The media group that operates both The Hollywood Reporter and Billboard magazine announced on Thursday that it has agreed to acquire four of SpinMedia's music assets, including some of the most storied music brands: Spin, Vibe, Stereogum and Death and Taxes.
The buyer, controlled by Prometheus Global Media, did not disclose financial terms of the deal.The acquisition will boost the purchaser's revenue to more than $100 million a year, two-thirds of which will come from digital and video, according to the media group. The deal also will create the world's largest music brand by digital traffic, social reach and audience share, it said, allowing the company to essentially own the music space.
SpinMedia Chief Executive Stephen Blackwell will become chief strategy officer for the acquired company, reporting to Hollywood Reporter-Billboard Media Group Co-president John Amato."One of the challenges in today's media environment is how do you remain relevant, so by combining these business brands and in particular by focusing on the music space, I think strategically the deal makes sense," said David Braun, founder and CEO of Capstone Strategic, an investment banking and financial advisory firm that focuses on merger and acquisition services.
The deal comes amid a surge of acquisition activity in the entertainment, media and communications space, as many firms have viewed the monetization of digital advertising and consolidation of digital content as essential to weathering a decline in print advertising and other traditional channels of revenue in the industry.
"You are going to see companies continue working to get bigger so that they can remain viable and profitable in these spaces. It's very difficult to remain small and independent," said Braun, who also wrote Successful Acquisitions: A Proven Plan for Strategic Growth.
Magazine publisher Wenner Media, owner of Rolling Stone, Men's Journal and Us Weekly, reportedly has been looking for an outright sale or strategic partnership for the latter, struggling magazine, with hopes of fetching $100 million. Potential bidders include Bauer Publishing, Time (TIME) and American Media, according to New York Post reports. (Time, of course, has received inbound interest as well.)
In addition, Jared Kushner, the son-in-law of President-elect Donald Trump, also is said to be shopping for potential buyers for The New York Observer, a paper he bought in 2006 for $10 million. WWD connected American Media, publisher of the National Enquirer, to that asset as well, although Kushner denied a sale effort was in progress in a subsequent Post story.
Representatives for Wenner Media, the Observer, Bauer Publishing, Time and American Media could not be reached for immediate comment.
Hollywood Reporter-Billboard Media has been trying to reach young and social media-savvy Millennials by partnering with Facebook (FB - Get Report) and offering custom content via Facebook Live. The approaches also will help the company aggregate digital data and in turn tailor the content toward a certain type of users, Braun said.
"Bringing in these historic brands under Billboard allows passionate music audiences to enjoy rock to urban to pop in one massive portfolio," Hollywood Reporter-Billboard Media Co-president Janice Min said in Thursday's statement. "The power and scale of these combined, complementary digital assets will deliver more ways to reach our audience through TV, video, live events, social and online through these brands."
Hollywood Reporter-Billboard Media reaches almost 30 million readers a month online globally, with a social footprint of about 20 million. Millennial-focused Spin magazine became fully digital in late 2012 after BuzzMedia acquired the 27-year-old publication and rebranded itself as SpinMedia.
The acquisition expands Hollywood Reporter-Billboard Media's online audience to 45 million readers a month, it said.
"They are not done. They are going to do more deals that may be content-related and technology-related. They themselves may become an acquisition target for a larger group like Nielsen, for example," Braun said. Nielsen Holdings (NLSN - Get Report) this week agreed to pay $560 million for Tribune Media's (TRCO) Gracenote video, music and sports data business.Hollywood Reporter-Billboard Media and SpinMedia representatives could not be reached for immediate comment.