DOJ investigating Penske Media’s deal to buy The Hollywood Reporter

Post learned that the Justice Department is investigating antitrust concerns over Penske Media’s acquisition of The Hollywood Reporter.

A formal and “aggressive investigation” of the merger said the Justice Department was concerned about putting three of the four major trade magazines covering Hollywood under a single roof, according to sources close to the situation. Said that it started.

In late September, PMCCEO Jay Penske, son of Auto Race Kingpin Roger Penske, signed a $ 225 million deal to buy 80% of Hollywood reporter’s parent MRC. With this merger, the influential music industry magazine Billboard and Atmosphere. The transaction is expected to be completed by the end of the year.

According to sources, DOJ officials will contact third parties such as advertising agencies working with digital media companies and Hollywood talent agencies representing actors and musicians, and the merger will hurt advertisers who want to reach professionals. It is said that it is judging whether there is a possibility. Media audience.

The Justice Department is also concerned about whether the merger could create barriers to entry for potential competitors, sources familiar with the situation said.

The Justice Department declined to comment. A PMC spokesperson also declined to comment.

PMC already owns the entertainment industry magazine Variety and Deadline, as well as Rolling Stone and the industry magazine Music Business Worldwide.

The acquired boss, Penske, has long longed for the Hollywood Reporter, known for breaking the tragic story about Hollywood insiders. Condé Nast is said to have tried to buy THR in 2016, and Hill owner Jimmy Finkelstein reportedly went around it with a $ 100 million offer two years later.

According to one source, the Justice Department’s investigation is likely to take at least several months. It is not yet clear whether the DOJ will file a proceeding to block the transaction.

However, insiders said the Justice Department had precedents blocking small-scale media transactions, and the PMC transaction was a $ 375 million merger between the federal government’s top-selling cinema ads, Cine Media, six years ago. He said it would look the same as if it had been blocked. And its crappy rival, National Screenvision.

In that case, the DOJ did not like the idea that one player controls 88% of cinema ads. Five months later, CineMedia abandoned the proposed acquisition.

PMC cashes thanks to a controversial $ 225 million injection from the Saudi Research and Marketing Group, a publicly traded company closely related to the Saudi royal family, which has acquired a passive 20% stake in PMC. Merged in.

Formerly known as Valence Media, MRC consists of a movie and television studio, and editing properties. In addition to trade magazines, he owns Dick Clark Productions, the studio behind shows such as the “American Music Awards” and “So Do You Think You Can Dance?” And “Billboard Music Awards”.

The proposed merger between PMC and MRC has already overturned business and editorial operations. MRC’s non-editing staff were temporarily dismissed as the merger reduced 15% of the approximately 50 back office workers, or approximately 325 accounting, human resources and other administrative tasks.

DOJ investigating Penske Media’s deal to buy The Hollywood Reporter

Source link DOJ investigating Penske Media’s deal to buy The Hollywood Reporter

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