Variety, the venerable show-business trade paper, is on the block as owner Anglo-Dutch media and data giant Reed Elsevier retreats from its last remaining US title.
Mark Kelsey, CEO of Reed Business Information, announced plans to sell the 107-year-old title on Variety’s website yesterday. While insisting Variety remains the industry’s dominant news source, Kelsey said the company is more focused on its data services.
Once considered Hollywood’s bible, Variety has come under intense competition, in particular from online rivals such as The Wrap and Deadline Hollywood. Variety’s profits have taken a hit as well and there’s little doubt the trade is worth far less than the $100 million valuation that some sources put on it as recently as 2008.
It marks a dramatic reversal of fortunes. At one point, Reed International owned Boston-based Cahners Publications and battled tooth and nail with rival McGraw-Hill to be the biggest trade magazine publisher in the US.
When London-based Reed combined with Netherlands based Elsevier in the early 1990s, it finally eclipsed McGraw-Hill — but there was little time to enjoy its triumph as both giants shifted away from publishing and into profitable data services.
In 2008, Reed Elsevier tried to sell its entire trade portfolio for more than $2 billion just as the first cracks from the recession appeared, forcing it to cancel the sale.
Two years later, it conducted a small sale of some trade titles including Broadcasting & Cable, Multichannel News and Publishers Weekly but steadfastly resisted overtures to sell Variety.
Among those who wanted to buy it at the time was then Editor-in Chief Peter Bart, a respected Hollywood insider who retired two and a half years ago.
“I am happy to say, I am not in the middle of it this time,” said Bart when reached yesterday.
Executives at Prometheus Media, which bought The Hollywood Reporter and other trade titles from Nielsen for $70 million in 2009, would seem to have more interest in plotting their own exit strategy than expanding, at this point.
The Hollywood Reporter scrapped its daily and has seen digital traffic to THR surge to just under 5 million monthly unique visitors, while Variety trailed with just more than 600,000, according to comScore.
Reed Elsevier has been rapidly shifting gears as it moves away from ad-supported media and focuses on more data-supported businesses.
In the past week, it acquired Law 360, a database company to go with its Lexus/Nexus unit, and announced plans to sell its Australian magazines.
No investment banker has yet been hired to handle the Variety sale.
Reed Phillips at boutique investment bank DeSilva & Phillips said the field of potential suitors may be limited.
“You’ll probably have names like David Geffen circling around it, but will they pull the trigger? Probably not,” he said. Since a financial player bought rival THR, Phillips suggested it could happen again. A strategic buyer such as Jay Penske, who already owns Hollywoodlife.com, edited by Bonnie Fuller, and Deadline Hollywood, edited by Nikki Finke, might take a look.