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Penske Buys Variety for $25 Million UPDATED

Photo of Anne Thompson By Anne Thompson | Thompson on Hollywood October 9, 2012 at 12:14PM

Well, the early reports are true. After seven months of negotiations, Penske Media Corp., backed by hedge fund Third Point, has won 107-year-old trade paper Variety for $25 million. Just months ago Variety was thought to be worth $50 mlllion, which was still substantially lower than its pre-recession peak value. Jay Penske, 33, outbid New York Hedge Fund Avenue Capitol and supermarket mogul Ron Burkle.
Bonnie Fuller, Jay Penske
Bonnie Fuller, Jay Penske

To stay afloat as recession ad revenues plummeted, Variety slashed its most expensive name columnists and critics (including me) in favor of cheaper less-known writers and print support staff as it went behind an unforgiving pay wall and continued to churn out five print dailies plus one weekly edition. Compared to Variety, Deadline's operation is lean. The economies of scale that Finke lives by are one reason she is so successful. Variety has no clue how to function the way she does.

Will Penske eventually put both brands under one bigger roof? I still see an advantage to dividing the two entities so that Finke's Deadline is an online breaking news operation while Variety functions as a softer print trade revenue producer, complete with Pete Hammond's awards mongering. Edited nuggets from the online content could add value to a weekly print edition.

UPDATE: Variety assets that Penske is buying include a massive ad sales operation and international news and reviewers around the world. What he will presuambly let go is the print daily, which would cause layoffs, although many would stay on board to manage a weekly edition. Steve Gaydos on the special features side --which is the source of Variety's millions--could be a pivotal player in the new order.

This article is related to: Media, New Media & Technology, News

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Born and raised in Manhattan, Anne Thompson grew up going to the Thalia and The New Yorker and wound up at grad Cinema Studies at NYU. She worked at United Artists and Film Comment before heading west as that magazine's west coast editor. She wrote for the LA Weekly, Sight and Sound, Empire, The New York Times and Entertainment Weekly before serving as West Coast Editor of Premiere. She wrote for The Washington Post, The London Observer, Wired, More, and Vanity Fair, and did staff stints at The Hollywood Reporter and Variety. She eventually took her blog Thompson on Hollywood to Indiewire. She taught film criticism at USC Critical Studies, and continues to host the fall semester of “Sneak Previews” for UCLA Extension.