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Media Briefing: Media company matchmakers, September 2022 edition

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Media Briefing: Media company matchmakers, September 2022 edition

In this week’s Media Briefing, I cast some predictions as to which media companies will merge next and why or why not these pairings make sense in the grand scheme of the media M&A landscape.

The key hits:

  • BDG and Vice Media are looking for a new buyer, but the best solution might be to join forces.
  • Billionaire Jeff Bezos could make for a great new owner to Forbes.
  • Time isn’t done with the crypto craze just yet.

Several acquisitions came in just under the wire in the final days of summer, with Cox Enterprises buying Axios for $525 million and Time buying software licensor Brandcast for an undisclosed amount. After the M&A land grab that happened in 2021, it got me thinking: What some other media companies could combine before the year is out?

Below, I play media company matchmaker in hopes of predicting the next M&A news before it breaks.

1. BDG – Vice Media 

Both BDG and Vice Media teased going public via a special-purpose acquisition company (SPAC) last year but whether they were dissuaded by BuzzFeed’s blunderous SPAC experience or simply couldn’t scrounge up enough investment to make the deals worth doing, both companies ended those talks. It would come to no one’s surprise, though, if these publishers were still looking for opportunities to join forces with other media companies or perhaps be bought outright altogether. Why not merge the two?

From an audience perspective, the age demographics and content categories generally align. Vice Media’s acquisition of Refinery29 indicated it wanted a more female-first audience and BDG’s lifestyle group would make a nice landing place for that brand. Meanwhile, Vice’s i-D and BDG’s W Mag would be complementary forces in BDG’s efforts to go after more luxury advertisers since it acquired W in 2020. 

BDG’s culture and innovation portfolio currently consist of Gawker, Mic, Inverse and Input, but Vice (and its sub-brands Munchies and Motherboard) could easily become the marquee title within that group, if given the opportunity. And while breaking news isn’t a current focus for BDG, Vice News could serve as the entrance into this category, as well as a key player in building out social strategy and video content. 

Refinery’s 29 Rooms traveling experience has been a key part of Vice Media’s events business and as BDG looks for ways to earn live event revenue, having the ticket revenue from 29 Rooms could be beneficial considering BDG mainly relied on sponsorships to monetize that business thus far.  

On paper, I could see these brands aligning well with each other, as well as bringing additional revenue streams that the other is lacking — Vice Media’ video IP licensing and BDG’s parenting category as examples — but will these two publishers that share a desire to be acquired be OK with combining forces versus finding a new parent? 

2. The Washington Post – Forbes 

The Washington Post was famously bought by billionaire Jeff Bezos in 2013 but has since hit some rough waters in the past year, according to a report by The New York Times. But to even out the decreases in digital ad revenue (down 15% from the first half of 2021 to the first half of 2022) and falling number of paid digital subscriptions (now sub 3 million total), perhaps Bezos can buy the Post a sibling to lean on when times are tough — think The Times buying The Athletic to avoid taking hits to advertising whenever the news ebbs and flows.

The Times report this week actually said people familiar with The Post’s business heard that leadership entertained acquiring The Associated Press, The Economist and The Guardian in the past, but I think the paper would be better suited moving outside the realm of news. 

Again The Times reported earlier this month that Forbes was looking for a buyer after it, too, abandoned its SPAC plans. The price tag for the publication is at least $630 million and in 2021 it earned more than $200 million in revenue and more than $40 million in profit.  

Like The Athletic is (hopefully) doing for The Times, Forbes could help stabilize digital advertising revenues for the news-dependent publisher, meaning if there is a particularly difficult news cycle triggering a lot of blocked keywords on media buyers’ lists, the more feature-focused and magazine coverage coming out of Forbes could help win advertising dollars, versus losing out altogether. 

And if nothing else, Forbes reports on all things money and wealth and who doesn’t celebrate their billionaire status and endless piles of money more than Bezos? 

3. Time will pursue its blockchain interests

Time announced its first acquisition this week — a software licensing company Brandcast — since coming under the ownership of Marc and Lynne Benioff in 2018. Renamed to Time Sites, the platform that’s used to build custom websites, was already a pseudo-sibling to Time – Marc Benioff was an early investor, which is how the Time execs were introduced to Brandcast, reported Axios. So it begs the question, which other of Benioffs’ investments could be Time’s next purchase?

For its next acquisition, I can see Time investing in its crypto interests, as the company has been quite bullish on blockchain experimentation and NFT projects over the past year despite not being a crypto-endemic publisher. The company has earned over $10 million in profit from its NFT projects and recently built a virtual land called “TIME Square” with metaverse tech platform The Sandbox. 

Unfortunately for Time, the valuations of many blockchain tech companies may be out of budget for a legacy publisher — and even for the Benioffs themselves. The Sandbox, for example, was looking to raise $400 million at a $4 billion valuation earlier this year, per Bloomberg. But as the crypto market remains in its slump, there could be a number of smaller blockchain start-ups on the auction block that could be of interest, either for the technology or the talent. Benioff has been an investor in the blockchain in the past, with his investment firm Time Ventures being an early supporter of crypto exchange MoonPay.

And it’s not unusual that a media company would expand its business with a technology-based revenue stream. Many publishers, like Axios, The Washington Post and Vox Media, have created software-as-a-service businesses as a means of generating another recurring revenue outside of subscriptions and membership in the form of annual licenses. 

Maybe Time will go the technology route again, ensuring that the company’s primary editorial interests remain within the Time brand, but I think that the company will pursue the crypto bro audience it doesn’t currently reach with the acquisition of CoinDesk, Blockworks or Decrypt — all independent crypto finance publications who reach that exact demographic.

What we’ve heard

“After Labor Day [is] when we start getting into that fall planning season, sitting down with the client leads and our clients as well to hear what their plans are and making sure we have a roadmap, where applicable, that we have these [diverse-owned] partners included going forth in 2023. Because with a lot of the pledges and commitments that have been done over the last two years, this is really about the year of results.”

Mark Prince, svp and head of economic empowerment at Dentsu Media, on the latest episode of the Digiday Podcast

What happened to swag?

With the return of many industry and consumer-facing events put on by media companies this summer, I noticed something that didn’t seem to return in full-force: free stuff.

Pre-pandemic, the doors to events (especially the ones aimed at marketers, like the NewFronts in May) were often lined with tables laden with an assortment of branded merch, or “swag,” up for grabs – from either sponsors or the event-hosting media company. I’ve seen everything from Google Home devices to Hydro Flask thermoses. 

But this summer, many events I attended didn’t even give out a branded pen. Most NewFront events seemed to prioritize live performances or guest appearances, and only a few handed out logo-emblazoned items (though BuzzFeed notably gave out “Hot Ones” hot sauce). Reporting by Fortune and The Wall Street Journal found company execs are cracking down on swag spending as they find areas to cut costs amid the economic downturn. 

I reached out to media companies (BuzzFeed, Dotdash Meredith, Vice Media Group, Vox Media, Time and Essence) to ask what the role of merch is in their return to in-person events – especially as, from my memory, some of these publishers used to give out impressive swag pre-pandemic. But the companies stayed mum on the topic, or didn’t respond to requests for comment by publishing time.

“Not a lot of merch to be had” at events this summer, messaged Evan DeSimone, who works in tech marketing as head of content and communications at People Data Labs (and was previously on the Custom team at Digiday). Chris Harihar, partner at PR firm Crenshaw Communications, also saw less swag at the few events he attended this year. And the merch Harihar did see was “less memorable or creative,” he said, which might be because it’s more difficult to “justify spending on swag, particularly unique, pricey merch, when the market is so uncertain and soft.”

These days, swag seems to be mailed to people in a more deliberate delivery fashion, rather than handed out to the masses. Christel van der Boom, head of communications at content aggregation platform Flipboard, said in an email that the company sends out “something with our logo on it” as a way to “thank [or] acknowledge” fans of their product. “It lets them know we appreciate the ways they use Flipboard.”

“In many ways, it feels more meaningful to use swag this way instead of handing it out at a conference. In a time when people (still) don’t meet in person all that often, merch is a way to create connection,” van der Boom added.

I turned to media Twitter with a call-out during these merch-less times, and asked: What’s the best or your favorite swag item you’ve seen given out at an event?

A lot of people answered phone chargers and power banks, as well as personalized bags. Stuff with a purpose. Joni Deutsch, vp at podcast network The Podglomerate, was at the annual Podcast Movement industry event last week and left with quite the haul, including a Spotify-branded mixology set.

Free smartphones and tablets are extremely memorable for obvious reasons, but “basically just straight up bribery,” tweeted Michael Davis, vp of brand partnerships at basketball publisher Slam.

Some merch is getting a lot of use, even years later. DeSimone said he still uses a french press from a Discovery Inc. holiday party five years later. David Clinch, head of global partnerships at digital consulting firm Mather Economics, has a well-used backpack from a YouTube summit years ago that’s “a bit battered.” Harihar has a fidget toy from a 2017 Digital Trends event he thought “would be scrapped in a day but I’ve used it every workday for [five] years.” — Sara Guaglione

Numbers to know

45%: The percentage of 58 publishers in a recent Digiday+ Research study who cited direct-sold advertising as the largest portion of their revenue in summer 2022.

1200+: The number of Snap’s more than 6,400 total employees, approximately 20%, that the company plans to lay off after its stock price dipped 80% this year.

What we’ve covered

Podcasters test offering more bonus content and additional features to grow subscriptions:

  • After launching subscription podcast services last year, QCode, Tenderfoot TV, NPR and Acast are investing in their offerings by adding more shows and experimenting with the way bonus content can increase recurring revenue.
  • The number of podcasters offering a paid product is growing — as is the number willing to subscribe.

Learn more about the way publishers are adding value to their podcast businesses here

Digiday+ Research deep dive: Publishers look to capitalize as people head back to events:

  • More publishers are getting a large portion of their revenue from events than they were six months ago.
  • Meanwhile, the percentage of publishers who said none of their revenue comes from events fell from 37% to 29% over the same period.

Read more about publishers’ events businesses here.

Action Network CEO says sportsbooks are still spending big on ads, but with a conservative mindset:

  • Sports betting is one advertising category that’s still spending strong despite the economic downturn.
  • Patrick Keane, CEO of Action Network, said that conversations with sportsbooks have been primarily focused on finding the highest value sports bettor who is willing to play along an entire season. 

Learn more about how Action Network is growing sports betting ad revenue here

Digiday+ Research: Publishers look to diversify revenue streams ahead of possible recession:

  • Digiday+ Research surveyed 58 publisher professionals this summer to find out where their revenue is coming from, how their revenue streams compare with six months ago and where they’ll be focusing their business over the next six months.
  • It turns out most publishers are getting their revenue from direct-sold ads. 

Learn more about publishers’ revenue streams here.

Tastemade teams up with Blavity to create video vertical centered on Black food culture:

  • Tastemade and Blavity Inc. are teaming up to create a video vertical covering food from a young, Black perspective.
  • Content will focus on Black restaurants, chefs and food creators and will lean on Tastemade’s expertise with food content and Blavity’s predominantly young, BIPOC audience.

Learn more about the new vertical, called Sauce, here

What we’re reading

Growth stalls at The Washington Post and layoffs:

The Washington Post’s digital ad revenue fell by 15% from the first half of 2021 to the first half of 2022 and its total number of paid digital subscribers is now below 3 million, according to The New York Times. As a result, there is the possibility that the paper will cut 100 jobs be it through hiring freezes or possibly layoffs.

Netflix taps former Snap execs as it expands into ads: 

Snap’s chief business officer Jeremi Gorman and vp of sales Peter Naylor are leaving the social platform to head up Netflix’s new advertising business, according to The Hollywood Reporter.

Time makes its first acquisition under the Benioffs:

Time has purchased software licensing company Brandcast for an undisclosed amount, according to Axios. Now called Time Sites, the division focuses on creating easy-to-build marketing websites. It marks the first acquisition after Salesforce chief Marc Benioff and his wife, Lynne, purchased Time in 2018.

The Washington Post finally takes Hollywood by storm:

The Post has made a splash with several blockbusters in the past, but it hasn’t participated in the intellectual property gold rush, according to Vanity Fair, until now. The Washington, D.C.-based newspaper announced partnerships with Imagine Entertainment and Creative Artists Agency to create scripted and non-scripted film and television projects based on its archives, reporting and ongoing investigations.

Gannett’s latest layoffs leave an uncertain future for local newspapers:

Kristi Garabrandt was the only full-time news reporter at the Daily Jeffersonian until parent company Gannett issued a round of layoffs earlier this month, according to The Washington Post. Now, the paper is left with one sports reporter and freelance contributors to helm the ship.

Substack is reigning in perks for writers:

Once famous for offering writers six-figure cash advances and healthcare perks to recruit writers, Substack is now less frequently offering those upfront payments and has cut the healthcare subsidy it previously offered to some writers, according to The Information.

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NASA’s Artemis I moon mission launch, stalled by Hurricane Ian, has a new target for takeoff. The launch window for step one of NASA’s bold plan to return humans to the lunar surface now opens Nov. 12 and closes Nov. 27, the space agency said Friday. 

The news comes after the pending storm caused NASA to scrub the latest Artemis I Iaunch, which had been scheduled for Sunday, Oct. 2. As Hurricane Ian threatened to travel north across Cuba and into Florida, bringing rain and extreme winds to the launch pad’s vicinity, NASA on Monday rolled its monster Space Launch System rocket, and the Orion spacecraft it’ll propel, back indoors to the Vehicle Assembly Building at Florida’s Kennedy Space Center. 

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The hurricane-related Artemis I rollback follows two other launch delays, the first due to an engine problem and the second because of a hydrogen leak.

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