The 17-year-old, privately-owned Penske Media Corporation is believed to be negotiating to acquire The Hollywood Reporter and perhaps also its stable-mates Billboard and Vibe. The potential deal would make Penske, which owns Variety, Deadline, Rolling Stone and Music Business Worldwide, the B2B leader in the entertainment industry.
The unconfirmed “early stage” negotiations highlight the rapid growth of Jay Penske’s company which has spent some $250-300 million on at least 13 acquisitions in the past decade. The PMC portfolio includes WWD (formerly Women’s Wear Daily), SheKnows, Robb Report, Gold Derby, IndieWire, BGR (Boy Genius Report), Sourcing Journal, Hollywood Life, and Sportico.
Penske is the son of celebrated US racing driver Roger Penske who is founder and chairman of the $4 billion Penske Automotive Group best known for car sales and truck rental.
Jay Penske was founder of Mail. com, an email portal which he sold to United Internet, of Germany, for €50 million in 2010. He also co-founded Firefly, creator of mobile phones for children (complete with “Call Mom” and “Call Dad” buttons), owns Dragon Books (an LA-based antiquarian bookseller) and one of the founding Formula-E teams (the electric Formula 1 series). But his focus on building a media business began in earnest with the 2009 acquisition of Deadline, Nikki Finke’s influential Hollywood blog.
It has proved to be a trademark approach to acquisitions. Penske invested in expanding the Deadline content and (despite a long-running feud with Ms Finke), it became the centrepiece of the fledgling Los Angeles-based company.
PMC has continued to grow principally by acquiring marquee business and “prosumer” magazine brands with international growth potential in information services and events.
It is now a $500 million-revenue media and information company with 22 digital and print brands, a claimed monthly audience of 250m worldwide, and offices in 12 countries.
For a none too shy media proprietor, Penske is surprisingly reluctant to give interviews and his people seem to be looking over their shoulders when they discuss him. But he is an inspirational, energetic and popular leader among those in the business who know him best. That includes the whole Rolling Stone team with which Penske had One2One meetings when he acquired the magazine. Some had never met their former boss, founder-owner Jann Wenner in years.
But there have been bumps in the road.
Penske’s 2018 decision not to return the $200m investment he had received from the Saudi Arabian Research & Marketing Group (SRMG), after the murder of journalist Jamal Khashoggi, worried journalists everywhere.
SRMG has a c20% shareholding in PMC. Penske recently bought back the 20% shares held by the Third Point hedge fund after it had backed the $30 million acquisition of Variety. That now leaves Jay Penske with an estimated 70-80% of the company where he is Chairman and CEO.
One former executive says: “Jay’s going to work harder to prove he earned this than anyone else in this situation. He has that in his favor. It also seems like he has a lot more money in his favor. He runs his titles for profitability. I think if he plays his cards right, he can go from a B player to an A player.”
The “founder’s letter” on the corporate web site has the usual ra-ra but, behind the chutzpah is a company with a track record of investing in content and design. Pre-Covid, this was a publisher which (in addition to consistently buying long-established print-centric brands) had actually been adding journalistic jobs. The revitalisation of Rolling Stone and WWD (each bought for some $100 million) illustrate how Penske has been able (as one reporter put it) “to infuse legendary brands with sex appeal and financial promise”.
The changes have been real. The print edition of Rolling Stone is now monthly, has broader content than the baby boomer stuff of readers’ parents, and has recruited established commentators to rebuild its reputation for serious political coverage. The angry child of the 1960s has come right up to date.
The launch of its own record charts (to compete with the long-standing Billboard 100) was bold innovation. Jay Penske said: “PMC’s strategy is to constantly evolve our brands and products across media platforms. What’s imperative and exciting about our new Rolling Stone Charts is that they will present a transparent, granular and real-time quantification <ie daily updates rather than weekly and more focus on streaming> to accurately reflect listeners’ evolving interests and give insight into worldwide trends”.
PMC’s launch, in June, of the information and events platform Sportico not only marked the company’s entry into the $500 billion sports industry but also probably its largest organic development, although last year’s expansion of WWD and Variety in China were significant too. Penske also holds a portfolio of Indian media brands, including India.com, BollywoodLife, and Cricket Country. His investment this year in the London-based Music Business Worldwide is expected to lead to further UK acquisitions.
All the signs are that Penske is still seeking major acquisitions to grow its portfolio, especially internationally. The potential shopping list may look something like this:
Fashion & Luxury: Penske must covet WGSN, the brilliant global fashion trend forecasting business which accounts for almost 30% of the UK’s Ascential Plc. Maybe Penske will, therefore, want to acquire Stylus Media Group, the £10-15million-revenue lookalike launched by Marc Worth four years after he had sold WGSN for £140m in 2005. Hearst paid a rich $9 million for a 20% share in Stylus 2012, so perhaps it would willingly walk away – or buy the company itself. As Vogue Business seeks to muscle into this high-priced subscription space, these are the companies Penske will want to buy or beat.
Media & Entertainment: After Hollywood Reporter, the potential targets may include: Advertising Age (Crain Communications) and Adweek, of the US; the £50 million-revenue Centaur Media (UK publisher of Marketing Week, Influencer Intelligence, Fashion & Beauty Monitor, and The Lawyer); the £11 million-revenue Media Business Insight (Broadcast and Screen International magazines); and Campaign, the Haymarket-owned marketing services publisher with digital editions across the US, Asia and the Middle East.
Sports: Penske must have plenty of things it would like to discuss with the Newhouse family’s Advance (notably some of those legendary but under-profitable Condé Nast magazines). But, following the Sportico launch, PMC must be particularly interested in Advance’s Leaders Group Holdings. The newish subsidiary (under former Gartner boss Warren Thune) brings together Sports Business Journal, Sports Business Daily, Esports Observer and Newzoo, with a brief to develop market intelligence, analytics, networks and events. Jay Penske is watching and says: “Sport enables us to complement our technology, entertainment, art, music, fashion, media and lifestyle properties.”
Beyond those major sectors, you might expect Penske to be interested in owning Forbes, Monocle, and even Sports Illustrated that he missed out on in Meredith’s auction of unwanted Time Inc assets. They’re his kind of brands.
Eleven years ago, when Jay Penske acquired Deadline, one of his colleagues said: “He wants to be a modern day Si Newhouse, he wants to have a glamorous publishing company.”
Like Newhouse, Penske has the appetite for investing in original content and spending big on famous brands and well-known talent. Another glossy story is being written.
