Rolling Stone’s Financial Numbers Make Business Look Thin
The 50-year-old music publication may not be worth anywhere near as much as originally expected, with print ad revenue falling to $10.9 million in 2020.
The numbers for Rolling Stone, which went up for sale last week, don’t exactly inspire a lot of confidence.
According to Vanity Fair, revenue for the iconic music and lifestyle magazine is projected to total $46.3 million in 2017. Print advertising revenue is expected to drop to $10.9 million in 2020, compared with $28.6 million in 2015, and circulation revenue is forecast to fall by about 50% to $6.3 million by 2020.
The peek at the magazine’s business come from financial documents made available to prospective buyers after signing a nondisclosure agreement. Wenner Media LLC announced the planned sale of its 51% stake in Rolling Stone on Sept. 18, a decision that would bring to an end Jann Wenner’s 50-year ownership of a publication he founded in San Francisco at the height of the counterculture movement.
Even without knowing the size of Rolling Stone’s profit or revenue from its digital operations, the numbers form a picture of a shrinking business, according to Reed Phillips, managing partner of boutique media investment bank Oaklins DeSilva + Phillips LLC.
“The numbers are certainly discouraging in terms of where the business is, and where it’s headed and where it used to be,” Phillips said on Wednesday, Sept. 27. “Some brands have been hit much harder since the recession of 2008 than others, and it looks like Rolling Stone is one that has been hit hard.”
Wenner sold a 49% stake in the magazine a year ago to Singapore-based BandLab Technologies Ltd. in a deal estimated at $40 million. BandLab acquired Rolling Stone’s international distribution rather than any U.S. operations. Methuselah Advisors LLC was retained as Wenner Media’s financial adviser.
While interest among prospective buyers may be high, the price to be paid may be less than initial estimates of $80 million, and certainly below the $500 million that Wenner, 71, is said to have been offered some years ago. A buyer might pay 5 or 6 times profit, Phillips said, or 1 time revenue — $46.3 million for 2017. “Something in that ballpark,” he said.