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BFD Expert Voices - Media Deals

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📱 Situational awareness: Taboola struck a deal with Apple to power native advertising within the Apple News and Apple Stocks apps, Sara Fischer exclusively reports.

Data: Yahoo Finance; Chart: Axios Visuals

Activist investor Starboard Value is seeking more product innovation at Tinder, and other operational changes at Match Group, after acquiring a 6.6% stake in the online dating giant.

Why it matters: The activist suggested considering a sale of the publicly traded company if it does not deliver on the recommendations.

Zoom in: In a July 15 letter to Match CEO Bernard Kim, president and CFO Gary Swidler and the board, Starboard CEO Jeff Smith said his firm views the stock as undervalued. Match's stock is down 80% over the past three years.

Starboard's recommendations include growing revenue by investing in more product innovation at Tinder and improving margins by reducing expenses. Starboard also suggested share repurchases.

The letter also said Match, which owns popular dating apps like its namesake Match, Tinder, Hinge and OkCupid, should consider going private if the situation does not improve.

The Wall Street Journal first reported Starboard's stake.

The other side: A Match spokesperson confirmed talks with Starboard in a statement shared with Axios.

"We are relentlessly focused on executing our key initiatives, which include: driving growth at Tinder, continuing Hinge's impressive expansion, maintaining appropriate financial discipline, and returning capital to our shareholders," the Match spokesperson said.

Tinder CEO Faye Iosotaluno spoke to Axios earlier this year about upcoming product changes.

Zoom out: Online dating has fallen out of favor with Wall Street as Gen Z and others engage less with the industry.

For its first quarter earnings, Match reported revenue was up 9% over the past year. But its number of paying users was down 6% and operating income was down 7% from the prior year.

The company noted weaker consumer spending was affecting Tinder.

State of play: Other activists have targeted Match, including Elliott Management.

Match announced in March the appointment of two new board members and an information-sharing agreement with Elliott.

Anson Funds Management also recommended new board members, per Bloomberg.

What we're watching: Match reports second-quarter earnings on July 31.

Starboard proposes changes at Match

Digital marketing agency Mod Op has acquired Evans Hunt, a Canadian digital agency.

Why it's the BFD: The deal is part of Alterna Equity Partners-backed Mod Op's larger M&A strategy as brands seek fewer agency partners that offer more holistic services.

Zoom in: Evans Hunt grows Miami-based Mod Op's reach in Canada and adds more expertise working with clients in travel and tourism, energy and telecom.

Founded in 2008 and headquartered in Calgary, Evans Hunt is an independent agency. Clients include Travel Alberta, Boyne Resorts, Alterra, Brookfield Residential, Glassdoor, Cenovus and Rogers.

Evans Hunt has 113 employees. The acquisition is Mod Op's largest to date by employee count and grows its total headcount to 425 employees, including 170 employees in Canada.

Zoom out: Mod Op's M&A strategy has expanded its capabilities and geographic reach.

The company now has offices in Miami, Dallas, Kansas City, Los Angeles, Portland, Minneapolis, New York, Philadelphia, Panama City, Panama and Cleveland along with Toronto and Calgary in Canada.

Other recent acquisitions include marketing agency LAM Design, creative agency Red Tettemer O'Connell + Partners and public relations firm Crenshaw Communications.

South Florida-based Alterna invested in Mod Op in 2022.

What's next: CEO Eric J. Bertrand says Mod Op recently secured a bank facility from Bank United to further support its growth.

Bertrand says Mod Op is in serious conversations with three companies as it seeks more acquisitions and is focused on developing proprietary technology.

Marketing agency M&A, eh?

Illustration of a bullhorn resting on top of a stack of one hundred dollar bills.

Data: Box Office Mojo; Chart: Axios Visuals

"Fly Me to the Moon" became the latest theatrical swing and miss in Apple's quest to make an impact at the box office.

Why it matters: Apple spends $1 billion a year making movies for theaters as it searches for box office gold.

Zoom in: "Fly Me to the Moon," a rom-com starring Channing Tatum and Scarlett Johansson set in the Space Race era, opened to just $9.4 million last weekend.

The movie, which reportedly cost $100 million to make, was Apple's worst opening of its four wide releases to date.

Each of Apple's four big movies has opened smaller than the last.

"Fly Me to the Moon" got less than half of the box office from "Longlegs," the indie horror film from Neon that was the only other newcomer last weekend.

What's next: Apple's next big theatrical release comes in November with the George Clooney-Brad Pitt hit-man film "Wolfs," followed by Pitt's Formula 1 movie next summer.

The bottom line: Apple and fellow tech giant Amazon are betting on the box office, but they need to hit some winners soon.

Charted: Apple's latest box office bust

Go deeper in our full database in the Axios Pro Deals Tracker.

• Vectara, a Palo Alto-based generative AI product platform, raised a $25m Series A. FPV Ventures and Race Capital co-led and were joined by Alumni Ventures, WVV Capital, Samsung Next, Fusion Fund, Green Sands Equity and Mack Ventures. Go deeper

• Dusk, a developer of social multiplayer games, raised $8m co-led by Makers Fund and byFounders. Go deeper

• Presti, a French provider of AI solutions for product photos, raised $3.5m in seed funding led by Partech. Go deeper

• Banner Capital Management acquired Vision Graphics, a Salt Lake City provider of print and display solutions. Go deeper

• Dream Machine FX, a global collective of visual effects houses, acquired Important Looking Pirates, the effects studio whose work includes "Stranger Things" and "Fallout." Go deeper

• James Shani, an executive producer on the Donald Trump biopic "The Apprentice," is leading a group that will buy out Dan Snyder's Kinematics stake in the controversial film, which will pave the way for a U.S. release, TheWrap reports. Go deeper

• The FTC is launching an in-depth review of IBM's (NYSE: IBM) proposed $6.4b cash takeover of HashiCorp (NYSE: HCP), an SF-based multicloud automation software provider. Go deeper

• SK Telecom (NYSE: SKM) made a $200m preferred equity investment in SGH (Nasdaq: SGH), a Milpitas, Calif., maker of computing, memory and LED products. Go deeper

• 🎲 Hann, a Philippine casino operator, is prepping a $200m local IPO, per Bloomberg. Go deeper

• OneTeam Partners, a commercial venture created by the NFLPA and MLBPA, is looking to launch a $75m fund to invest in early-stage businesses that support athletes, Sportico reports. Go deeper

• Dream Machine FX, a global collective of visual effects houses, has acquired Important Looking Pirates, the effects studio whose work includes "Stranger Things" and "Fallout." Go deeper

Deal flow

• Alejandra Santamaria was named president and CEO of Southern California Public Radio. Go deeper

• Stephen Denton, was named CEO of Opendorse, a platform that facilitates NIL deals. Go deeper

• Jason Langwell was named CRO for TMRW Sports Group, the sports and media firm co-founded by Rory McIlroy and Tiger Woods. Go deeper

• John Stamos (yes, the actor) was named chief innovation officer for Gray TV-backed streaming service Zeam. Go deeper 

• Danette Chavez was named EIC of Paste Media's The A.V. Club. Go deeper

• Natalie Bjelajac was promoted to VP of U.S. publicity, events and publishing at Netflix. Go deeper

• Shari Redstone quietly co-produced Job, an off-Broadway play that held its first opening preview yesterday, Sara exclusively reports. Go deeper

• Skip Bayless, co-host of Fox Sports 1's "Undisputed," will leave the network after this summer. Go deeper

Movin' on up (or out)

😡 As Dump Biden movement fizzles, Hollywood turns its angry eyes on Jeffrey Katzenberg (THR)

"For months, Katzenberg has not only been bragging about his intimate access to the President but assuring anyone who would listen (and write a check) that Biden was in tip-top mental shape. While Biden's press conference last week soothed some frayed nerves, others remained unconvinced," Lachlan Cartwright writes.

😧 Internal Disney communications leaked online after hack (WSJ)

"Material viewed by the Journal includes conversations about maintaining Disney's corporate website, software development, assessments of candidates for employment, programs for emerging leaders within ESPN and photos of employees' dogs, with data stretching back to at least 2019," Sarah Krouse and Robert McMillan report.

🏀 Knicks' James Dolan criticizes NBA's revenue sharing, new media deal (ESPN)

"Dolan cited the 42 million homes that have abandoned traditional paid television over an eight-year period and how those losses — which include a 45% decline for the Knicks' MSG Network — have been compounded by the league's new streaming and television deals. Dolan wrote that the league's new national deal renders the regional sports networks, or RSNs, 'unviable,'" Adrian Wojnarowski writes.

Channel surfing

an illustration of a poster that has a remote control in front of a sunset and says "channel surfing" on a dorm room wall

@tim_bays: "Presumed Innocent" on Apple TV+. This is Peak Jake Gyllenhaal. 

@kerrymflynn: "The House of Halliwell." RIP Shannen Doherty. I obsessed over "Charmed" growing up, thanks to TNT reruns and owning the box set. This rewatch podcast is a touching tribute.

✏️ Thanks to George Moriarty for editing and Katie Lewis for copy editing this newsletter.

Thank you for reading Axios Pro Media Deals! Please ask your friends, colleagues and Match Group shareholders to sign up.

July 16, 2024

1 big thing: Starboard proposes changes at Match