Comments on: Why Variety’s street value has plummeted in 4 years

By: Daniel Frankel

Daniel Frankel — Mon, 09 Apr 2012 16:43:04 +0000

In early 2008, Variety was part of a group sale that also included sibling pubs like Broadcasting & Cable as well as various construction trades. Reed Elsevier was looking for bids in the range of $2 billion. The bid was never successfully rendered, so many of those other books were sold off piecemeal. The crown jewel of the offering, Variety, was kept around until the market recovered. Now, some analysts are projecting a low-end sale price of $20 million for the stand-alone property. Taken too literally, it is indeed an apples-and-oranges comparison. But we are talking about the prime asset in that original group offering. I think it’s safe to assume that, valued on its own, Variety didn’t comprise just 1% of Reed Business Information’s worth when it was put up for sale in 2008 (i.e. $20 million of a $2 billion price tag). Call it an inelegant comparison (others have!) — but the value range being bantered around by analysts — $20 million – $75 million is what I have seen — would have been considered inconceivably low in 2008.

By: Peter Slate

Peter Slate — Fri, 06 Apr 2012 14:17:30 +0000

Daniel, please explain the $2b vs $20m that George pointed out.

By: Graham

Graham — Wed, 04 Apr 2012 17:25:10 +0000

Solid analysis from someone who has worked in the trenches.

By: Jojo

Jojo — Wed, 04 Apr 2012 16:02:55 +0000

I agree with you, this piece is pretty much pure gar-baj. Mr. Frankel’s defense below, in which he does nothing to refute your dead-on criticism of his $2 billion vs. $20 fiasco of a comparison, and then lamely questions your motives, is even worse.

By: Daniel Frankel

Daniel Frankel — Wed, 04 Apr 2012 15:18:08 +0000

This is not so much a criticism of Variety as it is an analysis of too much competition emerging in one sector emerging too fast and driving down prices. Among sources, I talked to five studio marketing executives who make trade-ad purchasing decisions (two are quoted, and no one wanted their name in the story, as is typical in Hollywood). I disclosed fully that I worked in the Hollywood trades. Given your emotional reaction to this post, I am curious as to your affiliations, however.

By: yessa

yessa — Wed, 04 Apr 2012 14:56:50 +0000

what a great analysis! as long as Danny waits until the NINTH paragraph to disclose that he got laid off by the same company he coincidentally happens to be trashing in this “article,” that’s totally ethical. So are the anonymous “quotes.”

One can only hope GigaOm buys Variety too given the wisdom of keeping Paidcontent under the oversight of the same editors who have steered this towering achievement in journalism so brilliantly in the past and hired an impartial genius like Danny. Surely Reed Elsevier would never even consider selling Variety were he still there…as opposed to ax-grinding here about getting shitcanned.

By: George

George — Wed, 04 Apr 2012 01:59:59 +0000

This is bad journalism from the first sentence to the last. Your article starts with the misleading statement that Reed attempted to put Variety on “the auction block” then couldn’t find a buyer willing to pay $2 billion for Variety and “a handful” of Reed’s other ad-supported U.S. publications. You then state “some analysts” project a $20 million price and ask how the price could drop so much in four years.
The facts are that Reed Elsevier put the entire Reed Business Information U.S. B2B publishing business up for sale- an immense business at the time with hundreds of millions of revenue -and decided NOT to include Variety in the process. The $2 billion it sought was for the company-sized RBI U.S. business unit, not Variety. So, even if the $20 million price projection of your unnamed analysts is close to being right, your attempt to compare that price for the sale of a single title to a $2 billion price for an entire company is simply ridiculous. This shows a lack of honest, intelligent journalism on your part.

Instead of doing your homework and reporting honestly on this potential sale, you then take us through a narration on your view of the competitive scenario laced with a few gratuitous quotes from two (or maybe three) unidentified executives. You quote a marketer from “an independent distributor”, then “another studio marketing executive”, then “the second studio marketer” (without having identified the first) and then in your last sentence you quote the “first executive”, leaving us to wonder whether that’s the independent distributor or the first studio executive that you actually never quoted anywhere else in the article. So in addition to dishonest and unintelligent business reporting, you couldn’t find a single person in Hollywood who was willing to be quoted about Variety? So, maybe lazy journalism should be added to the list.

I think the key words in the entire article are about the staff cuts at Variety which you state “claimed my job”, because, while this article reads at times like a takedown piece from a competitor, in the end it just sounds like a screed from a disgruntled former employee. This piece is so bad I had to re-read the date because I thought it was an April Fool’s joke I was laughing so hard. No such luck. If this is indicative of what you wrote for Variety (and the Wrap) it’s no wonder there isn’t a place for you there any longer.