Mar 10, 2020 - Economy & Business

Pricey mergers force media giants to offload once-shiny assets

Illustration: Aïda Amer/Axios

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

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Scoop: The Recount raises $13 million in Series A round

The Recount co-founders John Heilemann (left) and John Battelle (right). Photo: The Recount.

Recount Media, a short-form political video startup created by veteran journalists John Battelle and John Heilemann, has raised $13 million its Series A funding round, executives tell Axios.

Why it matters: The round includes strategic media companies as partners, instead of just financial investors. "It's better to have big companies looking out for us and rooting for us than a bunch of purely financial investors around the table," Battelle tells Axios.

Podcast: Misinformation in the coronavirus age

Accurate information could be the difference between life and death, putting extra responsibility on news outlets, social media companies and public officials to be sure of what they report, amplify and say. Dan digs into the state of media and media trust with Axios' Sara Fischer.

Go deeper: Coronavirus presents existential threat for news media

Tech giants set to lose billions in ad revenue in virus shutdown

Illustration: Aïda Amer/Axios

Tech giants like Google, Facebook and others are expected to lose billions of advertising dollars this year thanks to economic disruptions caused by the coronavirus pandemic, analysts say.

Why it matters: The losses aren't expected to cripple these companies, but they will put a dent in the otherwise unprecedented growth that several have experienced for the past few years.