Seven West Media agrees to sell Pacific to Bauer Media for $40m
Seven West Media (SWM) has agreed to sell its magazine business, Pacific Magazines, to Bauer Media for a cash consideration of $40m, plus $6.6m of advertising for SWM with Bauer.
Advertising spend commitments and content sharing are believed to be part of the ongoing agreement.
Bauer will pay $40m for the Pacific Magazines business
So what does this mean for Pac Mags staff? Everyone moves to Park Street??
The very loyal and hard working staff at Pacific were done over, beginning with the EA agreement earlier this year, which many strongly suspect was prepared in full anticipation of this sale. None of that will ever be forgotten or forgiven by the devastated staff. A horrible outcome.
4.9 times multiple on EBITA and only 40m
Overpaid
And Noddy ?
In other news, it appears that Cobb and Co are considering selling off their horseshoeing department, valued at eight thruppenny bits, after tax, bushrangers etc. Potential buyers are Blockbuster, Kodak and Yahoo.
Comment of the day.
Spoken by someone who has been out of the loop for a long while. Pacific are a fully fledged digital company aside from the print products they have. They have really transformed in the last five years, but without enough people to man the forts, and no investment by Seven to back their new direction properly it was certain not to be enough. A lot of good people are feeling like they’ve been misled by SWM.
People feel they’ve been misled because they have been misled. Many people in tears today over the lies they’d been fed in order to make them give up their redundancy rights. Single mothers who live month to month were in tears today wondering how they will feed their kids when their heavily slashed redundancy payments run out. And all so a greedy corporation can make a fat buck and all so slimy career managers can keep climbing the pole.
That may be true about Pacific having achieved digital transformation, but Bauer have been fumbling around with their digital …tolove network for ages. The problem is, as with most other mag producers, they don’t actually have any concrete plan to monitise the digital side of the business apart from display advertising which is susceptible to ad blocking and destroying the actual experience with aggressive ad takeovers sold to 20 something year old media buyers that are just looking for the latest unseen advert effect so they create insta-synergised-buzzword-buzzword campaigns to their managers who are now lost in a world they don’t understand. Most young media buyers have never even bought a magazine so they just don’t understand the value proposition and this exclude these from their campaign builds. This combined with a dwindling spend on actual journalists and focus on just recycling stories from the last 30 years with a quick refresh means this medium is truly doomed. The numbers of readers are pretty fudged, they extrapolate the possible readership of magazines based on the fact they exist in waiting rooms and “could” be read by multiple readers, not “actual” sales numbers. And when the numbers get real bad, they just stop paying Nielsen to track the downward trajectory. This may seem a harsh analysis, but they had years of warnings to prepare for this and yet have done nothing. #publishingVeteran check out other mumbrella articles on the follies of Bauer it is truly astonishing
Another way of looking at this is that Pacific was always about 60% the size of ACP, which was sold for $500m to the Germans. So we can conclude that either Bauer were sold a basket case, an absolute pup worth 1/5th of what they paid, or Pacific devalued from $300m to $40m in the last couple of years, making it the worst performing media business since MySpace… probably both.
@another agency: most likely a combination of both. Bauer absolutely overpaid for ACP and both companies (Bauer and Pacific) have lost significant value since then. Given the $40m sale price is 4.9 times multiple on EBITA , this means Pacific’s EBITDA is only ~$8m/year, and almost certainly going one way. Not a whole lot of value there…..
I’ll say it again. This would’ve never happened under Nick Chan. Pacific Magazines jettisoned some of their best players years ago and hired a bunch of muppets. Didn’t work out so well in the end, did it? #failure
Spoken like a true dinosaur.
Sincerely,
Kermit The Frog
Either a steal or they plan to dump a lot of mast heads. Prop the later..!
The ultimate mag business!!!! So many agency muffin baskets…..
It’s were magazines go to die
Will my subscription for magazines be affected by this sale from Pacific Magazines to Bauer?
Maybe the people that are made redundant should pool their redundancy pay together and buy it back…$40mill’s a steal!
Hahaha ain’t that the truth! Cheaper than a meat pie