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BFD Expert Voices - Media Deals

BFD Expert Voices

As the tech industry convenes in Las Vegas to pitch and party, companies across the space have announced significant layoffs and other cuts this week.

Why it matters: These measures will have a broad impact in tech, particularly on the media side, and will further dampen ambitions for dealmaking, Kerry writes.  

State of play: At least three companies reported cuts yesterday. 

Salesforce, which has made about 80 acquisitions, including Slack, plans to cut 10% of its workforce, according to an SEC filing. That equates to about 8,000 employees. It's also reducing office space. 

Vimeo, which went public in May 2021 and later that year bought Wirewax and Wibbitz, announced layoffs impacting 11% of its workforce, per Insider. It had already cut 6% of its staff in July.

Amazon, which has continued to invest heavily in media (most recently with its acquisition of MGM), plans to cut 18,000 jobs, CEO Andy Jassy wrote in a memo posted on its site. It's also been reorganizing its media teams. 

Yes, but: Despite the market pressures, TMT executives aren't putting their heads in the sand. Head honchos in Las Vegas for the annual CES shindig are launching new strategies and pitching products. 

For example, Roku, itself coming off a round of layoffs, unveiled its own line of TVs — a big bet for the streaming company given its past and continued reliance on partnerships with other TV makers. 

Go deeper: What's happened so far at CES 2023

The tale of two techs: layoffs, and launches

1 big thing: Tech industry cuts continue

Illustration of a cursor pushing out a worker holding a cardboard box with their possessions.

The NFT market took another one on the chin yesterday when Fanatics sold off its majority stake in Candy Digital, an NFT company it cofounded in 2021, a source confirmed to Tim. 

Why it's the BFD: As the "crypto winter" gets colder for investors, the once-booming sports NFT space has taken a nosedive. 

"Over the past year, it has become clear that NFTs are unlikely to be sustainable or profitable as a standalone business," Fanatics CEO Michael Rubin wrote in an internal email, according to CNBC, which first reported the news yesterday.

Details: Fanatics is selling its 60% stake to an investor group led by Galaxy Digital, a crypto merchant bank led by Mike Novogratz, Candy Digital's other founding shareholder. 

Flashback: Candy Digital was founded in June 2021 in the heat of the sports NFT boom. 

The company landed a major licensing deal with Major League Baseball for a series of NFTs and scored further deals with Netflix, WWE and multiple NASCAR teams. 

In October of that year, it was valued at $1.5 billion after getting a $100 million investment round that included SoftBank, Insight Partners, and NFL legend Peyton Manning.

Of note: Fanatics is fresh off a $700 million funding round aimed at acquisitions in its bid to become a full-fledged media business. 

2. The BFD: Fanatics dumps its NFT business 

Illustration of a museum frame with a crypto block in it falling off a wall and tipping over forward.

LionTree led a buyout of Transmit.Live, a Miami-based streaming ad tech platform, at a $350m valuation. https://axios.link/3GiECAm

UTA acquired Fletcher & Co., the New York-based fiction and nonfiction publishing house. https://axios.link/3GBxf8l

🎵 Round Hill Music Royalty Partners acquired the producer royalties and related rights of music producer Steve Lillywhite, who worked with such artists as U2, The Rolling Stones, Morrissey, Dave Matthews Band, Phish and Talking Heads. https://axios.link/3WJ4vjR 

Toho International, the U.S. subsidiary of Japan's film studio Toho Co., agreed to buy stakes in three animated productions owned by Frederator Network. https://axios.link/3Gm4NWP

TipRanks, an Israel-based financial tech company, acquired The Fly, a New Jersey-based digital publisher covering financial news. https://axios.link/3QwxJjH

WPP acquired Fēnom Digital, a New York-based agency focused on commerce and customer experience. https://axios.link/3VMwY74

Moore, a Tulsa, Oklahoma-based direct mail company, acquired the direct response processing business of Merkle, a Columbus, Ohio-based performance marketing services firm owned by Dentsu Aegis Network. https://axios.link/3vHo1RC

TikTok will license IMDb data as part of a new in-app feature that will allow users to search for content related to a specific film or TV title, per The Hollywood Reporter. https://axios.link/3jVrQAl

3. Deal flow

The Atlanta Journal-Constitution named Andrew Morse as its publisher. He was previously EVP and chief digital officer for CNN Worldwide. https://axios.link/3QdehYS

Antenna Group appointed Linda Jensen as group CEO. She's held senior positions with HBO Europe and MTV Russia. https://axios.link/3XneICv

Allen Media Group hired Harold Morgenstern as president of direct advertising sales and partnerships. He was previously CRO of Plex. https://axios.link/3Zclfla

CNN hired former Rep. Adam Kinzinger (R-Ill.) as a senior political commentator. https://axios.link/3WRnOrg

4. Movin' on up (or out)

Meta fined over $400 million for its targeted ad practices (Axios)

"The fines may be large and hint at a future where targeted advertising is banned, but the fact that they stem from 2018 complaints shows how slow the process will be for any real shifts to how Meta operates," per Ashley Gold.

The great podcasting market correction (Bloomberg)

"The resulting glut of programming helps explain, in part, how an industry that is still expanding can now often feel like one that is contracting. The overall pie may still be growing, but lately most everyone's relative slice has gotten smaller," Ashley Carman and Lucas Shaw write.

Cineworld bankruptcy judge tells Regal parent to fast-track theater closings, landlord negotiations (Deadline)

"We are not going to stick around forever. The debtors need to be aggressive. I am not sitting here for a year, or for six months, to figure out what shops are closing. That is a process that is going to happen now," Judge Marvin Isgur said yesterday. 

Does New Year's silence signal the end of Peak TV? (THR)

"The first half of last year saw 357 English-language scripted originals, up 16 percent from 2021's record pace. Since then, the economy has been in a downturn, and companies including Warner Bros. Discovery have been in cost-savings mode," Lesley Goldberg writes.

5. Channel surfing

Illustration of a TV color test screen in the shape of a wave.

@tim_bays: "The Banshees of Inisherin" on HBO Max. It took me way too long to finally watch "In Bruges," so I will not wait again to watch another Brendan Gleeson-Colin Farrell duet. 

@kerrymflynn: "The Menu" on HBO Max. I chose to see this thriller at home rather than in theaters so I could hide behind a pillow and pause when necessary. 

✏️ Thanks to Michael Flaherty for editing and Jay Bennett for copy editing this newsletter.

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January 05, 2023

1 big thing: Tech industry cuts continue