Pricey mergers force media giants to offload once-shiny assets
Pricey mergers are forcing some of the biggest media giants to shed assets that are no longer necessary to their core business.
Why it matters: Once sexy investments in new media companies are beginning to feel like expensive burdens on corporate giants looking to offload unnecessary debt.
Driving the news: NBCUniversal quietly sold its entire $500 million stake in Snapchat earlier this year, The Hollywood Reporter reports.
- Disney wrote down $157 million of its initial $400 million stake in Vice in 2018 as it was engaged in conversations about buying most of Fox.
- Verizon sold Tumblr for around $3 million last year after buying it for $1.1 billion in 2013.
Other media giants are shedding non-digital assets in efforts to alleviate debt.
- AT&T sold its stake in the Game Show Network for over $500 million last year. It has also shed several international telecom businesses since buying Time Warner in 2018 for $85 billion.
- ViacomCBS is looking to sell Simon & Schuster, the nearly 100-year-old publishing business, to focus on streaming and video.
The bottom line: Investments that were once the "shiny new media thing" have either become "big media" themselves or didn't turn out to be the jackpots their backers and acquirers desired.
Meanwhile, new upstarts are getting funding.
- Recent investments in The Athletic ($50 million), Axios ($20 million), Minute Media ($40 million), Action Network ($17.5 million), The Recount ($13 million) and Quibi ($750 million) suggest that investors are still looking to tie themselves to the next big thing.
Go deeper: Media companies wrestle with high debt loads