Variety has been acquired by
Penske Media and its financial backer, hedge fund
Third Point, for about $25 million,
the L.A. Times reports.
Penske, a digital media company headed by
Jay Penske, won a nearly seven-month long auction held by
Variety's British owner
Reed Elsevier, reportedly beating out billionaire
Ron Burkle and
National Enquirer owner
Avenue Capital. Santa Monica-based Penske already owns the showbiz site
Deadline.com, a competitor of
TheWrap and
The Hollywood Reporter, all of which have eclipsed the 107-year-old
Variety. The company’s portfolio also includes consumer sites
TVLine,
Movieline and
HollywoodLife as well as mobile gadget site
BGR.
Unlike its competitors,
Variety has remained focused on print, publishing a daily edition from Monday through Friday along with a weekly edition, but sales are way down from the trade rag’s heyday, while its digital iteration has failed to gain much traction. are no longer the must-reads in Hollywood that they once were.
Daily Variety's circulation as of March was nearly 28k, while
Variety's was just over 30k, according to
BPA Worldwide. Variety.com had a little over 17k paid subscribers.
Penske told Fritz he believed
Variety had faltered due to complacency, and that he intended to make it "absolutely fundamental and indispensable" to its readers in Hollywood. He hasn’t yet determined, however, what key changes he’ll make, including whether he’ll stop publishing either or both print editions. "Before we make any substantial changes, we need to spend more time with the current team," he wrote in an email to the
Times. "We need more data." But he says Deadline and
Variety will continue as separate and distinct entities, though some staffers may contribute to both. "We see an incredible opportunity for future collaboration while remaining editorially independent," he explained.
Deadline's founder and editor-in-chief
Nikki Finke won’t be involved in running
Variety. "What Nikki has architected at Deadline is simply amazing," Penske
Times reporter
Ben Fritz. "To alter or change the chemistry of Deadline would be in our opinion a huge mistake."
Combining a famous print brand with a growing digital competitor could prove potent, but Penske faces a serious challenge in
Variety. Despite several rounds of layoffs, its financial status has rapidly deteriorated in the face of shrinking ad sales. The organization still has a staff of about 120. In the last six years, profits have tumbled from about $33 million on $92 million in revenue, according to a source, to an estimated $6 million on $45 million in revenue.
"We wouldn't be buying this business if we didn't have a plan to correct the recent deterioration of both revenues and profit," Penske said. "We are not buying
Variety to gut the newsroom. We are buying the business to build it. Are there going to be changes? Yes. Do we want to reduce our dependency on print revenues? Yes. How quickly that can happen, we'll know more in the coming months."
The only immediate staff change expected is the departure of
Variety President
Neil Stiles, who oversaw the sale.
"Anyone who knows me knows I have a great reverence for things that stand the test of time," Penske said of his motives. "
Variety is a brand that the entire PMC organization respects and a publishing business that I have admired for most of my life."