6.95%. Although interest rates are decreasing for investors, the financial sector is charging a fortune to lend money, and we are seeing mortgage rates climb — and this is wrong.

As a publishing company executive or key partner in your ownership group, pay attention to the details and respect the present scenario by closely monitoring your print, paper stock, staffing and operational expenses across the board. This is no time to invest in property acquisitions; if you want to re-sign a lease for office space, keep it limited in years. If there were to be a financial crash, as some have projected, much will go up in smoke — and quickly. Never forget the October 19, 1987, stock market crash. Analytics are important to focus on. The presidential election results have dramatically impacted the stock market, nearly everything associated with government spending, the Fed’s adjusting of rates, and the overall cost of operating a media organization. Now is the time to harden your thoughts on taking aggressive cost-cutting measures at your media entity. Consolidate staff, lease less office space and, if necessary, streamline your circulation penetration. Possibly cut back on printing as many editions and supplements as you generally produce. Focus on sales and generating more cash for your business. Invest in digital and think podcasts, apps and social media platforms for ascertaining additional attention and growing your business in a challenging market.

Restructuring is required in trying times, and securing a fresh 2025 multimedia business plan and/or financial valuation will certainly illustrate how best to economize and make your business more profitable and attractive. The devastation caused by the two 2024 hurricanes in Florida, Georgia and the Carolinas will impact the U.S. economy for years, as will the recent January 2025 fires in LA. Slicing away sections of your editorial content is always a difficult choice to make, so I recommend taking a step back initially, calling my office in New York for independent, professional guidance, and permitting our talented team to confidentially assist you with creativity and expertise. Now is not the time to look the other way. The cost of doing business each day will continue to soar. We can make a difference for you.

Be proactive, sensible and efficient. We are here to assist and want to be there for you! Do not hesitate to reach out. Confidentially helping media executives is what we do best!

Kevin Kamen is proud to be the expert media financial valuation resource for the Forbes 400 List of America's richest people 10 straight years. Email info@kamengroup.com