Penske Media Corporation, the owner of Nikki Finke's Deadline Hollywood, has finalized a deal to purchase Variety -- a digital age story of a blog buying Hollywood's oldest trade paper in a bid to reverse the print publication's declining fortune. Deadline reported the sale.
The purchase price for the 107-year-old paper was not disclosed, but Reed Elseiver had for months struggled to sell Variety. The print publication's public profile and revenues have declined precipitously over the past five years.
Successive bidders had circled the asset, only to walk away from Elsevier's asking price of $40 million.
The price paid by Penske, ultimately the last bidder standing, was believed to be about $25 million. Reed Elsevier continually lowered its price, and then offered financing to the buyer, according to knowledgeable individuals.
Among the prospective bidders who ultimately quit the auction were Ron Burkle Marc Lasry's Avenue.
Penske purchased Deadline in June 2009 for a reported seven-figure payout to Finke, the site's founder as well as its sole editor and writer, plus a lucrative five-year employment contract.
The prospect of Hollywood's most vituperative journalist being brought into the same family as the controversy-averse trade publication struck many as an awkward union.
Finke had been pushing hard for Penske to buy Variety, according to individuals with knowledge of the deal. But her role at the Penske-owned Variety remains in question.
Finke does not appear in public and her interpersonal skills notoriously involve dressing down executives, threatening rivals and publicly brow-beating colleagues who win her disfavor. (When her own publisher Lynne Segall left to The Hollywood Reporter, Finke published a column suggesting that Segall had worsened the blogger's diabetes.)
Finke could not be more different than Variety's current editor Tim Gray, a mild-mannered and accommodating veteran of the trade.
Less than a decade ago Reed Elsevier put Variety on the auction block along with a group of more minor trade publications for $2 billion, but ended the sale when the bidding did not surpass $1 billion. In the interim, advertising has collapsed for many print publications, and Variety has faced stiff competition from digital rivals including Deadline and TheWrap, who have taken market share and proven more editorially aggressive.
It is unclear whether the two brands will merge, but other Penske properties share content across their different channels -- Deadline often links to movie trailers released on Penske's YouTube channel, ENTV.
Also read: Variety Bleeds Talent, While Newsroom Morale Suffers
The Inglewood-based owner of Deadline and six other digital properties, including India.com and MovieLine, partnered with private equity firm Shamrock Capital Advisors to buy Variety.
Shamrock did not respond to calls and emails from TheWrap requesting comment.
Bidding for Variety started in the late spring and went through the summer before the 33-year-old Jay Penske, the eponymous CEO and son of automotive tycoon Roger Penske, finalized the deal.
Billionaire supermarket magnate Ron Burkle withdrew his offer in late August, the New York Post reported. Then, New York-based hedge fund Avenue Capital, owner of the National Enquirer, dropped out.
Both had reportedly offered less than $25 million.
The oldest of the Hollywood trades, Variety has been struggling with declining advertising and circulation for several years.
Also read: What’s Variety Worth and Who Will Buy It?
Besides facing increased competition from younger publications like TheWrap and Deadline, Variety has also had to compete with long-time rival the Hollywood Reporter, which relaunched its website and folded its daily print editions, launching a glossy weekly in its place.
Variety remains a profitable enterprise, despite struggling to compete in the 24/7 news cycle.
TheWrap has reported Variety is believed to earn $45 million in annual revenue and $6 million to $7 million in profit. But that is about half of what the trade brought in a decade ago.
In its heyday in the 1990s, Variety earned 30 to 40 percent profits, with annual revenues that once reached $90 million.
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