7/24/2023 0 Comments Vox media comcast![]() decided to set their sights on unleashing Disney’s in-house IP out of the bottle by going direct to consumer. Vice, it has been told, actually turned down an acquisition offer by Disney, as did Buzzfeed, before Kevin Mayer et al. And, too rich it would prove to be, since Disney ended up writing off its entire investment when it had joined Vice’s cap table at a previous round that valued the one-time Montreal print company at $4 billion. ![]() Vice would soon learn that you don’t mess with Texas, as TPG’s massive $450 million investment came with a supposed 3X liquidation preference that would somewhat cushion TPG against downside risk if the $5.7 billion valuation would prove too rich. While NBC Universal helped inflate that bubble with its $400 million investments in Buzzfeed and $200 million check for VOX, TPG’s massive investment in to Vice was the last call before the hangover. ![]() Mic soiled itself, selling for $5 million Mashable crashed, going from a paper valuation of $200 million to a “fire sale” of $50 million to bargain-seeking Ziff Davis (owners of IGN Entertainment)… and suddenly, investor appetite for media companies fell quicker than the name Adolf in post-war Germany. Of course, 2017 was unrecognizable relative to 2016. During the zenith era of 2016, they fetched up to 7X revenues, as per the following source: could have commanded something in the 8-20X range depending on growth rates, scale, and so on depending on their publicly-traded brethren, but as none of these formidable companies fuelled by venture capital and private equity had any profits to speak of, valuations were formed on the basis of revenue. Ever since, in formal and informal conversations, WatchMojo’s valuation is based largely on that metric: EBITDA, although as a private company, we command a lower one than publicly traded firms do, due to a “liquidity discount.” For purposes of illustration, here are a list of P/E multiples of large cap media companies:Īs the leading bellwether digital media companies, the privately-held digital media natives such as Vice Media, VOX, Buzzfeed, etc. When life had different plans and I caught the entrepreneurial bug and launched WatchMojo, I purposely hatched a business model which would become profitable, and by 2012 – our sixth year of operations – we broke-even. were valued on EBITDA, or earnings before interest, taxes, depreciation and amortization. While studying finance in college and considering a career as analyst covering media companies, I learned early on that media companies like Viacom, Disney etc. Smith, whom I have met a few times and admire for nearly single-handedly making content interesting to investors, was the quintessential salesman/showman, the latest in a long list of storyteller entrepreneurs I have studied over the years. ![]() In my industry – digital media – the zenith was no doubt 2016.īy then, Vice Media’s Shane Smith – referred to by more than one person as the PT Barnum of our racket – had commandeered interest from Disney, WPP, FOX before pulling in the mother of all hauls: TPG’s massive investment at a $5.7 billion valuation. Interest for a given company depends on micro factors such as profitability, product assortment, market shares, but a company’s ultimate valuation starts off with macro conditions: interest rates, economic growth, etc. Throughout the 16-year history of WatchMojo, I have had a ton of strategic conversations – some more serious than others. – have all continued to grow their income statements but failed to dazzle the capital markets. The one-time high-flying digital media giants – VICE Media, Buzzfeed, VOX Media, Group Nine etc.
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