The News Is NowPublic: Cit-J Site Sold To Anschutz’s Examiner.com; Price Around $25 Million

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The News Is NowPublic: Cit-J Site Sold To Anschutz’s Examiner.com; Price Around $25 Million

You’re reading it here first: After several months of trying to get the deal done, Citizen-J site NowPublic is about to be sold to a non-traditional buyer: local news network Examiner.com, which is controlled by Philip Anschutz’s Clarity Media Group, we have learned. The price is around $25 million range, according to a source, including a part of that as an earnout. Also from a source, the other potential buyers included AP, Fox News, Glam Media and even Technorati, though not clear who all were interested in late stages.

Vancouver-based NowPublic started in 2005 by Canadian entrepreneur Leonard Brody, and has raised about $12 million from investors such as Rho Ventures, Brightspark and the Working Opportunity Fund.

Clarity is the owner of Washington D.C. Examiner, The San Francisco Examiner and the Independent newspapers, and owns Examiner.com, the network of local sites in the cities it operates in. Although Examiner.com similarly focuses on citizen journalism, it has little in common with NowPublic. NowPublic has citizen reporters in 140 countries, while its new parent claims to have 13,000 “examiners” (its name for its citizen journos) in 20 markets across the U.S. At a time of sliding ad revenues, and increased interest in citizen-journalism, the timing certainly seems right for a combo.

The deal comes a few months after a management shake-up at Examiner, when after one year in the CEO seat, former AOL exec Michael Sherrod was replaced by Rick Blair, another former AOL (NYSE: TWX) alum who had worked on AOL Digital Cities.

The deal, which we first heard about in May, comes amid some notable movements in locally focused online news. In just the last two weeks, Washington Post (NYSE: WPO) shuttered its hyperlocal citizen-j project, LoudonExtra, while MSNBC.com bought neighborhood news network Everyblock. Around the same time, AOL’s local news play Patch just added two new sites under its umbrella.

The banker on the deal from NowPublic’s side was Mesa, coincidentally also the banker on our sale to the Guardian Media Group last year; Mesa also repped Mog for its recent $5 million fund raise.

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David Kaplan

@davidaKaplan Sep 1, 2009 4:00 PM ET

Posted In: Media & Publishing, Newspapers, Online News, Money, M&A & Venture Capital, Mergers & Acquisitions, Social Media, clarity media group, examiner, nowpublic

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Brady

Jeremy: If your "inside information" is as bad as your understanding of what the word "founder" means, then that explains why you somehow think NowPublic investors even got their money back on this deal.

A "founder" is someone who—starts—a company. As in, "was involved before there was a company, was involved during the forming of the company, and was around after the company was formed."

"Joining the company and bailing it out" (your words) means Leonard Brody specifically was—not—a founder.

You're right that Brody was brought in to bail out NowPublic. Instead he raised a bunch of money for it, and when it went nowhere, he gave it away for pennies on the dollar.

Jeremy C.

Wayback Machine…you think simply because someone wasn't mentioned on the site, they weren't a founder?

Brody joined the company and bailed it out!!! If it wasn't for him…they would have gone nowhere…you should check your facts.

And, I have inside information showing the 25 million for full value purchase is correct.

Accountant

$25 million isn't even close to being correct. Funny how all of the other outlets jumped on that ridiculous number. It would be sad if it wasn't so funny how wrong it is.

wayback machine

Check the wayback machine if you think brody was a founder. he is not listed as being involved with the site for the first several years of its existence.

Darius J.

Way to go NowPublic. Good for you guys…great company and a great landing.

Jeremy C.

These comment trails are always so ridiculous. Firstly, Leonard Brody was absolutely the co-founder of NowPublic and an investor.

So many haters…so childish. Just be happy for these guys and move on.

I am an investment banker in LA and have it on good authority that the amount quoted above is correct. Nobody got duped. Dave Kaplan knows his stuff…and has good sources.

Stop hating and go build your own companies…armchair critics.

Peter

The investors got the few million in cash that remained back and the founders got a small earnout. Clarity Media isn't stupid. Whoever from the NP side that fed you your information has apparently succeeded in pulling wool over your eyes.

Tomas R

Leonard Brody never started anything more than an argument. He did not found NowPublic.

Greg M

NowPublic is yet another example of a startup that over-capitalized and under-delivered. NowPublic was founded as a 'Citizen Journalism' site that promised (according to CEO Brody) it would be doing $90 million in revenue by 2010 by licensing out 'original citizen-generated news footage'. NowPublic totally and completely failed to execute on that vision, and then CNN's iReport came along and flicked NowPublic into irrelevance like a mosquito. Once NowPublic realized they were a failure and essentially had to figure out a new path to appease angry investors, they decided to try their hand at becoming a Digg-clone/aggregator for mainstream news content. Again, an utter failure. Give credit to whomever negotiated the Examiner.com exit for NowPublic. Selling rubber dogshit is not easy, and that's exactly what NowPublic was when it sold.

steve

"embargo"???

wtf

news is a process not a finished product anymore.

if you old school geniuses want to correct the price, etc., then have at it.

Henry Scott

Puzzling. What is it that Clarity Media, owner of Examiner.com, thinks it is buying? NowPublic is composed almost entirely of stories copied from MSM with comments added by the likes of Marge of Little Rock who says: "Isn't this cute," or "Isn't this outrageous."
Do people, other than friends of Marge, really have time to read this stuff, much of which is posted well after it is already available on MSM online sites? I'm betting that even friends of Marge groan when she asks if they're reading her postings.
And with all the efforts by newspapers, etc., to erect paywalls around their content and by Attributor to track where it's used and exact a payment, will even the Marges of the world be able to continue to ply their craft, if that's what you want to call it?

Paul P.

If you are going to "break it", at least don't plug in a phony inflated price then. This company has been begging to be acquired for a year now, and the price range you printed is not even in the ballpark.

The fact that Technorati was mentioned should tell you something. Ask yourself how much cash they have. And the AP? They are a non-profit organization for crying out loud.

Time to revisit the two source rule?

David Kaplan

There was no violation of any embargo, "Jim." We had been working on this story since May and did not participate in any arrangement with the PR firm that other media outlets may have been party to. We broke it on our own.

Jim

"Youâre reading it here first"

I'm not sure a media publication should brag about breaking a story first when it showed a complete lack of ethics and violated an embargo to make it happen.