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Whoever ends up buying Variety will have to make up for “a decade of deferred maintenance” after they’ve coughed up $40 million or more, said a media executive who recently kicked the tires on the venerable trade pub’s sales book.

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As the field of buyers for Variety narrows, we’re getting a clearer picture as to what it will take to make a deal — and to remake Hollywood’s signature trade publication.

Forget any notion of a $1 fire sale.

Several individuals who have checked out Variety‘s sales book recently told us that, despite a rather dramatic reduction in Variety‘s valuation in recent years, whoever ends up buying it will still need to come up with cash well beyond the currently reported upper-$30 million bidding range.

“That $40 million is a pretty considerable amount of money, but the problem is you’re not done at $40 million,” said one knowledgable individual, who spoke at length to us. “You’re buying a property that’s had a decade of deferred maintenance. Whoever underwrites this is going to have to do this with a plan of investing significantly post-purchase.”

(First, some disclosures: The writer of this post previously worked for Variety and TheWrap, one of Variety’s perspective purchasers. And Variety parent company Reed Elsevier is an investor in paidContent parent GigaOM through its Reed Ventures arm.)

So just how significant would that investment be?

Also read: Why Variety’s street value has plummeted in four years

That’s tough to estimate, since so many of Variety‘s costs — from legal services to technology infrastructure — are woven into the other assets of parent company Reed Business Information.

“Until you’re actually in there, you can’t tell what they’re providing and whether the charges are comprehensive,” the individual said. “There’s always a bunch of risks when you don’t have a balance sheet that takes the parent company out of the equation.”

And while Variety‘s book still reports what this industry source termed as “modest profitability,” the margins aren’t thick enough to overcome the haziness of the cost situation. “It’s really hard to determine what actual profitability would be if you bought it,” he said.

Also read: Investment bank Evercore readies Variety sale

Significant cost reductions are also hard to envision, he added: “They’ve been aggressively cutting for the last six years.”

Variety president Neil Stiles declined comment, while the investment bank overseeing the transaction, Evercore, has not yet responded to our inquiry.

Last week, the New York Post reported that Variety‘s bidding process has reached an advanced stage, with billionaire Ron Burkle, a notable investor in supermarkets and retail operations with a recently acquired taste for Hollywood assets, leading a small cadre of prospective buyers who have been invited to participate in the final bidding rounds.

Also invited, according to The Post, were the operators of the Hollywood trade blogs that have sprung up recently to challenge Variety — Jay Penske’s Penkse Media Corp., owner of the Nikki Finke-led Deadline Hollywood,  and TheWrap, led by Sharon Waxman.

Both digital companies can make the case that they know the showbiz trade business, which generates most of its revenue around studios, production companies, TV networks and talent agencies promoting their assets for big awards shows. In fact, it’s been the introduction of these blogs that have helped to dramatically thin Variety‘s once robust profit margins.

But for a company like TheWrap, which takes in only a sliver of the revenue Variety still brings in, coming up with well north of $40 million will require the help of its investors. Loans can’t be made without a guarantee from those backers, our insider explains.

Even with such backing, he said, “Based on the inherent strength of Variety, you can’t borrow a lot of money. I’d be surprised if you could borrow even $10 million.”

Backers, he said, would need to dip deeply into their own pockets to come up with the rest of the money. “Reed doesn’t care,” he explained. “To them, it’ll all be cash.”

Since its founding in January 2009, TheWrap has been funded with $3.5 million through seed, and Series A and B rounds by Maveron, the private equity firm established by Starbucks impressario Howard Schultz. Maveron has not put any additional money into TheWrap in over two years, however.

Given TheWrap’s notoriously high staff turnover rates, would private equity backers and banks — not to mention Reed — really turn the keys to a big, century-old and still widely revered publication like Variety over to Waxman?

If the right backers step in and make a big enough commitment, Waxman’s management accumen could be inconsequential, our knowledgeable source indicated.

Besides, he added, a minnow like TheWrap can safely participate in the sale process of this much larger fish without getting in over its head, since the Variety bidding process likely doesn’t include any “break-up” penalties.

Waxman did not respond to our inquiry for comment.

But what about Penske?

Ending in 2008, his Penske Media Corp. had raised four rounds of funding worth $35 million, and his portfolio now also includes a host of other digital properties beyond Deadline, including the Bonnie Fuller-led Hollywood Life and TVLine, which is headlined by TV reporting ace Michael Ausiello.

“Penske has enough access to capital and credibility that he could persuade people he could run this thing, but if Ron is interested, it’s game over,” the source said. “Burkle is the only one who can get this done without making any phone calls. Everyone else is going to have to finagle things.”

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