After its first attempt to sell Variety flopped in 2008, Reed Business Information is doing an encore.
RBI parent Reed Elsevier has placed Variety, its century-old entertainment industry brand, on the block. RBI CEO Mark Kelsey was quoted in a story on the Variety website as saying: “With RBI's increasing focus on data services, and the sale of our other U.S. print magazines, it now makes sense for us to sell the business. Variety has an incredibly talented team who have successfully innovated and expanded the franchise in industry news and analysis. I have no doubt the business will continue to thrive under new ownership.”
RBI first attempted to sell Variety along with a host of other trade publications four years ago, but the recession prompted it to pull back. In 2010, when RBI returned to market with its trade publications in an effort that yielded mixed results, it decided to hold on to Variety.
Industry observers say the improving market for b-to-b properties has likely enticed RBI to try again to divest itself of Variety. Regarding the outlook for a sale, Reed Phillips III, managing partner of DeSilva & Phillips, said, “The market seems to be rebounding along with the U.S. economy. The pool of potential buyers is much larger today than any time in the past three years.”
Mike Parker, managing director of AdMedia Partners, said, “I think Reed Elsevier has decided it doesn't want to be in the magazine business anymore.”
Like most b-to-b publications, Variety has faced falling ad pages and new competition, such as online entertainment industry sites Deadline.com and TheWrap.com.
It also continues to battle its traditional competitor, Prometheus Global Media's Hollywood Reporter brand, which has hired Janice Min as editorial director. That move is part of an effort to attract more consumer advertising, which has met with some success, Parker said.
Variety made a similar effort to attract consumer advertising several years ago, but abandoned the initiative for the higher CPMs of b-to-b advertising.
Most industry observers say Variety, whose flagship magazine debuted in 1905, remains a blue-chip brand. It is one of the few b-to-b media brands to have a paid content model for both its print publication and its website. Last year it introduced new online features such as its breaking news blog, Showblitz. Variety has expanded into conferences and will produce more than 30 events this year. And as part of its strategy to provide more data tools, in June, it acquired TVtracker, a research company that follows U.S. filmed entertainment.
Estimates of how much Variety might fetch in the current market vary, with $10 million to $25 million being the most common range offered by industry observers. At an EBITDA multiple of between 5x and 7x, Variety's EBITDA is estimated to be $2 million to $4 million.
Variety President Neil Stiles was quoted in the same story on the brand's website as saying: “I have every confidence that, under new ownership, Variety will continue to thrive, innovate and provide fantastic insight into the sector.”