Hollywood trade icon Variety is now the property of Penske Media Corporation, owner of Hollywood blog Deadline.com. The seller is Reed Elsevier. Changes are said to be coming – what they might be is to be determined.
Terms of the deal were not disclosed, but an article in the Los Angeles Times pegged it at about $25M. LAT said that as recently as 2006 Variety earned $33M in profit on $92M in income, but declining advertising revenues have put it on track to earn about $6M on $45M this year. It has undergone serious down-sizing during the period.
Jay Penske, Chairman and Chief Executive Officer of PMC, said, “Since 1905, Variety has been the world’s premier entertainment news source, and is today one of the most recognized global media brands. We are thrilled to welcome Variety and its exceptional team into the PMC organization. As part of this significant acquisition, we plan to rapidly build upon Variety’s foundation while extending this invaluable brand’s presence across the web, broadcast, mobile, and international markets.”
Neil Stiles is the president of Variety, said to be on the way out by LAT. He is nevertheless enthusiastic about Penske’s potential to revitalize the Variety brand. “PMC is uniquely positioned to preserve and build the market presence of Variety,” said Stiles. “Their shared values and complementary assets provides for many new opportunities for the business model and brand.”
According to LAT, Penske intends to gather data and assess the situation at Variety before making any major moves.
RBR-TVBR observation: RBR-TVBR knows something about the trade mag biz, and we know what we do not have in common with Variety: Paper. And we haven’t seen too many instances of new media buying old thus far, but it’s entirely possible we’ll be seeing more of it as time goes forward. But not necessarily – perhaps wheezing old media properties will simply be allowed to expire.
The good news about this deal for old media is that a well-known brand name such as Variety is still seen to have value, and that new money has come forward to claim it.
But the lesson is clear – for Variety to survive, it’s going to have to compete effectively on new media platforms.
RBR-TVBR has gone from being a paper and snail mail weekly to a completely online and email daily operation, so we can say from hard experience that making this transition ain’t easy. We wish Penske and Variety all the best, and will be watching with keen interest to see how they go forward with this reclamation project.