Vox Media, the D.C.-based digital media company that's home to several popular internet brands, like Polygon, Eater, SB Nation and others, agreed to acquire New York Media, the parent company to New York Magazine, on Tuesday in an all-stock transaction. Deal terms were not disclosed.
Why it matters: New York Media has been in the hands of a private family trust for years. Its sale underscores a growing trend of media companies consolidating either for stability, survival or growth.
Details: According to a joint statement, New York Media CEO Pam Wasserstein, whose father purchased New York Magazine in 2003, will continue to run New York Media's properties while also overseeing strategic initiatives for the company, including commerce and consumer businesses.
- Her new title will be Vox Media president, and she will take a seat on Vox Media's board. Vox Media Chairman & CEO Jim Bankoff will remain in his role.
- "As I began talking with Jim about what the future might look like together, it quickly became apparent that our companies pair incredibly well," Wasserstein said in a statement.
Be smart: New York Media, which also owns a handful of digital news and culture sites, like The Cut, The Strategist, Grub Street, the Intelligencer and Vulture, has in many ways grown its company in a similar fashion as Vox Media. Both started out building digital first brands that they later commercialized through other revenue streams.
- Both own their own custom CMS (content management) software businesses that they license. And both license storylines to studio production teams for money. (It was announced Monday that New York Media would sign with the same talent and content licensing agency that currently works with Vox Media, WME.)
- Where they differ is that New York Media brings a strong commerce brand to the combined company, while Vox Media brings a strong podcasting business.
Yes, but: Don't expect the content to change all that much, at least for now. While the companies say they look forward to "opportunities for collaboration," the editorial networks from the two companies "will remain distinct."
- New York Media brands will continue to be led by New York Media Editor-in-Chief David Haskell and Vox Media brands will continue to be led by Vox Media Publisher Melissa Bell, per the joint statement.
The big picture: Digital media companies, especially those like Vox Media with venture capital funding, have struggled to grow their businesses meaningfully over the past few years, resulting in fire-sales and layoffs.
- An over-reliance on advertising revenue at a time when Big Tech companies began to dominate the online advertising business is generally blamed for many of their downfalls.
By the numbers: Per the Times, the combined entity "is expected to generate more than $300 million in annual revenue and will be profitable."
- Vox Media, which was once valued at $1 billion, and has raised over $300 million in funding. Reports have suggested that is was profitable in 2018.
- But New York Media was reportedly losing money before a recent upswing, per The Times.
Our thought bubble: For the past few years, a narrative has been built that digital media companies need to scale to compete against tech giants for ad dollars. This merger shows a new strategy that could potentially be the start of a different trend: Merge to combine complimentary assets, not eyeballs.