Politico seeks billion dollar deal with Axel Springer

Politico, the Washington news site popular with Beltway energy brokers, is seeking up to $ 1 billion in a possible deal with German publ...

Politico, the Washington news site popular with Beltway energy brokers, is seeking up to $ 1 billion in a possible deal with German publishing giant Axel Springer.

Led by its owner, Robert Allbritton, Politico is in talks with Axel over a potential investment or outright sale, two people familiar with the matter said. Such a deal would represent a big bonus for Politico, which generates around $ 200 million in revenue a year, they said.

This would make it one of the costliest media mergers in recent memory. A billion dollar deal would be equivalent to five times Politico’s annual sales. BuzzFeed, one of the largest digital publishers in the country, recently announced a financial transaction that would make it public at a valuation of $ 1.5 billion, or roughly three times its annual revenue. The New York Times Company is valued at about four times its annual revenue.

A spokesperson for Mr Allbritton responded to inquiries by referring to an email sent to staff yesterday in which the owner said, in part: ‘My businesses have a clear policy of just not commenting – we don’t confirm, we don’t deny, we don’t wink, we don’t nod ”about the pending offers. Axel also declined to comment.

The German publisher is actively seeking media properties in the United States. The company acquired Business Insider for around $ 500 million in 2015, and last year it acquired a Control participation in Morning Brew, a newsletter editor.

Axel already has a partnership with Politico as a co-owner of Politico Europe, which the German company is trying to figure out what to do with. Since he does not control the entity, he cannot develop the business without Mr. Allbritton’s consent. A deal with Politico could solve this problem while expanding Axel’s presence in the United States, the people said.

Merger with Politico could cause Axel’s to fail negotiates the acquisition of Axios, the competing news startup founded by Politico veterans Jim VandeHei, Mike Allen and Roy Schwartz. (M. VandeHei and John F. Harris started Politico in 2006 after leaving The Washington Post.) Axios management did not aggressively pursue the deal, one of the people said.

Mr. Allbritton, a major Washington media player whose family owned a television empire, funded Politico. He finally sold his family’s TV channels to Sinclair Broadcast Group for nearly $ 1 billion. After the debt, the family brought in around $ 500 million in the sale.

Politico was fortunate enough to sell to Axel several years ago when it was a much smaller operation, but Mr Allbritton didn’t want to do it at the time, people said.

Mr Allbritton has recently focused on maintaining Politico’s all-star team and expanding the business. But the media landscape has changed dramatically, and the so-called talent economy has made it possible for leading journalists to start their own businesses.

This year, three of Politico’s top staff – Jake Sherman, Anna Palmer and John Bresnahan – left for start Punchbowl, a political news site. Mr. Sherman and Ms. Palmer were the well-known hands behind Politico’s biggest franchise, the Playbook newsletter.

In February, the CEO of Politico announcement he would leave. Then, in June, Carrie Budoff Brown, a longtime Politico editor who led America’s editorial staff for half a decade, said she would leave to join NBC News. Politico’s 400 or so journalists are also in the throes of an organizing drive that could dramatically increase the cost of the business.

Mr Allbritton weighed the prospects of a lucrative salary against maintaining full control over a well-read news site in the nation’s capital.

The merger discussions were earlier reported by the Wall Street Journal.

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Newsrust - US Top News: Politico seeks billion dollar deal with Axel Springer
Politico seeks billion dollar deal with Axel Springer
Newsrust - US Top News
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