Tronc Zooms In On Us Weekly Magazine AcquisitionTuesday, March 7, 2017
Tronc Inc. is in talks to buy celebrity magazine Us Weekly for $85 million to $95 million, according to media analyst Ken Doctor.
The move could give the Chicago media company extra entertainment content, and possibly traffic, for its publications including the Los Angeles Times.
Tronc holds about $198 million in cash, according to public filings, suggesting that it is capable of financing the deal with Us Weekly’s owner, privately held Wenner Media in New York.
Wenner planned to sell Us Weekly to New York-based American Media Inc. until a few weeks ago, according to Doctor, leaving an opening for tronc. It was not clear how much debt is held by Us Weekly, but Doctor said the magazine reels in $15 million to $20 million in Ebitda on $125 million to $150 million of revenues, citing sources familiar with tronc’s negotiations.
Neither tronc nor Wenner immediately responded to requests for comment Tuesday.
Tronc has been on a quiet buying streak over the past several months, picking up the Daily Meal, a food website, and the Active Times, a fitness and outdoors website. It did not disclose the value of the acquisitions. Doctor reported that tronc also recently purchased the Cube, a video streaming website that focuses on high school sports.
While these acquisitions may provide tronc with additional page views, it’s still unclear if the media company will be able to translate that traffic into ad revenue or digital subscriptions.
By owning Us Weekly, tronc could pull national entertainment stories into its various regional newspapers and websites. It could stand to build a particularly strong celebrity focus at the Los Angeles Times, which already aims to be an authoritative voice on Hollywood.
“Bringing Us Weekly content into the entertainment sites of all these tronc papers, … that’s a synergy, an upside,” Doctor said, adding that the stories would have to be carefully hand-picked to avoid a clash of brands. “Whether that helps them sell subscriptions, that’s another question.”
If the Times and Us Weekly join forces, the combined companies will still face considerable competition against the host of entertainment-focused publications, such as Variety and The Wrap, that jostle for many of the same stories on Hollywood scoops and scandals.
Tronc’s stock on Tuesday dropped less than 1 percent to close at $13.60 a share.