News Ltd has joined the pack of local and international media companies investigating online site Business Spectator for a possible buyout of several founding investors.
Long-standing media and marketing backer Mark Carnegie, a close business associate of John Singleton and co-architect of the listed STW Group, is considering an exit along with his former investment bank partner John Wylie, who is also a founding investor in Australian Independent Business Media (AIBM). AIBM owns Business Spectator and the subscription-based investment hub Eureka Report, which has 15,500 subscribers paying $385 per year.
Fairfax Media, Reuters, Financial Times and Euromoney have all been raised as possible suitors but News Ltd is now also in the frame.
News Ltd’s acting communications director Stephen Browning would not confirm or deny suggestions the company had received an information memorandum from AIBM but Alan Kohler confirmed the move to AdNews.
“My understanding is they have signed a confidentiality agreement and received a copy of the information memorandum,” Kohler said. “They’ve got the IM.”
Kohler, a former editor of the Australian Financial Review, wants to stay with the company he founded but would not declare whether a trade sale would proceed at all.
Kohler told The Australian he and other journalist shareholders such as Robert Gottliebsen, Stephen Bartholomeusz, James Kirby and Karen Maley wanted to keep their equity and stick with the company but other investors were considering an exit.
When asked by AdNews today whether he was leaning towards a partial sale being likely he said: “I’m standing directly upright. I hope this thing is over in a month. We’re moving as fast as possible. It’s quite disruptive.”
News Ltd had already made an approach last year to buy the group, which is said to have been earmarked to fall under the remit of The Australian if it went ahead. Although some speculation had Kohler underwhelmed with the idea of working with The Australian’s editor-in-chief, Chris Mitchell, Kohler told AdNews a deal did not proceed because the “timing wasn’t great”.
“At that moment we had big plans and we were in the middle of hiring people to run the business,” he said. “We think we’re in better shape now.”
News Ltd has flirted with the idea of acquiring Business Spectator and Eureka Report for some years with Rupert Murdoch said to have told his Australian editors on a conference call in 2008 his thoughts on the company. “I like it. Copy it, if you can’t copy it, buy it,” rumours about the conference call went although News Ltd denied it at the time.
AIBM generates about $6 million in revenues from Eureka Report and an estimated $4-6 million in advertising and custom publishing and corporate video revenues. Business Spectator is the single largest “funnel” for Eureka Report subscriptions, Kohler said.
He also flagged plans for Business Spectator to launch a “premium” business content service which would sit “between Business Spectator and Eureka”, although he would not divulge details.
Late last year Business Spectator split its advertising sales unit from a joint venture, First Digital, with Eric Beecher’s Private Media, which owns online sites such as Crikey and Smart Company, to operate independently.
Business Spectator general manager and publisher, Nicholas Gray, said the move was not a pre-emptive structural move for the current sale talks.
“It was not about the potential sale,” he told AdNews. “We’ve gone from having 15 people selling the portfolio of 10 sites to what will be 10 people selling Business Spectator and Eureka. There’s no doubt when you have a focused dedicated team of people, the engagement improves, as does the results for us and clients.”
Gray cited Nielsen Online data for November which showed Business Spectator’s unique browsers at 332,195. “If you add in Business Spectator and Climate Spectator (unduplicated) it’s about 390,000,” he said. Eureka Report had 59,707 UBs for November.
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