The 107-year-old Hollywood trade magazine has finally been sold, to the publisher who owns competing Deadline.com. The reported $25-million price tag has been called a "fire sale."
After months of negotiation, Variety finally sold to Jay Penske's PMC, for a reported $25 million. That is more than four times the iconic entertainment trade publication's anticipated 2012 profit of $6 million. On the one hand, Penske, a budding media mogul, adds a major name brand to his stable, which also includes Deadline and Movieline. On the other, Variety is a big-time turnaround challenge, with yearly revenues that have been chopped in half since 2006. Former owner Reed Elsevier had been interesting in getting rid of it for a while.
You have questions. We have answers.
Q: Who is Jay Penske?
A: He's the son of Roger Penske, an American auto-racing and auto-entpreneurship legend. The 33-year-old has been assembling a minor media empire under the Penske Media Corp. umbrella, including the aforementioned Hollywood/entertainment websites, as well as auto site OnCars (the apple doesn't fall far from the tree) and Engadget/Gizmodo gadget-website competitor BGR. He also owns an IndyCar racing team, Dragon Racing — and he and his brother had a little trouble with the law on Nantucket island over the summer. He became the top bidder late last month when billionaire businessman Ron Burkle and Avenue Capital, a hedge fund, both balked at the $25 million asking price.
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Former chairman and CEO of MF Global and former New Jersey Governor Jon Corzine testifies during a hearing before the Oversight and Investigations Subcommittee of the House Financial Services Committee.
A couple of pieces of breaking business news, one from Hollywood and one from Wall Street. Reed Business Information just announced that it's going to sell Variety; and Jon Corzine — former head of Goldman Sachs, U.S. Senator, and Governor of New Jersey — may have broken securities laws as CEO of MF Global and perjured himself before Congress.
Not a lot to say about Variety, just get ready for all the inside jokes about Reed "ankling" the century-old trade. The Wrap wastes no time in, um... Celebrating?
[Variety] has been challenged by digital upstarts like TheWrap and the Deadline blog. It has also faced greater competition from long-time rival The Hollywood Reporter, which relaunched its website and folded its daily print editions, launching a glossy weekly in its stead.
The larger point is worth noting, of course: ad dollars are moving away from print to digital. However, the profits from digital aren't enough to make up the losses, so it's tougher for companies to maintain both print and digital editions — or hang onto the brands at all.