15th October 2012
A quarter of a century after Syd Silverman sold Variety to the Cahners Group, our venerable sheet, now virtually unrecognizable from what it was in our days, other than the logo Sime and Hattie Silverman once sketched on a sheet of paper sitting in a restaurant in Harlem, has once again been sold.
After years of negotations, bids, wranglings about the sales price and rumors, with three contenders eyeing the property over the past year (Reed started putting the paper on the block, along with other trade publications it owned, as far back as 2008), a deal was struck last week when an org monickered Penska Media Corporation took over the Variety publications from Reed-Elsevier. Variety‘s parent, had already divested itself of all its other publications in the States in previous years.
By now, to my knowledge, none of the staff on the Daily or the weekly dates back to the Silverman era. Perhaps the general attitude of most former staffers is now is one of indifference as to who is running the show, since the paper has been so totally transformed through the years and is only a wraith of what it was when it was run out of 46th Street and Cahuenga Boulevard under the stewardships of Syd and Tom Pryor. It is hardly necessary to remind one and all of the painful and disastrous process of degradation that followed after the corporate “suits” took over.
A symptom of that degradation is the price finally paid for Variety by the new owner, approximately $25 million, about half of what Reed had originally been asking for it. Syd sold the paper in 1987 for about $60 million, meaning that is has been devalued by a half, or, if adjusted to inflation, to a much smaller percentage in comparison to its former value. Debt and equity financing for the transactiion was provided by affiliates of Third Point LLC, a hedge fund. Third’s Point’s owner, Dan Loeb, is a major stockholder in Yahoo!
For those not “up” on the current state of show biz reporting, or for those who have lost all interest in the sector which, at the time we worked in it, seemed to so all-important to us, most of the goings-on in Hollywood are now delivered on news websites, led by The Hollywood Reporter, which in addition has been transmogrified into a successful glossy weekly magazine. The Reporter’s on-line popularity is followed by the blogs for Deadline.com and The Wrap. The current guru of these electronic news-and-gossip delivery systems is a Hollywood journalist monickered Nikki Finke who six years ago started the website Deadline, which Penske Media bought in 2009. Finke continues to be the “Walter Winchell” of show biz cyberspace in Tinseltown, and is editor-in-chief of Deadline. Penske also owns eight other blogs, including HollywoodLife.com, TVLine.com and Movieline.com.
The offical release of the purchase, with its usual platitudinous jargon, ran as follows:
Jay Penske, Chairman and Chief Executive Officer of PMC, said, “Since 1905, Variety has been the world’s premier entertainment news source, and is today one of the most recognized global media brands. We are thrilled to welcome Variety and its exceptional team into the PMC organization. As part of this significant acquisition, we plan to rapidly build upon Variety‘s foundation while extending this invaluable brand’s presence across the web, broadcast, mobile, and international markets.”
Does that all have a familiar ring to it? Does it bring back memories of that meeting in Sardi’s in 1987 when the new Cahner’s execs gathered the staff from 46th Street to the third floor of the restaurant to tell them, “Nothing will change, all your jobs are secure.”? At least they offered a question and answer session after the hype, though the replies they received to pointed questions were as circumspect and insincere as those of the glibbest politicos running for office.
In the event of the new sale, Penske visited Variety‘s offices on Wilshire Blvd. on October 9th at 4:30 p.m., and in front of some 80 staffers, in an empty floor of the building, held a briefing which mostly concerned his Media Corporation. He took no questions, thus avoiding having to give embarrassing replies. His most important announcement was that Variety‘s “pay wall” (charging for access to Variety online), set up in 2009, would be abolished and that print publications would still be coming out “for the foreseeable future”. How far Penske can see into that future naturally is as uncertain as predicting tomorrow’s stock market. After 40 minutes the meeting broke up.
So, who is this new owner of the sheet that Sime Silverman started in 1905?
Penske, 33, is the son of auto racing mogul Roger Penske. According to an article in the New York Times, his image as a playboy was heightened in August when he was arrested in Nantucket in an incident in which he was accused to breaking into a yacht club and urinating on a woman’s boots.
A few reactions from the muggs that were sent to me were as follows:
Hy Hollinger:
Hope it doesn’t hurt such wonderful people like Tim Gtey, Cynthia Littleton, Andrew Wallerstein and a host of others. All pals from my Variety and Hollywood Rerporter days.
Mike Silverman:
Well, that surely marks the end of another era; asset depletion, strategic blunders; I daresay the plan may surely include a broadcast option/TV show to monetize the acquisition that much faster. “Variety Tonight” anybody?
Frank Segers:
Wonder what’s next for the rags. Other than brand name, not sure what else V/DV brings Finke and Penske. The Silverman reign deserves more than just a passing mention.
Overall, it’s surpising how little I care about who bought Variety. Yes, the Internet has undercut all print publications, but I have to think that terrible management is also responsible. And the management since the Silvermans has been truly terrible.
From the start, Cahners didn’t have a clue. Essentially a low rent trade publisher, it had little idea of the scope and reach of Variety and how it rose to eminence. (Note that the sales to Cahners drew WORLDWIDE headlines. The sale to Penske, scattered and desultory.)
After Reed absorbed Cahners, it felt it had the sophistication to produce a top flight product. They were less clueless but far more arrogant. They gave up on the properties years ago, and staff was complaining that Reed didn’t care. The staff was right. Reed didn’t.
I won’t go over the depradations of Bart as editor, but they were devastating. The rag was already robbed of its feistiness and richness by the time Bart showed up, and during his long tenure he finished the job.
I have not read Variety or Daily Variety in years. It is dull beyond imagination.
I’m not sure what lies ahead for the rags. I love it that the LA managers are assuring staff of minimal changes. Where have we heard that before?
Not sure what Penske will do with the rags. I suspect things will not end well. But, the implication of Besas’ milestone history of the real Variety (Inside Variety, Ars Millenii 2000), stands — Variety died when Syd sold it. Now it is just another moribund property that might or might not find some minimal new “life.”
In all, a sad ending brought about by radically changing market conditions and horrendous management.
Paul Rosovsky:
Seriously, it makes sense but I couldn’t find any numbers (even estimated) in the [initial] piece (something that would never have happened in Variety‘s coverage back in the day…)
Morrie Gelman:
Some 20 years ago at a convention I came across a journalism professor from Denver University who said to me, “Don’t change.” I was confused. “Come again?” I asked. “By your badge I see you’re from Variety,” he explained. “Quirky headlines, special language, don’t change. Otherwise you stop being different. Why would you want to be like every other publication?”
I believe Variety‘s survival was dependent on being different.
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Any and all comments from former muggs will be welcome. Send them to yours truly at: pbesas@hotmail.com.