Penske Media Corporation, the L.A.-based parent company of Variety and Deadline, is in talks that may lead to the purchase of rival showbiz publication The Hollywood Reporter, insiders say.
A top-level executive close to the situation tells Los Angeles that talks concerning a potential deal between PMC and The Hollywood Reporter‘s parent company, Valence Media, are in their early stages.
If acquired by PMC, The Hollywood Reporter would become a sister publication to its current rivals Variety and Deadline Hollywood, leaving TheWrap as the only major Hollywood business publication or “trade” not owned by PMC chairman and CEO Jay Penske. The 41-year-old media mogul, son of Roger Penske, has spent the past decade building his L.A.-based media company into a formidable powerhouse that owns Rolling Stone, Robb Report, Indie Wire, ARTNews, and a host of other high-profile entertainment and cultural titles.
It’s unclear if Valence’s other trade publications would be included in a PMC deal. But insiders say that Valence, which also owns the television and film production companies MRC and Dick Clark Productions, has been quietly shopping its media titles to concentrate on its core properties. If consummated, a broader deal between the two companies could potentially hand PMC control over Valence-owned Billboard, the dominant music-industry trade, as well as Vibe.
A representative for Valence told Los Angeles that PMC’s possible acquisition of The Hollywood Reporter is “not true.” Reached earlier today, a PMC spokesperson said the company would have “no comment on a misleading story by a former THR employee.” [The writer of this story was previously editor of THR.com, the magazine’s website, and executive editor of TheWrap.]https://www.instagram.com/p/Brycv7Olb9V/
Speculation over PMC-Valence talks come at a volatile time for Hollywood media as the coronavirus pandemic continues to wreak havoc on the entertainment industry. Major disruptions to this year’s awards season have created considerable financial anxiety for the trades, which generate a significant chunk of their annual revenue from the millions of dollars that film studios spend on For Your Consideration ad campaigns.
Valence has faced other problems in recent months. Last April, the publication’s well-regarded editorial director Matthew Belloni exited abruptly over disputes with Valence’s co-CEOs Modi Wiczyk and Asif Satchu. Belloni was reportedly reluctant to skew reporting in favor of the company’s other assets, including MRC, which produces TV series and movies such as Netflix’s Ozark and the critically acclaimed Knives Out. Valence execs also attempted to kill a profile on Louise Linton, wife of U.S. Treasury Secretary Steve Mnuchin; warned Belloni about coverage of Jennifer Lopez; and complained of THR’s “negative coverage of the industry” according to The Daily Beast.
On the heels of Belloni’s departure, THR laid off longtime publisher Lynne Segall along with about a dozen journalists, including veteran film critic Todd McCarthy, who subsequently wrote a scathing column for Deadline about the cuts, which he called a “bloodbath.” Soon after, Valence jettisoned additional staff members across all of its media publications, including Billboard and Vibe. Sources say the company also put a hiring freeze in place and cut the salaries of staffers making more than $100,000 per year. Additionally, Wiczyk and Satchu stopped taking salaries as the company looked to stem losses of that reportedly total around $15 million a year.
Any deal with Penske would have to be approved by Todd Boehly, the co-founder of Eldridge Industries, which owns Valence. “It wouldn’t surprise me that Todd Boehly would be looking to offload some assets during these rough economic times,” an insider told Los Angeles, “especially given how much money The Hollywood Reporter has lost over the last decade.”
But given the high valuation Eldridge has set for The Hollywood Reporter and a long-term strategy for the title that has only been partially executed, selling it now would be premature, says a source close to Valence. The source further notes that Valence recently snapped up the Nielsen rating company in an attempt to boost Billboard’s market presence. “Maybe the pandemic and the [Belloni] controversy have changed the calculus but I don’t see Modi [Wiczyk] selling now. It would be an admission he screwed up.”https://www.instagram.com/p/CCYfEedHbfc/
Since it was founded by Jay Penske in 2004 with an infusion of private equity money, PMC has acquired and launched new titles at a rapid pace. (According to published reports, Penske sold a minority stake in the company to a Saudi investment fund in 2018 for $200 million.) In 2019, the company completed its acquisition of Rolling Stone in a series of deals estimated to have totaled around $100 million. Shortly after the Penske purchase, Rolling Stone launched the brand’s first in-house music charts, positioning the magazine as a direct competitor to Valence’s industry-focused Billboard.
On June 30, PMC launched its newest publication, Sportico, a sports-business site. Penske also holds a considerable portfolio of Indian media properties, including India.com, BollywoodLife, Cricket Country, and other brands. An acquisition of The Hollywood Reporter and other Valence properties would cement PMC as one of the most influential media companies in the world.
“Jay has quietly been building up to this moment,” says a friend of Penske’s. “This would make him the new Si Newhouse of the media world.”