Apr 16, 2024 - Business

Strategic buyers breathe new life into struggling media outlets

Illustration of a collage featuring an old TV, parts of dollar bills, and a TV test pattern.

Illustration: Brendan Lynch/Axios

Media companies once left for dead are getting a second chance at life with new strategic owners and management determined to revive them.

Why it matters: While the business fundamentals behind many media companies have collapsed, for many, their brand equity has remained intact.

Driving the news: Barry Diller, the chair of internet holding company IAC, has tapped media industry veterans Ben Sherwood and Joanna Coles to shake up The Daily Beast and has granted them a stake in the outlet.

  • The Daily Beast is not profitable and last year was on track to lose tens of thousands of dollars, a person familiar with the company's finances said. Sherwood and Coles were granted a stake in the business to align their incentives with the company's performance.
  • Sports Illustrated staffers who were let go following the chaotic legal dispute between its brand owner and former license partner are expected to be hired back after a new licensing partner, Minute Media, struck a deal to revive the site. Minute Media is profitable and valued at over $1 billion.
  • Yahoo has been on an acquisition spree since being acquired by Apollo in 2021. Earlier this month it bought Artifact, the AI-driven news aggregation and platform started by Instagram's co-founders.
  • Complex seems poised for a comeback following its sale to NTWRK, an e-commerce company that's pouring millions of dollars into revitalizing the brand. NTWRK plans to relaunch its flagship magazine and launch new, original shows.
  • Jezebel was close to shuttering before it struck a deal to be acquired by Paste Magazine from G/O Media.

Yes, but: Not all new owners have plans to invest in the dying brands they're buying, instead milking their reputations for short-term profits.

  • Deadspin, for example, was sold by G/O Media last month to a secretive European firm called Lineup Publishing, which is essentially a sports gambling hub. None of Deadspin's existing staff was kept with the deal.
  • Local newspapers and broadcast stations gobbled up by hedge funds in the aughts have been squeezed for any last remaining profits while being mostly starved of future growth opportunities.

What to watch: More survival deals are on the way.

  • Refinery29 could be sold out of Vice Media, which acquired it for $400 million in stock in 2019. Vice is reportedly in talks to sell the female lifestyle site to Essence magazine's parent Essence Ventures.
  • Paramount has entered exclusive talks with film and TV studio Skydance Media, essentially rebuffing a higher all-cash offer from Apollo Global Management. A source told Axios the select committee evaluating options prefers the strategic value of the Skydance deal.

The bottom line: Brand equity is a delicate currency.

  • The more a company relies on its brand to juice profits without investing in its core products, the faster its brand equity craters.
Go deeper