The floor has fallen out from under media valuations, but if you're Forbes Media's owner, you still think that you can command a high revenue or EBITDA multiple based on lofty goals. It almost feels like we're still living in the middle of the SPAC-era.

According to Axios, Sun Group is trying to get investors excited to participate in its bid for Forbes, valuing the company at $800 million:

While I find these numbers to be entirely made up, it's how it intends to grow the revenue and earnings that is truly phenomenal. In a nutshell, it thinks that between Forbes Valley, Forbes Club, and Forbes Education, it'll be pushing $1b+ in annual revenue.

I'll dig into each of the proposed business units, but the thesis behind all of this is that a lot of traffic is all you need to build profitable businesses. And since Forbes has so much traffic, the acquiring team believes it can funnel people to the respective opportunities.

The problem with this strategy is that it is attempting to activate a passive audience. Someone who visits a site to read an article about a topic is not immediately going to activate just because something is in their face.

This is a big reason why banner ads are only so effective. Seeing that JP Morgan Chase ad might allow for passive brand growth, but actively, a user isn't going to suddenly realize they need to open a new bank account. It's a little different on a niche site because the context of the advertisement and content are more in-line.

So, what are these three business units? As Axios reports, they're:

1. Forbes Valley, which is basically an amped up recommendation business.
2. Forbes Club, which is a venture investment platform that investors think will generate "between $270 million to $290 million in cash flows by 2028."
3. Forbes Education, which will faciliate the creation of online courses using "Forbes' Rolodex of influential people."

The easiest business to execute is the first. Every consumer media company has leaned into affiliate revenue as a way of moving up funnel with their advertisers. Why only get paid for passive eyeballs when you can attempt to convert people to make a purchase and get a larger cut of revenue? According to Axios, Forbes owns 40% of its recommendation business, and the team expects to grow revenue to ~$400 million by the end of 2027.

Whether it can do that is, ultimately, a function of its investment in content. Forbes already has incredibly strong SEO, so if it can invest more in recommendation content, it'll be able to generate more money. There's no secret here.

Forbes Education is a bit more complicated. On the one hand, I think there is a lot of value in online education. Being able to provide learning without someone needing to fork over a ton of money for a college degree is highly valuable.

On the other hand, there was an aggressive overinvestment in education products over the past couple of years. Due to the pandemic, people had a lot of time to learn. But as things opened up, people reallocated more of their time to seeing their friends and less to learning. Many of the pandemic-era education companies have experienced layoffs because it's hard to get people to pay.

That doesn't mean there isn't money here, though. In its Q3 earnings, Udemy announced that it had annual recurring revenue of $350 million. If we assume the company is continuing to grow, it's obvious that there is a legitimate business here.

The question is one of execution and audience segmentation. Udemy has built a brand on offering asynchronous courses. People seek it out. Can Forbes, with all of its other content offerings, also execute on this in a cost-friendly way? This feels like a similar idea to its paid newsletter strategy. When I wrote about that, I said:

It is not going to convince an influencer to create a course on its platform without either a guaranteed up front payment or some guarantee on a level of promotion. And since Forbes has so much going on, how can it offer said guarantee? Why work with Forbes when you can do it alone or partner with a company like MasterClass?

And just because it has all of these users doesn't mean they are going to care. There must be intent for someone to pull out their credit card to start learning. Just throwing up an ad won't cut it.

So, while the idea certainly has some merit, the amount of execution is going to be so great, I have a hard time seeing Forbes making anywhere close to that kind of revenue.

Which brings us to Forbes Club, which is downright comical.

In essence, it wants to build a competitor to StartEngine, Republic, or any of these other crowdfunding platforms. Ever since the JOBS Act was signed into law back in 2012, it has been legal for private companies to raise from unaccredited investors in a more public format. And they have seen pretty big growth.

When StartEngine announced it was buying SeedInvest, the press release said that, "SeedInvest has supported over 300 startups, helping them to raise more than $470 million from 700,000 users" over its 10 year lifespan. In the same release, StartEngine also said that it had "over $650 million* raised to date from a community of more than 1 million users."

This is a growing business. But you'll notice that, between these two companies, they've only raised a collective $1.1 billion since starting. And specifically, that's $1.1 billion raised for its customers; not $1.1 billion for itself.

The money SeedInvest made was broken into two pieces. The first was the 7.5% that was charged for all cash that was raised. So, if a company raised $1 million, SeedInvest got $75,000. SeedInvest also got a convertible note on the company to show they had a stake in its success. So, if companies raised $470 million over its life, SeedInvest generated $37 million in net cash revenue.

And they have a decade head start on whatever Forbes would build. If we assume that Forbes charged a similar fee structure, it would need to generate over $3 billion in fundraising activity to get anywhere close to its revenue targets. The entire ecosystem doesn't generate that kind of money in a year, so why would Forbes see this kind of growth?

Honestly, the best way to sum up this idea is with the following: Forbes wants to somehow generate hundreds of millions of dollars of revenue—more than some of the leaders in their respective areas of focus—with a bunch of side hustles. And when you look at it like that, it becomes obvious that these numbers are not based in reality.

Does that mean Sun Group will buy Forbes? It's anyone's guess, but there is a powerful emotion at play here. Vanity. Forbes is a strong brand, whether those that work in media respect it or not. And so long as that brand exists, people will want to own a piece of it.

But if one of those prospective investors asked me whether they should invest in Forbes at this valuation—and with these growth projections—or light their money on fire, I'd tell them to channel their inner Heath Ledger and light it up. It'll be a lot more fun.

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