Politico, the 14-year-old US political brand, is branching out with the acquisition this week of the B2B subscription service E&E News, whose all-digital sister brands include Energywire, Climatewire, and E&E Daily. The 22-year-old Environment & Energy Publishing LLC is believed to have revenue of almost $20m and 50,000 paying subscribers, primarily in government agencies, corporations and think tanks.
Although the terms were not disclosed, insiders said EBITDA was about $3m, so the acquisition price may be $20-25m. Both companies are based in Washington, DC.The deal is thought to be part of a wider Politico strategy to grow its professional news service. E&E News has some 65 reporters around the US and Politico also has 17 journalists focused on energy and environmental news. Owner Robert Allbritton says: “The story of our generation…is the environment and how the energy sector adapts to what needs to be done.” On a grittier level, the two companies share a need to maximise subscriptions revenue.
Arguably, E&E News also complements Politico’s troubled tech news startup Protocol which managed to launch just as Covid hit the US.
Politico was launched in 2007 by two former Washington Post executives John F. Harris and Jim VandeHei (who has since founded Axios) with Allbritton. It self-describes as “the one-stop shop for the fastest, most in-depth coverage of the White House, Congress, politics and policy…also drives the conversation through its Washington newspaper, Politico Magazine, events, and Politico Pro, its subscription-based policy news service”.
But, despite establishing a strong reputation, Politico is believed to have been rarely profitable. This may have changed this year with the high-interest Presidential election which is said to have boosted revenues by 20% to some $160m globally (80% in North America). In 2020, Politico launched no fewer than eight newsletters and products focused on sustainability and the cannabis industry. It also launched the subscription service AgencyIQ on regulatory affairs.
Morale has been further boosted by Politico’s decision not to cut pay and lay-off staff (as per most digital and print news outlets) – but to add staff. It now employs 600 in North America.
It also has almost 200 people in its €18m-revenue European joint venture with Axel Springer which became marginally profitable for the first time in 2019 – five years after launch. But, with some 40% of revenue from events and advertising, the 50:50 JV may have returned to lossmaking in 2020.
The KKR-backed, €3bn-revenue Springer – which now owns Business Insider, eMarketer, and Morning Brew in the US – looks like nothing so much as the obvious buyer of the whole Politico business when / if Allbritton decides to sell-down or quit.
