Variety's seemingly interminable sales process already represents a sort of development hell that, under other circumstances, the Hollywood trade would love to cover. But that doesn't mean the auction that has been dragging its feet all summer won't end with a flourish.
Indeed, as speculative reports trot out front-runner after front-runner, two of the most recently cited suitors actually make sense: Avenue Capital Management LP and Penske Media Corp. God forbid, though, they make sense for reasons articulated in the press.
No, Avenue Capital ranks as a qualified bidder because of its ties to Charlie Koones. PMC deserves recognition because it has Gerry Byrne on board not only as a vice chairman but as a company director. Allow us to note here that Koones was Variety's publisher from 2000 to 2007 and that Byrne served the same title in the same role the decade preceding the reign of Koones.
That the two are so intimate with the publication may account for delays in the auction that Variety owner Reed Business Information announced way back in March. Another reason may have something to do with financial inconsistencies that, according to sources, are holding up due diligence.
Variety's diligence problems are understandable, if only because an asset previously part of a 50-magazine portfolio must now be evaluated as a standalone business. That means its financials have had to be recast to reflect Variety's performance as a single title after RBI-US embarked on a going-out-of-business sale several years ago.
Further complicating matters is the return to group publishing that an auction victory by Avenue Capital or PMC would bring. Avenue Capital is the controlling shareholder of American Media Inc., which publishes Star, Men's Fitness, National Enquirer and a host of other titles. Koones, who already sits on AMI's board, could presumably be re-installed as Variety's publisher were it acquired by Avenue Capital.
However, as it's already contracted to do for Playboy magazine, AMI's Publishing Services segment could handle the Hollywood trade's advertising and marketing efforts, circulation and production management, newsstand distribution and back office operation. The fact that Koones also sits on the board of TheWrap Inc., an online competitor of Variety's, might bear additional fruit by way of consolidation.
A PMC win could result in a similar arrangement. The portfolio of online brands under the umbrella of the company founded in 2004 by auto-racing scion Jay Penske already includes Deadline, Movieline and TVLine. The addition of Variety to this mix would give PMC the flagship many believe it needs to be recognized as a bastion of serious journalism. And with the reinstatement of Byrne as publisher -- as with the reinstatement of Koones, for that matter -- Variety would again be in the hands of a publisher who ran it in its glory days.