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BFD Expert Voices - Media Deals

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Non-media companies have increasingly swooped in to rescue publishers from the financial pressures of a tough ad market and other issues. Such a bet carries risk, but the upside is that the buyer believes it's gaining an external marketing resource in the process.

Why it matters: Owning a media company can potentially help brands save future costs by creating community and customer loyalty through content.

Driving the news: For Them, a wellness company dedicated to supporting queer and gender-expansive people, is acquiring online magazine Autostraddle in an all-equity deal, CEO Kylo Freeman tells Kerry.

Context: As an entrepreneur in residence at Prehype, Freeman decided to launch a startup tackling a personal problem — how their chest binder was "ridiculously uncomfortable," they say. For Them launched in January 2021 and that year released a chest binder, which has sold more than 40,000 units.

For Them raised $2 million in pre-seed funding in August 2021. Resolute Ventures led and was joined by Yes VC, Animo Ventures, Gaingels Spark Fund and individuals.

"We're at a great inflection point where we're growing really fast," Freeman says. "We'll raise a little bit more to get us through this acquisition and get us to a place where we can grow and feel really strong and then we'll do a Series A next year."

Details: Freeman says For Them was interested in a content business as a way to "distribute accurate information" and "connect folks through the queer zeitgeist." Freeman reached out to five publications, including Autostraddle, which Freeman says had helped them come out.

Founded in 2009, Autostraddle is an online magazine for queer, trans and nonbinary communities. It averages more than 2.1 million monthly page views. Revenue has come from ad deals with brands like REI, Johnson & Johnson and HBO and from community fundraising. But it has struggled financially as the company publicly admitted and as reported by Defector.

Autostraddle will have editorial independence and plans to hire more writers, For Them CMO Em Chadwick says.

Autostraddle CEO and co-founder Riese Bernard will join For Them in a strategic development and editorial role. All six full-time employees will join For Them's team of six full-time employees and receive equity.

Financial details of the acquisition were not disclosed.

What's next: For Them plans to expand The Playground, the membership program it launched in June that now has about 1,000 paid members. It includes discounted and exclusive products and an app that offers journaling, outfit tracking and community chat.

Autostraddle's membership program A+, which includes premium content and members-only events and has 7,000 paid subscribers, will merge with The Playground.

1 big thing: Brands run on media

Illustration of a person reading a print newspaper with the pride flag stripes

Microsoft has offered to restructure its proposed $69 billion takeover of Activision Blizzard, eschewing cloud rights for Activision PC and console games, Dan Primack writes.

Why it's the BFD: This could help Microsoft secure approval from the U.K.'s Competition and Markets Authority, which previously blocked the deal.

Details: French gaming giant Ubisoft will acquire cloud rights to existing Activision PC and console games, plus cloud rights to any such games released by Activision over the next 15 years.

All of that would happen just before Microsoft closes its deal — something it originally planned to do in late July but has since pushed back to mid-October.

💭 Thought bubble from Axios Gaming's Stephen Totilo: This divestiture isn't expected to have much affect on U.S. antitrust efforts via the FTC, which involve broader concerns about Microsoft's control of top Activision title Call of Duty, but the FTC is playing a much weaker hand right now than is the CMA.

2. The BFD: Microsoft offers up the cloud

Illustration of Microsoft's logo with overlays of gavels.

Mather Economics, an Atlanta-based consultancy, has acquired AI tool Sophi Inc. from Canadian publisher The Globe and Mail in an all-cash deal, executives exclusively tell Kerry.

Why it matters: Building effective paywalls and retaining subscribers has become increasingly important for publishers as they compete with tech giants and each other for an unpredictable amount of ad dollars.

Details: Sophi CEO Mike O'Neill approached Mather earlier this year as he explored ways to grow the business. Sophi's AI tool helps publishers with content curation and paywall management.

All 34 full-time employees at Toronto-based Sophi are joining Mather's team of 55 full-time employees. O'Neill will stay on as CEO of Sophi.

Sophi is Mather's first acquisition, Mather president Matt Lindsay tells Axios. The deal also expands Mather's presence in Canada. It already has offices in the U.S. and Europe.

"We have built tools internally, but we really saw Sophi as an opportunity to accelerate our ability to get these tools to market. They expand the tools that we already have, and they're complementary," Lindsay says.

Of note: Lindsay says Mather, a subsidiary of media group Mediahuis, is open to more acquisitions.

"If there's a good fit out there, we're open to other things," Lindsay says. "This was a very successful happy experience, so I would certainly do it again."

3. Exclusive: 🇨🇦 The Globe and Mail sells AI platform

Illustration of a line of doors with hundred dollar overlays 

The next chapter of "Frozen" is for your ears, as Disney plans to release a 12-episode podcast titled "Disney Frozen Podcast: Forces of Nature" in October.

Why it matters: Kid-friendly podcasts have gained popularity as a screen-free form of entertainment with TV giants and media startups investing more in the medium, Kerry writes.

Details: The podcast, aimed at kids aged 6 to 12, is set after "Frozen 2" and involves Anna and Elsa traveling to the Enchanted Forest and coming across "mysterious copper machines that are disrupting the natural order of things," the press release said.

Olaf, Kristoff, Sven and General Mattias are also featured. New characters include Sankershus ruler Queen Disa and the Duke of Weselton's nephew Lord Wolfgang, along with his pet magpies, Astrid and Magnus. ABC News' chief meteorologist Ginger Zee is a voice presenter in the series.

The episodes are around 15 to 20 minutes long.

Macy's is the sole presenting partner of the podcast.

4. ☃️ Would you like to build a podcast?

The tile cover for "Disney Frozen Podcast: Forces of Nature" with Anna and Elsa standing side by side. Anna, on the left, looks inspired and has her hand on her chest while Elsa, on the right, looks worried. The image also says Disney Publishing Worldwide and ABC Audio

Looking for more deal insights? Search the Axios Pro Deals Tracker beta.

• Prins AI Technology, Ltd, an AI-driven digital persona training product, raised $22m in Series A+ funding. https://axios.link/45gGi8x

• Fearless, a Baltimore-based digital services company, raised $17m from Truist Bank and the Maryland Small Business Development Authority. It's looking to raise another $10m by end of year. https://axios.link/3P5mO03

• Novig, a sports betting exchange startup that seeks to "democratize" the nascent industry, closed a $6.4m seed round led by Lux Capital with participation from a group of 30 investors including Y Combinator, Paul Graham and Joe Montana. https://axios.link/44n3jWd

• 🏈 Aurum Partners, a family office tied to the San Francisco 49ers owners, are raising $50m for a new VC fund known as known as Aurum Fund I.  https://axios.link/3KPJhwL

• Infillion has emerged as the highest bidder for the assets of MediaMath, according to court filings, ahead of a sale hearing tomorrow morning, per Insider. https://axios.link/45j4xmu

• Francisco Partners is buying The Weather Company assets, which include Weather.com, Weather Underground and Storm Radar, from IBM (NYSE: IBM) for an undisclosed amount. https://axios.link/3YGZFFv

5. Deal flow

• Bloomberg L.P. shake-up: Product chief Vlad Kliatchko will take over as CEO; Chief Enterprise Officer Patti Roskill will become CFO; and President of Bloomberg financial products JP Zammitt will become president of the larger company. https://axios.link/3QIs7F0

• 🏈 Maureen Smith, a senior executive at the Minnesota United FC, was named CFO of the Green Bay Packers. https://axios.link/3YKcazY

• Phillip Covell was named chief commercial officer of VFX company iGene Media. https://axios.link/3qFB4nW

• Mark Kantor, former head of growth at Zynga, was named VP of innovation at Match Group. https://axios.link/3OJmFPu

• Laura Bassett, EIC of Jezebel, resigned from G/O Media on Friday. https://axios.link/3YMelDg

• 🎙️ Anya Grundmann, top programming executive at NPR, will step down at the end of the year after nearly 30 years at the network. https://axios.link/47ESotQ

• Lee Fitting, SVP of production for ESPN, overseeing key properties like "Monday Night Football" and "College GameDay," is out after 25 years with the company. https://axios.link/45ksKsG

6. Movin' on up (or out)

🤖 Newsrooms grapple with rules for AI (Axios)

"Most news companies are allowing some use of AI under the editorial supervision of humans, but many of the new guidelines prohibit AI from being used to write articles, and extra scrutiny is applied to AI-generated images and video," Ryan Heath and Sara Fischer write.

🎶 Ariana Grande and Demi Lovato both split from music manager Scooter Braun (EW)

"News of Grande and Lovato's departures follows a Puck report last week indicating that Justin Bieber, who first linked up with Braun way back in 2008, was also potentially seeking new management. But representatives for Bieber and Braun have since denied rumors of a split," Lauren Huff writes.

🍿 Coming soon to a theater near you: $4 movie tickets (Axios)

"The Cinema Foundation, a nonprofit arm of the National Association of Theater Owners, announced Monday that Aug. 27 is the second annual National Cinema Day for the U.S. Tickets for all showtimes, including premium format screens like IMAX and Dolby Cinema, 'will be no more than $4,' the foundation said in a news release," Kelly Tyko writes.

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7. Channel surfing

Illustration of a surfer with a television in the place of his head.

🗣️ Quote of the day: "That was pretty impressive," New England Patriots coach Bill Belichick said on WEEI of watching Taylor Swift play through the rain at Gillette. "She's tough, man. She stood out there and played right through."

@tim_bays: "Hijack" on Apple TV+. Not the best thing to watch less than a month out from a flight to Italy, but this show is so riveting. 

@kerrymflynn: "Some Like It Hot" at the Shubert Theatre. Won the lottery and convinced my husband to come with me by saying Chicago and jazz. 🎷

✏️ Thanks to Michael Flaherty for editing and Katie Lewis for copy editing this newsletter.

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August 22, 2023

1 big thing: Brands run on media