Verizon and Hearst acquire Complex Media; Yahoo earnings may bring sale update
Morning Brief: The list of bidders for the assets of Yahoo may be revealed this afternoon duringthe company’s earnings conference call, with Verizon, YP Holdings and the PE firm TPG among those reportedly still interested
The pursuit of a larger audience of younger readers/viewers has been behind a series of acquisitions by Meredith and Time Inc. Yesterday, Verizon and Hearst announced that they had teamed up to acquire Complex Media for the same reason, to reach millennials.
“The decision to acquire Complex is certainly a continuation of our media strategy, which is focused on disruption that is occurring in digital media and content distribution, and involves building a portfolio of the emerging digital brands of the future for the millennial and Gen-Z audience,” said Brian Angiolet, Verizon’s senior vice president of consumer product and marketing.
“Complex’s smart, fresh content aims squarely at the ever elusive young male demo and drives unparalleled engagement with that audience across every social channel,” said Neeraj Khemlani, co-president of Hearst Entertainment & Syndication. “Complex also represents the acceleration of Hearst’s growing partnership with Verizon, which has unparalleled ad, video and mobile technology, and an appetite to build together the digital video networks of the future.”
The deal was valued at between $250 million and $300 million, and combines the two things traditional media companies have been coveted: video content and a younger demographic. Of course, what is lost in the M&A euphoria is that to make these deals work the acquiring parties must also be able to do two things: prove they can monetize the audiences acquired, and hang onto the talent acquired.
Complex was originally founded in 2002 as a bi-monthly magazine by fashion designer Marc Ecko. It evolved into Complex Media in 2007, growing its digital assets. Complex TV was launched in 2012, bringing online video content into the mix.
Yahoo reports earnings today after the bell, the first of the media companies TNM regularly follows. Today’s report will be particularly interesting because yesterday was when first bids to buy the assets of Yahoo, minus its Alibaba stake, were due. Reports are that few of the companies tied to a Yahoo bid decided to venture into troubled waters.
One of the more interesting potential bidders that has emerged is YP Holdings LLC – yep, the Yellow Pages. As crazy as a bid from a company as old school as YP Holdings sounds at first, it begins to make sense when you realize that YP Holdings is majority owned by the private equity firm Cerberus Capital Management. That makes money a non-factor, as well as common business sense.
Various sources report that the other two players identified are Verizon and the San Francisco-based private equity firm TPG, both of whom seem like logical buyers.
Of those not reportedly interested, or not confirmed to have bid, are Time Inc. and the Daily Mail.
As for Yahoo earnings, those who did bid may well regret expressing any interest after the company reports after the bell this afternoon.
Apple has confirmed that its annual Worldwide Developers Conference will begin on June 13 in San Francisco. Tickets are priced at $1,599 and developers are able to to apply via the WWDC website until this Friday at 10 a.m. PDT.
Yesterday the Pulitzers were announced, and as during the Oscars, journalists couldn’t concentrate on anything else. Late last week a survey found that fewer than 20 percent of US adults still subscribe to a print newspaper, so I suppose one would be accused of being a party pooper for mentioning that few people who consume news in the country really cares who wins what at this time of year. Well, sorry I mentioned it.