SOURCE: The Wall Street Journal
Vanity Fair Owner Stages Its Next Act, With Musical Theater, Esports and Satellite Launches
Advance Publications Inc., owner of the Condé Nast magazine empire and metropolitan newspapers, is on a $10 billion global shopping spree intended to diversify the company away from its traditional media holdings and reduce its reliance on advertising revenue.
The Newhouse family-owned company has already spent roughly $3 billion on various ventures as part of that effort, acquiring a group of European theaters, a maker of plagiarism-detection software, a majority stake in an esports analytics firm and a stake in a rocket operator specializing in low-Earth-orbit satellite launches.
“We’ve seen how disruption affects traditional media and the challenges that result,” said Steve Newhouse, co-president of Advance Publications, in an interview. “We’re looking to diversify into different areas not as exposed to the vagaries of the advertising market.”
Advance owns some of the nation’s most prominent magazines—including the New Yorker, Vogue and Vanity Fair—and local newspapers, such as the Oregonian and the Star-Ledger. The company also holds substantial stakes in television programmer Discovery Inc. ; cable operator Charter Communications Inc. ; and social news site Reddit Inc.
The diversification effort is being led by Janine Shelffo, a former UBS Group AG investment banker who joined Advance in 2017 after advising the Newhouse family when it sold Bright House Networks, then the country’s sixth-largest cable operator, to Charter in 2016.
The portfolio being assembled is funded in part by the $2 billion in cash that Advance received after selling Bright House. It also generates cash from stock repurchases at Discovery and Charter, and from other properties it owns. Ms. Shelffo, Advance’s chief strategy and development officer, said the company plans to spend $10 billion without having to trim its percentage ownership in Discovery and Charter.
Ms. Shelffo said her mandate is to find sustainable-growth opportunities rather than acquiring undervalued businesses that generate a lot of cash flow. “We’re focused on what will be the most disruptive economic trends over the next 10 or 20 years,” she said.
“It makes sense in the current environment to extend outside of traditional media,” said Reed Phillips III, chief executive of investment-banking firm Oaklins DeSilva+Phillips, of Advance’s diversification effort. “The risks are always that you are going into market segments you don’t fully understand. It is more fraught than buying something you really know.”