Evercore Partners, which handled the sale of both Newsweek and BusinessWeek, is also overseeing the sale of Variety.
A Variety staff member who was briefed by management on the status of the sale told paidContent that 11 potential bidders have asked to see the deal book. He wouldn’t disclose who those bidders are.
Variety‘s parent, Reed Business Information, is in the midst of major transition from being a publisher of ad-supported business-to-business print magazines to being a seller of online data. During an RBI “investor day” presentation in the UK Thursday, CEO Mark Kelsey said that with the sale of Variety, RBI will have completely exited the U.S. magazine market, having divested over 150 print titles across 14 countries in 26 separate transactions, products that represented 45 percent of its portfolio as of 2008.
“We couldn’t see a compelling valuation path in line with our strategy,” Kelsey said.
Following its well-chronicled and unsuccessful attempt to sell its ad-supported print assets in 2008 in one fell swoop, RBI’s revenue and profits dropped 18 percent and 34 percent, respectively, in the media recession of 2009.
In addition to Variety, RBI’s Australian magazine operation is also up for sale. And last month, the company sold ad-supported career site TotalJobs.com to German publisher Axel Springer for a hefty £110 million ($175 million). That sale price is far bigger than what’s expected for Variety — which is expected to fetch in the range of $20 million to, at the absolute high end, $75 million.
Evercore’s Jonathan Knee is handling the Variety sale. He was also the lead banker with the sale of Newsweek, which sold for a $1 to businessman Sidney Harman, and BusinessWeek, which Bloomberg bought for a reported $2 million to $5 million. Both deals included the assumption of subscription and other liabilities, which can run into the millions.
With the selloff of titles, RBI’sl financials have rebounded nicely (see chart from Thursday’s presentation).
Since 2007, RBI has reduced its workforce from 8,200 to 5,600, cutting costs by 19 percent in the process. Meanwhile, the company’s online user base has increased from 15 percent of the total to 44 percent. Over that same 2007-2012 span, revenue from print advertising products has declined from 39 percent to just 13 percent.
As an example of RBI’s transition, Kelsey showcased Flightglobal, an aviation-focused trade publication servicing primarily Asia and Europe, which has shifted its revenue base from ad-support print to primarily online data services. Online usage now accounts for 56 percent of the brand’s revenue today while print advertising accounts for just 26 percent.
RBI didn’t break out financials for Variety. But as paidContent noted last month, the majority of that trade’s revenue still comes from print advertising, with print promotion from Hollywood movies studios, TV networks, talent agencies, etc. around the Oscars and Emmys providing the bulk of revenue.