Back in August 2016, Univision acquired the-then Gawker Media Group for $135 million in a bankruptcy auction spurred by Hulk Hogan’s Peter Thiel-funded lawsuit, shutting down flagship site Gawker, but picking up titles such as Deadspin, Gizmodo, Kotaku, Jalopnik and more. Now, Univision may be looking to move on. Following rumors of them selling all or part of Fusion Media (the larger entity the renamed Gizmodo Media Group was rolled up into after the 2016 acquisition) this weekend, Univision sent out a press release Monday that they’ll “explore” selling Gizmodo Media Group and The Onion:
Univision Communications Inc. (UCI), the leading media company serving Hispanic America, today announced that the Company has initiated a formal process to explore the sale of the assets comprising the Gizmodo Media Group (GMG) and The Onion. The Company determined that pursuing a sale of GMG and The Onion collectively will allow UCI to focus on its core assets and further strengthen UCI’s position as the No. 1 media company serving U.S. Hispanics, while enabling both GMG and The Onion even greater opportunities to grow under new ownership.
The GMG digital portfolio includes Gizmodo, Jezebel, Deadspin, Lifehacker, Splinter, The Root, Kotaku, Earther and Jalopnik and The Onion portfolio includes, The Onion, Clickhole, The A.V. Club and The Takeout.
The release also notes that they’ve engaged investment firm Morgan Stanley “to assist in the process,” but that no sale is assured. And it should be noted that these kinds of exploratory talks don’t always lead to sales, even once investment bankers have been retained; a lot may depend on what kind of offers come in. If the offers for the Gizmodo side are well below the $135 million Univision paid, they might have incentive to hang on to those properties for now, presuming they’re not losing too much money or provoking too many lawsuits. Or they might be motivated to break those properties up and sell some or all of them off individually.
The Gizmodo Media Group package may be a difficult one to sell in its own right, as those titles (many of which were part of the Gawker group, but The Root was owned by Slate until its sale to Univision in 2015, Earther was launched after the Gawker acquisition, and Splinter is the rebranded Fusion website, which Univision owned before picking up Gawker) are exceptionally different, covering everything from tech to sports to cars to “nature for nerds” (Earther), “politics and social justice news” (Splinter), “celebrity, sex and fashion for women – without airbrushing” (Jezebel), and “Black news, opinions, politics and culture” (The Root).
Some publishers might find some Gizmodo Media Group titles to be a great fit with their current catalogue, but might not have interest in the others. That was part of the limited bidding for Gawker’s assets in bankruptcy court, which saw only Univision and Ziff Davis (which could be involved again) make formal bids. And selling these titles off together could become even more challenging if the Onion portfolio is going to be part of this package deal too.
This story has some similar challenges to the ones seen in the long-running Time Inc. sale, which saw the company initially ask for offers on its whole portfolio (covering everything from Time to Sports Illustrated to Entertainment Weekly to Essence) in March 2017 following an unsuccessful takeover bid from Edgar Bronfman Jr., Len Blavatnik and associates in November 2016. Meredith Corporation, known for publishing female-focused magazines like Better Homes and Gardens, Martha Stewart Living and so on, was long rumored as a buyer, but they showed particularly little interest in SI, raising questions about its future.
Time Inc. initially declined to proceed with that sale in April 2017, leading to a stock drop. They then discussed selling some smaller titles separately that July, and then eventually agreed to a deal to sell everything to Meredith (for about $1.84 billion) last November. Since then, Meredith has reportedly been looking to sell off SI (as well as a bundle of Time, Money and Fortune), but there’s still plenty of uncertainty about if and when that will happen. However, the market for SI in particular appears reasonably strong, with over 20 bidders (including six in serious talks with Meredith) as of a Vanity Fair report from Joe Pompeo in May.
And the Time Inc. moves can be seen in a couple of different ways for the Gizmodo sale. On the one hand, the interest in the properties Meredith is selling off (over 80 bidders in all, as per Pompeo’s piece) suggests there are still plenty of people looking to buy already-established media brands, and to buy some relatively-focused brands. And those bidders aren’t all going to come away with the Meredith titles; losing bidders might explore other media alternatives, and the Gizmodo properties might fit there.
That sale also might indicate the benefits of selling titles off piecemeal to buyers interested in one specific niche, but not others, or it could convince buyers to pick up the whole Gizmodo portfolio and then sell off what they’re not interested in later. But it’s also possible that having all these media brands up for sale at the same time might lead to too much supply, diluting the market. And on the sports side, it’s also worth noting that the formerly-Fox regional sports networks are going to be out there soon too, either as a package or piecemeal. Those might attract some interest from some of the same bidders.
At any rate, it’s interesting that Univision is looking to move on from the Gizmodo titles (and the other ones it’s rolled into that group) so soon after acquiring them. It sounds like that’s part of a shift in corporate strategy, and a doubling-down on their Spanish-language focus. And maybe it will work out for them; maybe they’ll get bids that make it worthwhile to part ways with these titles, and maybe these titles will get new owners that particularly want them and want to invest in them. Or maybe there won’t be as much interest as they’re hoping, and they’ll decide to keep the titles themselves instead of selling them at a big loss. In any case, this will certainly be something to watch this summer.