Three years ago, I launched A Media Operator. For those that know the story, I just decided to write. From day one, I took a stance that media was a great opportunity, but that it took time. I took a stance that the most important department at a media company was the content team. And I took the stance that b2b media would have an amazing future.

It's been three unbelievable years. I met people who I now consider friends. I got my dream job (and then got promoted). And I turned this into a small media business in and of itself. I have all of you to thank for that. Whether it's sharing AMO with your colleagues, emailing me to agree or disagree, opening and reading, hiring me for consulting work (those projects were fun), thank you.

But I want to give a very special thanks to the paid members of AMO. Many of you have been paying for 2.5 years and continue to give me your money (or your company's because corporate card, am I right?). Thank you for supporting me. It means the absolute world to me.

To celebrate, I am giving 10% off an annual membership to anyone who signs up before the end of Friday. Just use the coupon code AMO3.

Now, let's hear about another company who deserves an abundance of thanks: my sponsor, Omeda.

Not every churned subscriber is a choice. Sometimes, the customer didn't even know they had unsubscribed. And yet, because of an expired credit card, the publisher loses out on revenue.

On August 17th, Omeda is hosting a webinar about how BNP Media used Omeda's technology to target auto-renewal subscribers whose credit cards had expired. By proactively reaching out to these people directly through Omeda's platform, BNP could increase auto-renewals and revenue.

Register for the 30-minute session here.

Now let's jump in...

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Not to be outdone by fellow DC media company Industry Dive, Axios announced today its newest investor, Cox Enterprises, had acquired it.

And so, to report on the news, let's turn to Axios' own coverage, which has a lot of details:

As I said, the entire Axios story details how Cox and Axios are positioning this deal, but it's worth looking at a few of the main talking points.

First, this is a successful, venture-backed media exit. It is a rare example of something that I often don't believe is possible. Unlike Industry Dive, which raised once and built its business, Axios repeatedly returned, raising ever larger rounds.

The most recent round in November 2021 had Cox leading at a $430 million valuation. This was after sales talks fell through with Axel Springer. And so, it's not all that surprising that Cox was the buyer, but it's worth celebrating. A news-first digital media company rapidly grew, developed a brand, and sold.

I think this is the exception to the rule. Yes, Lerer Hippeau, Greycroft, NBCU, and others will all get a return on investment. And considering the time, it's likely a solid IRR for them. But if investors and operators were smart, they wouldn't see this deal as an indication that venture-backed media companies can work. The BuzzFeed outcome is far more likely than the Axios one.

Second, it's interesting that Axios HQ is being spun out into its own, stand-alone company. I've long believed this was a distraction for Axios and didn't fit its core DNA. But, on the other hand, you could argue that it's why Axios was able to raise as much money as it did in an era when investors were running away from news (tech is sexier than news).

Nevertheless, this makes a lot of sense to me. According to The New York Times:

Cox wants a business that is going to be profitable and self-sustaining, so getting rid of the financial burden is a no-brainer. The Times reports that Cox will retain a minority stake in it, so it can still benefit from its upside if it does work.

Finally, we are starting to find a multiple for many of these digital media companies. Politico sold for 5x revenue with a blend of ads and high-priced subscriptions ($1 billion on $200m+ of revenue). Industry Dive sold for upwards of $500 million, so that's probably 4-5x revenue. And Axios is expected to generate over $100m in revenue and sold for over 4x revenue.

So, digital media companies at this scale can sell for 4-5x revenue. There are exceptions, of course. For example, the New York Times paid $550 million for a company that generated $65 million in revenue, which was undoubtedly richer than the above deals.

As more of these deals happen, it does create a firm floor. But anyone in M&A will tell you there's much more to a sale than just the price and multiple. In the case of Industry Dive and Axios, the management teams are sticking around, which might help push the price up. In the inverse, Politico's founder is no longer at the company, so maybe that compressed the price. Couple that with there being few buyers at the $1 billion mark.

So, what comes next for Axios?

Likely more of the same, to be honest. At this point, it's all an execution game. It'll continue launching into new local markets. It'll continue building its audience in the run-up to 2024. Other than putting $25 million onto the balance sheet, Cox acquires a business that will be self-sustaining once HQ is spun out.

I suspect Axios will start leaning more aggressively toward its premium newsletter product. This subscription product fits its DNA versus the software play. Whether Axios Pro is working is anyone's guess, but it has grown to five total newsletters targeting the sweet spot of $600 a year. It may not be the Politico Pro product of thousands—or tens of thousands of dollars—but I think we'll see a lot more play here over the coming years.

Congratulations to the Axios team. It's hard to get this big, and they did it. That should be celebrated.

Informa sells oldest b2b publication

It has been a busy 2022 for Informa. First, it sold 85% of its Pharma Intelligence division in February for $2.3 billion. Then, last month, it bought Industry Dive for upwards of $500 million. And now, it's announced that it sold a majority stake in Lloyd's List for $458 million. According to a CEO statement in its press release:

In late December, Informa released its capital markets day presentation, which talked about its wanting to sell these assets. It said it hoped to have $1.2 billion of "embedded value to be returned upon full sale and completed divestment of Informa Intelligence." It had struggled for the two years of Covid that it felt it had no choice but to give investors something, so why not sell what would command an incredibly high multiple?

The management team must be ecstatic with the outcome. Expecting $1.2 billion and getting $3 billion is pretty incredible. It sets Informa up for considerable success in the future.

Informa went down from three major business units—Intelligence, Academics, and B2B—to just the last two. And I suspect that it will look to sell off Academics when it gets the chance. In February, Flashes & Flames wrote:

I remain convinced that the last sentence is the outcome with one caveat. Informa doesn't want to be an exhibition pureplay but a b2b marketing data pureplay. I wrote about it when I discussed Industry Dive being acquired:

Imagine the business you can build with that. Blending events and digital data will give Informa an advantage that few b2b media companies have. Marketers will pay a lot for that because they'll be able to find incredibly high-quality and actionable leads. Informa has a plan. And I'm very interested to see how it plays out.

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