Broadcasting & Cable back on the auction block


Having failed to find a buyer last year for its entire Reed Business Information (RBI) division, Reed Elsevier has now put many of the US-based titles up for sale. Included are Broadcasting & Cable and Multichannel News, although Reed will retain Variety.

As Reed Elsevier announced its first half earnings numbers in London, the company disclosed that RBI-US CEO Tad Smith had left the company, CFO John Poulin had been appointed acting CEO and that some of its US titles were again up for sale. The company said the decision was made after a portfolio review by RBI Global CEO Keith Jones.

Along with B&C and Multichannel News, RBI-US is seeking to sell Publishers Weekly, Tradeshow Week and Professional Builder. Reed Elsevier will keep Variety, Reed Construction Data, RSMeans, MarketCast, LA411 and BuyerZone.

It appears unlikely that a single buyer would be interested in the whole package. It also appears unlikely that Reed Elsevier will get anywhere near the pricing it had hoped for when it began the previous sale process in February 2008. As that auction wore on for 10 months, bidding had reportedly dropped to $1 billion or less for all of RBI-US, whereas the company had originally hoped to get around $2 billion. Whatever cash the company does raise from the renewed sales effort will go to pay down corporate debt. Reed Elsevier also announced Friday that it is selling new stock – nearly 10% of its current float – to reduce debt, currently standing at $8.4 billion.

Reed Elsevier reported that for the first half of 2009 its revenues were up slightly to $5.57 billion, but that operating profits dropped 29% to $518 million.

RBR/TVBR observation: Potential buyers beware: If you do not have working knowledge and passion for the broadcasting business (Radio and TV/Cable) with long term vision we suggest you put your money in a CD. 

This is no longer the old fashioned trade business of paper/print/postage – it is the media information and internet business which reaches world wide.

We saw The Nielsen Company close the doors on their $18.5 million investment of Radio and Records. Crain Communications closed the doors on their weekly print of TV Week. Now Reed with B&C on the block – will they find a buyer?

Our observation – Only if Reed makes it attractive enough for someone in the media business and is a broadcaster that has vision for the next 10 to 15 years to rebuild on the internal parts and re-brand what is there.

The price has to be right and Reed may find they may have to possibly bankroll or back the potential buyer to achieve a successful transaction. Or B&C could face the same door slamming as Nielsen did with R&R. 

Reed can learn from RBR/TVBR publisher Jim Carnegie’s viewpoint on the closing of R&R’s doors.   

To the companies or anyone interested in the sale of B&C our word of caution –
’If you do not have passion for the broadcasting business our recommendation – Do Not get into this line of work.’ 

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