Internet entrepreneur Jay Penske has agreed to buy Variety magazine from Reed Elsevier to add the entertainment trade publication to his stable of websites such as Deadline Hollywood and Movieline.
Reed Elsevier is selling the 107-year-old magazine as the company refocuses on electronic data services and research offerings, the two companies said in a statement today, adding that they won't disclose the deal's financial details. The purchase price is about $25 million, said a person familiar with the matter who declined to be identified because the information is not public.
Mr. Penske, son of automobile-industry executive and race team owner Roger Penske, founded his Los Angeles-based Penske Media Corp. in 2004 and has been expanding his entertainment news business to tap demand for gossip about celebrities and the movie industry. In 2009, he bought Deadline Hollywood, founded by former Los Angeles Times reporter Nikki Finke, and in 2010, he purchased Boy Genius Report, a technology blog focused on mobile gadgets.
"We plan to rapidly build upon Variety's foundation, while extending this invaluable brand's presence across web, broadcast, mobile and international markets," Mr. Penske said. A Reed Elsevier representative declined to comment on the purchase price.
Reed Elsevier, the London-based publisher of "Gray's Anatomy" and the LexisNexis database, has been disposing of trade magazines as print media declines and is focusing on online subscriptions, research products and products that compile and analyze electronic data.
Reed Business Information, the unit publishing Variety, had revenue of 347 million pounds ($556 million) in the first half of 2012, representing 11% of the whole company's revenue. The sale of magazines and costs helped the division to reach a record operating profit margin of 18% in that period. The company, which acquired Variety in 1987, this year also put its Australian business on the block.
The company ended efforts in 2008 to sell its trade-magazine unit, which once published more than 400 titles, after bids for the business declined amid economic uncertainty. Since then, the company has sold titles piecemeal, including U.S. publications Publishers Weekly, Broadcasting & Cable and Multichannel News. CEO Erik Engstrom said in July that the business now has fewer than 100 titles.
"We're now focusing on organic growth and selective acquisitions in online paid content services," Mark Kelsey, CEO of Reed Business Information, said today.