The sands keep shifting under media professionals who thought they knew what they were doing.
During my two year stint at Variety, the print product ruled and the venerable 107-year-old trade was accustomed to raking in millions at the top of the trade media heap. The Variety chiefs looked down their noses at also-ran Hollywood Reporter and Deadline’s Nikki Finke, who was seen an easily dismissable “blogger.”
To stay afloat as recession ad revenues plummeted, Variety slashed its most expensive name columnists and critics (including me) in favor of cheaper less-known writers and print support staff as it went behind an unforgiving pay wall and continued to churn out five print dailies plus one weekly edition.
Meanwhile under editor Janice Min, THR cut its print daily in favor of a consumer-friendly weekly, and surged ahead of Variety. Screen International restrained its print output to a monthly and took its daily online, while online trades the Wrap and Deadline mounted print Oscar editions for additional ad revenue. And Indiewire grew traffic with its smart trade/consumer demo and burgeoning blog network (including TOH), while retaining its online-only identity.
Now word on the street has Deadline owner Penske Media Corp. ready to acquire Variety for some $30 million–more than bidder New York Hedge Fund Avenue Capitol. No longer in the running is supermarket mogul Ron Burkle. Jay Penske, 33, is reportedly partnered with private equity fund Shamrock Capital Advisors. Just months ago Variety was thought to be worth $50 mlllion, which was still substantially lower than its pre-recession peak value.
The question is what Penske plans to do with Variety, a hidebound institution that until now has kept its distance from the kind of traffic-chasing economics that Penske lives by–he also owns Movieline, which has been trying to find its purpose, as well as Bonnie Fuller’s breathlessly lucrative celeb site HollywoodLife.
Penske Media would operate Variety, which is essentially occupying the same space as rival Deadline, which poached experienced trade vets Michael Fleming and Nellie Andreeva after Finke sold her blog to Penske in 2009. Penske bet on stars with talent–the opposite approach taken by Variety.
I continue to be astonished that the LAT was willing to let Geoff Boucher leave for a senior writer gig at EW, which will continue to promote his stardom as he pursues several entrepreneurial opportunities on the side. The LAT has already seen a precipitous traffic drop since Boucher left The Hero Complex blog, from over 100K page views a day to under 12K. Various in-house folks will fill in at the blog.
Meanwhile, word is that another media star, fresh-faced 18-year EW vet Dave Karger, an Oscar expert and frequent TV commentator, is heading over to Fandango to burnish his talking head credentials.
Compared to Variety, Deadline’s operation is lean and mean in more ways than one. Finke fiercely pursues breaking news by punishing those who dare to take their stories elsewhere. She plays hardball with industry insiders in a way that the friendlier trades would never do. That’s why she’s an industry must-read.
Will Penske put both brands under one bigger roof? The economies of scale that Finke lives by are one reason she is so successful. Variety has no clue how to function the way she does.
Buying Variety does present one possible solution to Penske’s ongoing dilemma: how to keep Finke’s online hard news goldmine going while not alienating potential ad buyers for softer features and Oscar print issues? He could divide the two entities so that Finke’s Deadline is an online breaking news operation while Variety would function as a softer print trade revenue producer, complete with Pete Hammond’s awards mongering. Edited nuggets from the online content could add value to a weekly print edition. Freed from paywall prison, Variety’s huge online archives would add to the mix as well.