After months of negotiations, Penske Media Corp. (aka Nikki Finke's boss) finally cut a deal for the struggling Hollywood trade. Purchase price is around $25 million, well below what British owner Reed Elsevier had originally sought. LAT reports that Deadline editor-in-chief Nikki Finke will not be involved in running Variety (Deadline will operate as a separate entity). No decision has been made on whether to keep publishing print editions. From the Times:
The fact that Penske, a digital media company headed by Chief Executive Jay Penske, won a nearly seven-month long auction held by Variety's British owner Reed Elsevier signifies how dominant a force the Internet has become in Hollywood. While Variety competes online, its five-day-a-week daily edition and weekly magazine are no longer the must-reads in Hollywood that they once were. In an interview, Penske said he believed Variety had faltered due to complacency, and that he intended to make it "absolutely fundamental and indispensable" to its readers in Hollywood.
Combining a famous print brand with a growing digital competitor could prove potent, but Penske faces a serious challenge in Variety. Despite several rounds of layoffs, its financial status has rapidly deteriorated in the face of shrinking ad sales. The organization has a staff of about 120. As recently as 2006, Variety earned a profit of about $33 million on $92 million of revenue, according to a knowledgeable person who requested anonymity because they were not authorized to disclose financial information. This year, it is on track to eke out a profit of about $6 million on $45 million in revenue.