Vox Media Acquires New York Magazine

The New York Times Finance 1 month ago

After more than 50 years of chronicling the highbrow, lowbrow, brilliant and despicable characters of the city whose name it took, New York Magazine has a new owner.

On Tuesday, Vox Media agreed to acquire New York Media, the company behind the biweekly print magazine and five popular online offshoots, in an all-stock transaction. Neither company would disclose the value of the deal.

While consolidations in the media industry typically mean cutting costs at the expense of quality journalism, Vox and New York said their combination was something different. They are bringing together a much-decorated print magazine, websites, a podcast empire and several streaming television deals — the very model, they hope, of a modern media company.

“No one had to do this,” Pamela Wasserstein, the chief executive of New York Media, said on Tuesday. “It’s a brilliant, in our view, opportunity, so that’s why we leaned into it. It’s not out of need. It’s out of ambition.”

New York Media is the home of the websites The Cut (style, culture), Grub Street (food), Intelligencer (politics), The Strategist (shopping) and Vulture (pop culture) and was losing as much as $10 million a year before a recent upturn, according to two people with knowledge of the company. The company laid off about 5 percent of its staff this year.

The publishing company was started by the investment banker Bruce Wasserstein, who died in 2009, and is owned by the Wasserstein Family Trust. Ms. Wasserstein, the company founder’s daughter, who declined to comment on New York Media’s finances, started exploring a sale more than a year ago and had stopped looking for a buyer when she started discussions with Vox Media in June. She will continue to run the business of New York and its sites, with the title of president of Vox Media. She will also have a seat on the Vox Media board.

Jim Bankoff, the Vox Media chief executive and chairman, pledged that the merger would not result in editorial layoffs or the folding of any of the New York-related publications, including the print magazine, or the Vox brands, which include The Verge, Eater, Curbed, Vox and SB Nation.

“Nothing changes editorially for any of our brands,” Mr. Bankoff said.

In a joint interview, he and Ms. Wasserstein said the new company would aim to be more than the sum of its parts and would be more attractive to advertisers.

David Haskell, who succeeded Adam Moss as New York’s editor in chief in April, said in a phone interview, “There’s a part of me that’s a little wistful about saying goodbye to the independent family business, but a bigger part of me is confident that Pam found us the ideal long-term partner.”

Mr. Haskell will remain in charge of the print magazine and its digital titles, reporting to Ms. Wasserstein. Melissa Bell, the publisher of Vox Media, will continue to manage Vox’s editorial teams and report to Mr. Bankoff.

New York was started by the editor Clay Felker in the 1960s as a Sunday supplement of The New York Herald-Tribune. Nine months after The Trib folded, it returned as a stand-alone publication in 1968. Standing front and center in a newspaper ad for the magazine’s comeback were three of its best-known writers, Jimmy Breslin, Gloria Steinem and Tom Wolfe.

The current crew at New York, one of a dwindling number of magazines that regularly publish ambitious essays and feature stories, includes Rebecca Traister, Andrew Sullivan and Jonathan Chait. The film “Hustlers,” which has grossed more than $62 million in the United States since its release on Sept. 13, is based on a New York article by Jessica Pressler. New York has won 44 National Magazine Awards and the 2018 Pulitzer Prize in criticism for its art critic, Jerry Saltz.

Once owned by Rupert Murdoch, New York was bought by Mr. Wasserstein in 2004 for $55 million. Ms. Wasserstein joined the company full time a few years after his death.

Founded more than 50 years ago, New York magazine quickly became synonymous with lasting long-form writing and features.

The company she ran is effectively taking a minority stake in the privately held Vox Media, which has raised more than $300 million in funding, including $200 million from NBCUniversal. The company was valued at $1 billion in 2015.

With the rise of digital media in the last two decades, many companies built on magazines have struggled. The once-mighty Time Inc., for instance, was scooped up last year by Meredith, which worked quickly to offload signature publications like Time, Fortune and Sports Illustrated.

More recently, digital media companies have also started to struggle, leading many outlets to ponder joining with rivals to increase their chances of long-term survival. Venture capital-backed sites like BuzzFeed, Vice, Bustle, Refinery29 and Group Nine have sought mergers in the last year, arguing that scale and cost savings are crucial at a time when digital advertising, dominated by Google and Facebook, fails to pay the bills. More than 1,000 employees lost their jobs this year in layoffs at BuzzFeed, AOL, Yahoo, HuffPost and Vice Media.

Digital media companies with diverse revenue streams can still thrive. Mr. Bankoff reshaped Vox Media to rely less on digital advertising, and after expanding its video and podcast businesses, the company had a modest profit on $185 million in revenue last year.

Even with the addition of New York Media, Vox Media expects to remain profitable, Mr. Bankoff and Ms. Wasserstein said. Bolstered by its new acquisition, Vox Media expects to exceed $300 million in revenue by the end of 2020, according to two people familiar with the deal, putting it on a par, in terms of annual revenue, with BuzzFeed. (Mr. Bankoff and Ms. Wasserstein declined to comment on financial projections for the revamped Vox Media.)

“We see a lot of mergers that are done for the wrong reason: because one or two companies might be desperate, or for financial engineering,” Mr. Bankoff, known for his straightforward style, said. “We’ve been struck by the lackluster ambitions of a lot of the other tie-ups, and the lackluster rationales. What was important to us both was making sure that the market knew that this was something different.”

Vox Media got its start, in 2005, as SB Nation, a network of sports fan sites. Since Mr. Bankoff, a onetime executive at AOL, was hired in 2009 to lead the company, it has started new titles such as The Verge and Polygon, which cover tech and gaming, and acquired others. Those include Recode, founded by Kara Swisher (also an opinion writer for The New York Times) and Walt Mossberg, as well as Eater and Curbed.

Vox.com, founded in 2014 by Ms. Bell, Ezra Klein and Matthew Yglesias, is the general-interest flagship known for explanatory journalism. The site’s “explainers” have become a journalistic genre, with their guides to everything from nuclear-weapons deals to internet ephemera.

The company cut a production deal in May with the streaming service Hulu to create TV shows centered on food and family with David Chang and Chrissy Teigen. Vox Media also renewed a production agreement with Netflix for “Explained,” a series based on Vox’s specialty, and it has generated revenue by building its conference business and licensing its content management system, Chorus.

Ms. Wasserstein and Mr. Bankoff started discussing the possibility of joining forces in June at the Code Conference, an annual tech-industry gathering produced by Recode. This year’s conference took place at the Phoenician resort near Phoenix.

“We always talk about the industry, and I was like, ‘Maybe we should explore this,’” Mr. Bankoff said.

When they looked into it more seriously, they found that the two companies complemented each other, they said. Analyses showed a “surprisingly small audience overlap,” Mr. Bankoff said.

The combined sites will have 125 million monthly unique visitors, the companies estimated.

Mr. Moss, who stepped down as New York’s editor in chief after a 15-year tenure during which he revitalized the magazine and presided over the start of the related sites, said he was in favor of the deal.

“New York was pretty much unique in being a small, family-owned company, and did very well at that,” Mr. Moss said. “But moving ahead into economic waters that are hard to predict, it’s stronger to be bigger.”


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