By David Poland email@example.com
Variety Becomes A Mail.com Property
You know how it sounds yicky to talk about movies as “product?”
Welcome to the new Variety… “a Penske Media Joint.”
I don’t live in Planet Penske, so I have no idea how Hollywood Life is doing. All I know is… I have never heard it mentioned by anyone or referenced online outside of when Penske is the story. Ever.
With due respect for the good folks that are still drawing checks from Movie|Line… does the site have any standing outside of the occasional link that pretty much every blog gets in the entertainment blogosphere? Has anyone living in 2012 rushed to Movie|Line to get insight into the latest story or movie?
TV|Line is a personal weblog with a lot of production value, right?
And Deadline, for all its endless self-hype and a personally desperate media happy to lap up the idea that they, toom might get paid some day, has never managed to scale its site into most than a single-sheet tabloid. The only clicks to additional content pages are driven by “More,” which is a narrow set of clicks for most of its content, and people reading comments, which seem, at times, more popular than the content of the site.
Make no mistake, the Mike & Nellie show works brilliantly in its context. Nikki is the ringmaster, but those two jump through the hoops and ultimately, that is the only reason a crowd still comes.
(It’s worth pointing out that in the hours since Nikki went on her “vacation,” there is no real difference in the amount or quality of content on Deadline.)
So what credentials does Jay Penske bring to the stewardship of Variety? He paid a relative fortune to enable a journalistic car wreck and then agreed to pay two trade reporters—the right ones—more than they ever had been paid to run free. That’s pretty much it. He also hired Lynne Segall, ad sales queen, who brought the profit center to Deadline… a print magazine that sparks Oscar Consultants’ sense of tradition of spending a fortune to put a piece of paper on voters’ coffee tables… which has always been said to have been fought by Nikki, who would, apparently, prefer to just spend Penske’s money without making any profit for him.
So what is Penske doing, buying Variety with a partner? The math is simple. He and his partner must be figuring that they can get their money back out, plus interest, in 6 or 7 years if they can maintain what exists. But they would prefer to cut overhead, making the existing entity more profitable, and perhaps even growing things. How? There is no sign of an actual idea there. And the trade business is in decline. It’s only going to get worse.
That doesn’t mean that there isn’t a business there. It’s just not a very big one.
And there is the BIG problem… which is, how do you differentiate, in a world that doesn’t care in the least where they link, between Deadline and Variety, especially when you have eliminated the idea of intense competition? The more Penske uses his lessons from Deadline, the more worthless Variety becomes as a unique brand. The one thing Variety does that Deadline really does not is criticism of film, TV, and stage. But Rotten Tomatoes seems to have that covered.
But this does remind us to wonder aloud whether Jay Penske is aware that Variety has already been cut to the bloody bone. This is not the fat, bloated, slow, cash machine that Peter Bart used to run.
The big piece of this puzzle that all of us Nikki obsessives have so far overlooked is Dan Loeb, who runs Third Point, the hedge fund that apparently has a major financial stage in this purchase. Loeb’s a 50-year-old right-wing, shareholder activist type. Third Point also owns 5.8% of Yahoo!, where Loeb is the guy who outed Scott Thompson’s resume lie, effectively shoving him out.
Penske is the face of this deal, but Dan Loeb is not the kind of guy who was going to invest more than $10 million and have Nikki Finke tell him how his business was going to work.
Was the NY Deadline event last week a chance for Nikki to audition for Loeb? Possibly. If it was, she clearly failed.
In the short run, separating Nikki from Variety means that Penske can, indeed, assess Variety as it now stands, with current staff neither jumping off the boat or being pushed off by Her Royal Craziness.
I see no sign of a big idea from Penske. But it could be that Loeb is looking to leverage this into something else altogether… like becoming a part of Yahoo! or becoming the FoxNews of Hollywood, a pedestal from which to preach a certain fiscal mindset to Hollywood.
And what happens when Nikki comes back to work? That’s the wild card. Will she play nice? Or will she become Penske’s Anjelica Huston in Crimes & Misdemeanors?
No idea, really. Does Finke have an out with Penske? She can surely find a funder/sucker if she wants to break it off. Where is Penske/Loeb’s “red line” on Variety revenues? How much will Variety dip into the Fleming of it all (as Penske pays him, not Nikki)? Will a dozen Variety reporters find a funder to the tune of $2m a year and out-Penske/out-Finke Variety?
The purchase of Variety opens the door for another entity to step up into the space. Sharon Waxman isn’t up to it. Some, like me, are not interested. The Hollywood Reporter is already being weighed down by its inability to get off the Oscar season industry crack pipe.
The only almost guaranteed loser in all of this? Journalism. At least for now.