![]() Moody’s Investor Service analyst Neil Begley told The Post there’s been a lot of pressure on digital media companies. “One ad sales guy can now sell across all companies.” “The company projects to be profitable in the future only because they can reduce significant costs by combining ad sales teams and eliminating overlap between multiple legal, finance, and human resources departments,” a person with knowledge adds. ![]() The all-stock transaction is expected to close in early 2022. People close to the company say the tie-up likely is a concession that neither company could find a path to profitability on its own - and only by combining will they be able to make money. In various interviews Monday, Vox Chief Executive Jim Bankoff said the new company would be “considerably larger than the sum of the parts” and could generate profit of $100 million. VOX chief executive officer Jim Bankoff, said the new company would be “considerably larger than the sum of the parts” and could generate profit of $100 million. It’s unlikely they add money to the deal, which would give the SPAC more time to find a target. Executives plan to quietly let the SPAC expire, sources said. Insiders have also realized taking a digital media company public is fraught with peril since it means revealing the inner workings publicly. However, a year later they still haven’t found a target and the special purpose acquisition company has 12 months before it expires - unless they add more money to the deal. Separately, Group Nine launched a blank-check company, Nine Acquisition Corp., in December 2020 - intent on finding a media target to combine with Group Nine. “Digital media publishing is getting harder by the day.” “All these companies are in trouble and challenged,” LightShed Partners analyst Rich Greenfield told The Post. Given Buzzfeed’s performance, Group Nine insiders likely are breathing a sigh of relief that their deal was private - and the public markets won’t be their to beat down their shares. Insiders are breathing a sigh of relief their deal is private and the market won’t call their bluff. “Still, I’d rather be in Group Nine’s position than Buzzfeed right now,” the source said of the onetime digital wunderkind that went public via a SPAC deal in early December since then, its stock has tanked by more than 40 percent. “In this current market environment, the deal between Group Nine and Vox is like two drunks leaning together to stand up,” a source said. The bloom is largely off the rose when it comes to digital media companies, industry watchers said. “It’s very telling that in no place they mention a dollar value for the combined company,” one insider said of the announcement of the tie-up. Likewise, Vox - which was valued at $1 billion in its last funding round in 2015 - was valued at approximately $672 million, according to sources close to the deal.Īdd up the latest figures and you get roughly $896 million - short of the $1 billion “unicorn” status that each company had hoped to achieve on its own. Sources say Group Nine’s worth has slumped to $225 million, less than half the $585 million it touted in 2016 when it got a $100 million investment from Discovery. Vox Media and Group Nine are keeping the value of their merger private - and that may be because the number isn’t as eye-popping as digital media darlings once commanded, On The Money has learned. Group Nine’s video news site NowThis says it has unionized Vox Media agrees to buy Group Nine in all-stock dealĬNN’s Jeff Zucker joins the board of Group Nine’s acquisition company
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