Monday was the day that the digital news outlet was acquired by cable and plans were announced for its expansion
Is the former here to bolster the latter’s diminished media footprint or replace it completely? Where does the value come? Axios topped 1 Million Although email subscribers increased in June, it still falls short of Morning Brew’s (4 million) competitors. Cox, which relies on advertising sales through television, radio, and newspapers, can be bolstered with a profitable subscription business that is growing at a time of uncertainty when ad sales could dry up.
“To me, the synergy is that Cox has a lot of deep pockets,” Christopher Roush, dean of Quinnipiac University’s School of Communications and author of “The Future of Business Journalism: Why It Matters for Wall Street and Main Street,”This was a. “They can spend the money that Axios needs to expand.”
The deal is still impressive. According to Axios’ revenue figures for last year, $86 million was earned. President Roy SchwartzThe multiple at purchase would be 5 times the revenue, and it is estimated that this year’s revenue will reach $100 million.
Digital news sites that are ad-supported can experience a decline in value during recessions due to the loss of ad dollars. However, digital news sites with a growing subscriber base will likely increase in value over the same period. It’s possible that Cox realized it was better to meet a high asking price now lest the total continue to rise in the coming months.
Axios — which focuses on political, technology and business news — now joins Politico (also started by Axios co-founder Jim VandeHei) and The Athletic as privately-held media companies scooped up for big bucks in recent years. German-based Axel Springer purchased Politico in October 2021 for around $1 billion. The Times bought The Athletic in a staggering $550million last year.
SPACs (special-purpose acquisition companies) have been created to aid potential sales negotiations and IPOs of media companies like Media Corporations. Vice Media GroupAnd BuzzFeed. Though Axios didn’t use a SPAC in its negotiations with Cox, it’s a trend that has raised concerns from certain sectors of the media industry, such as The Information founder and CEO Jessica Lessin, who hasn’t accepted outside funding since launching the media outlet in 2013.
We congratulated the Axios team for their high-quality news executions since its launch in 2017. Submitted, “The deal makes me sad however but it confirms one of my biggest fears: that no investor-backed news brands will survive the coming decade.”(Full Disclosure: The founder Sharon Waxman and private investors founded the independent media company.
The continued emphasis on scale — or the accumulation of assets, customers and leverage — throughout the media industry has created a consistent hunger from larger entities that’s satiated through the acquisition of smaller companies. This can pose questions about the relationship between editorial and revenue.
As part of the acquisition, Cox — which previously invested in Axios in 2021 — will reroute an additional $25 Million into the company and help expand the digital news site’s bullet-style local news coverage to additional cities. The company’s software division, Axios HQ, will be spun off into a standalone company. VandeHei and fellow co-founders Mike Allen and Roy Schwartz will remain on the company’s board and in charge of its day-to-day operations while the editorial team is said to be insulated from ownership control.
“It’s an evolution that traditional media companies have been undergoing in the past decade,”Roush commented on the recent rise in smaller media companies being acquired by larger entities. “They’ve finally seen that companies like Axios and Politico do newsletters very profitably and that this is a business strategy of the future.”
Cox may have strategically made the purchase of Axios to improve cash flow. But the large private company boasted that it delivers in its press release. “$20 billion”In annual revenues. There may be synergies between Axios’ local news coverage and Cox’s local broadcast stations that can now be fully realized, as well as potential collaboration between Cox’s remaining newspapers and areas that Axios isn’t yet covering. Cox could be acquiring Axios to increase its relationships with advertisers, as more of their ad budgets go towards digital.
“I can see a scenario where Cox can now go to national advertisers and say, ‘You can have ads in all of our newsletters across the entire country as well as the papers we have left,’”Roush stated. “That offers them a deal that’s much more attractive than just selling then advertising in Ohio and Atlanta papers.”
At the end, it may just be a better situation than the German publishing company Axel Springer. Offert last yearBefore Axios pulled away from sale negotiations. (Axios was seeking between $400 million- $450 million at the time).
“Sometimes investors need an exit strategy and that’s all there is to it,”A media analyst said that. “What Cox wants to do with [Axios] is anyone’s guess.”
