The Onion Retains Adviser for Possible Sale

Founded by University of Wisconsin Students in 1988

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Onion Inc., owner of the satirical news site the Onion and the entertainment site the A.V. Club, has hired a financial adviser for a possible sale, according to people with knowledge of the matter.

The company, which calls itself "America's Finest News Source," is working with the investment bank GCA Savvian, said the people, who asked not to be identified because the deliberations are private.

Steve Hannah, CEO of Onion, confirmed the hiring of a financial adviser in a memo to his staff obtained by Bloomberg. He said the adviser has been handling inbound inquiries for both investment partners and potential buyers of Onion.

"We have had follow-up conversations with numerous parties in recent months," Mr. Hannah wrote. "Our advisors will continue to have those conversations and, hopefully, they will lead to the right outcome."

Onion can use its brand to capitalize on money flowing into Web media from traditional outlets. Funny or Die, the comedy website co-founded by Will Ferrell, recently hired Moelis & Co. to advise on strategic options. In May, Walt Disney Co. paid $500 million for Maker Studios, while Vice Media raised $500 million in September selling 10 percent stakes to Technology Crossover Ventures and A&E Networks.

Print declines
Founded as a magazine by a pair of students at the University of Wisconsin at Madison in 1988, the Onion is now published only online, with several websites and YouTube channels that blend written satire with humorous videos. David Schafer, a fund manager, bought the company in 2003.

The Onion moved into online publishing and video as advertisers did the same. The company stopped printing its flagship weekly magazine last year and expanded into video production several years ago, founding a daily Web broadcast called Onion News Network and then a companion sports show.

"We didn't do anything brilliant, we saw it coming," Mr. Hannah said in an interview with Bloomberg Television last year. "Print was beginning to decline. We got ahead of the game and decided to go all digital all the time."

The Onion turned its original news shows into a TV show for IFC, and also produced "OnionSportsDome" for Comedy Central. Both shows have been canceled.

Google's YouTube offered the company an additional outlet. The Onion's channel, home to spirited movie reviews and a parody of reality TV called "Sex House," has 766,455 subscribers. Onion also operates channels for the A.V. Club and Clickhole, a subsidiary site that satirizes websites like BuzzFeed and UpWorthy.

The company relocated its editorial operations to Chicago from New York two years ago.

~ Bloomberg News ~

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