Another big M&A play is going down in the the world of media. Publishing group Red Ventures today announced that it is buying CNET Media Group from ViacomCBS for $500 million. The deal will include the eponymous CNET tech site, as well as ZDNet, Gamespot, TVGuide, Metacritic, and Chowhound.
The news puts paid to speculation that had been circulating for months that ViacomCBS was looking for a buyer for CNET and the wider media group, after ViacomCBS’s CEO Bob Bakish floated the idea of offloading non-core assets post-the Viacom/CBS merger. (And even earlier than that, insiders tell us that there were rumors that CBS had wanted to offload CNET and its tech stable “for literally years.”)
Bakish had been looking for cost savings of $500 million, a neat coincidence since that is the price Red Ventures is paying.
Red Ventures has been around since 2000 — a veteran and beneficiary, you could argue, of the late-nineties dot-com crash. It already owns 100 digital brands in categories like health, finance, travel, entertainment, home services and education. Its titles include Healthline.com, Greatist.com, Medical News Today, Bankrate.com, The Points Guy, and CreditCards.com. It has also collaborated with Time on a personal finance site, NextAdvisor.
The focus across many of these is reviews that the company subsequently monetizes. Given that this is a huge emphasis for CNET and other sites in its media group, you can see where the synergies might lie for Red Ventures.
“Red Ventures believes in the power of premium content from trusted brands that help people make better life decisions,” said Ric Elias, Red Ventures CEO and Co-Founder, in a statement. “Over the last 25 years CNET Media Group has built a dynamic portfolio of brands with well-earned authority on such topics as consumer tech and gaming that play an increasingly important role in people’s lives. Red Ventures is eager to invest in CNET Media Group’s growth with more personalized consumer experiences that will reinvigorate CNET Media Group’s brands and unlock unprecedented opportunity for all.”
CBS, prior to being combined with Viacom, originally acquired CNET and related sites in 2008 for $1.8 billion. CNET was a veritable leviathan in online tech journalism and the ambition was to create much more reach into online media. That deal did not include Gamespot, TVGuide, Metacritic or Chowhound.
The significantly discounted price being paid today for a larger group of assets underscores the changing — and often declining — value of more traditional media and publishing brands — even those “born” and solely existing in digital form — as well as the difficulties of the current market.
But it’s not all bad news. Red Ventures’ message seems to be that even if older, ad-based, mass-market models are under strain for some — in particular in a world where publishers like Facebook and Google continue to take the lion’s share of online advertising revenues — there are ways to run media businesses well, if you shift the models and re-set your expectations on how that business scales. (There are alternatives, of course, to diversify in other ways, such as building out paywalls around premium content, building out events businesses and more.)
Mark Larkin, who is the the EVP and GM of CNET Media Group, will continue to lead the business at Red Ventures.
“I am incredibly excited about CNET Media Group’s future. I believe that the combination of Red Ventures customer experience platform and CNET Media Group’s rich content and deep editorial expertise greatly benefits both our audiences and our partners,” he said in a statement. “Red Ventures shares our vision and is committed to realizing the full potential of our portfolio of world-class brands.”
The companies said that the deal is expected to close in Q4.