When Paramount agreed to buy The Free Press today for a reported $150 million, it raised a simple but critical question: Why pay so much for such a small business?

The startup, which launched in 2021, is generating around $20 million in revenue, according to a person familiar with the matter. That means Paramount is paying 7.5 times revenue for the outlet.

The multiple places the deal outside normal media economics, according to interviews with four digital media M&A experts. In most transactions, both legacy and digital outlets trade at five to 15 times EBITDA, not revenue.

But for Paramount, the tie-up is more of a strategic decision than a strictly financial one, according to the analysts.

The company is not buying The Free Press for its profit stream today. Instead, it is making an

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