Publishers Are Paring Down Their Portfolios Following Pandemic M&A

You won’t be alone if, flush with money through the doldrums of the pandemic, you spent an excessive amount of cash on one thing you by no means really wanted—within the final month, a number of media firms have felt the identical approach.

On Wednesday, Vox Media introduced it will spin off the social video writer NowThis, which it acquired in December 2021 after shopping for Group 9 Media in an all-stock deal.

The information follows the same announcement from Recurrent Ventures, which on Monday offered its meals and beverage property Saveur again to its longtime editor after buying the title in 2020. And final month, G/O Media offered its property Lifehacker to Ziff Davis, a shuffling of its portfolio prompted by its buy of Quartz early final yr.

Taken collectively, the spin-offs mirror a sober reassessment of purchases made through the frothy days of the pandemic, earlier than rates of interest rose and digital readership dwindled.

As financial circumstances have worsened over the previous yr, media firms have shifted their priorities from progress to cost-savings, a transition that has forged the worth of those purchases underneath better scrutiny, based on media analyst Brian Morrissey, the writer of the e-newsletter The Rebooting. 

With an eye fixed towards efficiencies, some have determined to chop unfastened sure titles that, whereas worthwhile, would possibly match inconsistently into a bigger portfolio or divert consideration from extra important ventures. 

“When you may have fewer assets, you set them towards what’s working,” Morrissey mentioned. “Proper now, persons are taking a tough take a look at their portfolios—it’s no completely different than the tech platforms pulling again from their non-core initiatives.”

The pandemic consumers market has given option to belt-tightening

Mergers and acquisitions reached a fever pitch through the early years of the pandemic, based on information from KPMG Advisory.

Within the media and telecommunications sector, total deal quantity jumped 48% in 2021, and total deal worth rocketed 83%, to $941 billion.

Publishers additionally loved windfall promoting revenues within the latter half of 2020 and all through 2021 as customers spent file quantities of time shopping media properties.

To make the most of the second, deep-pocketed media firms started snatching up distressed properties.