Variety magazine sold for $25m

Variety, the 107-year old US entertainment industry trade bible, has been sold to the parent company of Nikki Finke's digital upstart Deadline.com for $25m (£15.6m).

The deal, confirmed on Tuesday, marks Variety owner Reed Elsevier's exit from the US trade magazine market.

Variety has been bought by Penske Media Corporation (PMC), which acquired the hugely influential six-year-old digital showbusiness news site Deadline in 2009, and its financial backer, Third Point

"As a company, we plan to rapidly build upon Variety's foundation, while extending this invaluable brand's presence across the web, broadcast, mobile and international markets," said Jay Penske, chief executive of Santa Monica-based PMC.

Variety, which publishes daily and weekly print magazines and has a digital paywall strategy for its website, has been outmanoeuvred in its traditional Hollywood patch by online startups such as Finke's Deadline.com and The Wrap.

Finke turned her weekly Deadline Hollywood print column in LA Weekly into a daily blog in 2006, providing fast-paced breaking news and becoming a must-read in entertainment circles. Penske acquired Deadline in 2009.

Mike Fleming, a 20-year veteran of Variety who defected to Deadline in 2010, said he would be "surprised" if the new owner kept Variety behind its paywall or in its current form as a daily and weekly print publication. Variety has a staff of about 120.

According to the LA Times, Daily Variety's circulation is about 28,000, the weekly magazine 30,000, and Variety.com has about 17,000 paying users. Some of the online subscribers also receive print editions.

PMC also owns entertainment websites TVLine and Movieline, celebrity news and fashion site HollywoodLife, and mobile gadget website BGR.

Reed Elsevier had owned Variety, until recent years the dominant industry news source for the US entertainment sector, for two decades.

Mark Kelsey, chief executive of the company's trade magazine division, Reed Business Information (RBI), said: "With Reed Business Information's increasing focus on data services and the sale of our other US print magazines, it makes sense for us to sell the business."

Reed Elsevier has been withdrawing from trade magazines in recent years, selling off 45% of the RBI operation since 2008. The magazine division accounts for just 11% Reed Elsevier's total revenues.

In 2007, 39% of RBI's revenues came from print advertising. In the half year to the end of June, it accounted for just 13%.

Reed is also seeking a sale of its magazine portfolio in Australia. A spokesman declined to comment on whether the UK magazine business, which publishes titles including Farmers Weekly and New Scientist, would be next to be hived off.

RBI, which still publishes nearly 100 trade titles, made £347m in revenues and had an operating profit of £63m in the six months to the end of June.

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