It’s just been announced that Penske Media Corporation (PMC) has bought Variety, one of the entertainment industry’s best-known long players. Although financial specifics have not been disclosed, the deal is reportedly worth around $ 25 million.
As reported, PMC bought Variety from Reed Business Information, parented by Reed Elsevier. Negotiations for the deal began in March of this year when RBI put Variety up for sale.
Once considered a movie and theater industry trade bible, 107-year-old Variety saw its domination of the market deteriorate over the years as competitors like Deadline, The Hollywood Reporter and other outlets ate away at its supremacy.
In an email interview today, PMC owner, Jay Penske, 33, told the LA Times that he had no plans for major lay-offs of Variety staff:
“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 can that happen? We’ll know more in the coming months.”
Penske, son of NASCAR legend, Roger Penske, has become something of a media lightning rod in the 9 years of PMC’s history. After selling his first company Mail.com, Penske became a major player in digital media, acquiring Deadline from Nikki Finke, later MovieLine, before launching Hollywood Life and TVLine. The Variety buy underlines Penske’s reputation for savvy business chess.
Admitting to the LA Times that the Variety deal took “much longer than we expected,” Penske qualified, saying, “we couldn’t be happier in its outcome.” Asked what he thought went “wrong” at Variety, Penske was blunt:
“I strongly believe that Variety got too comfortable thinking they had the unconquerable No. 1 brand and a broadsheet that everyone HAD to read. And during those years it stopped investing in its brand, and started to lose some of that brand equity.”
“And even more importantly … Variety should have invested further in its editorial team, specifically highlighting and platforming their leading voices and talent, while exposing them to other new platforms. Comparably, this is something that we have excelled at with Deadline, where an entire industry knows four of our editors by their first names only, Nikki, Mike, Nellie, and Pete.”
Words that may hearten Finke, often on the receiving end of Twitter baiting from certain Variety writers and, who, The Wrapreports, “had been agitating for weeks to get Penske to buy the trade for her to run.” [Note: Finke has since refutedThe Wrap article as, "a complete fabrication."]
Mike Fleming, a former Variety journalist who now works at Deadline, commented on the deal, writing:
“I’ve thought a lot about the possibility this deal would close and I’m sure my former colleagues and the newer staff there will be understandably apprehensive. This is a bit jarring for me.”
Adding, that at Variety, he was:
“A print snob who tried to nest on my exclusives and who thought trees had to die for me to be relevant. Nikki proved that a fallacy by building a dominant brand from the ground without killing a single tree. Too often, she would kick my butt up and down Wilshire Blvd by moving faster than I ever could at Variety.”
It’s thought one of the first things to change at Variety will be its prohibitive paywall. Certainly Penske’s public welcome to Variety indicates changes at his latest acquisition will be far-reaching.
“We are thrilled to welcome Variety and its exceptional team into the PMC organization. As part of this significant acquisition, we plan to rapidly build upon Variety’s foundation while extending this invaluable brand’s presence across the web, broadcast, mobile and international markets.”
For her part, the still vacationing Finke posted this message on Twitter:
“I will post soon re PMC/Variety. It’s a proud moment for Jay Penske and myself. The best is yet to come in entertainment trade journalism.”
An industry inhales.