Coverage: Penske buys majority stake in Rolling Stone

Penske Media Corp. has acquired a controlling interest in Wenner Media, parent company of the iconic magazine Rolling Stone, the company announced Wednesday.

Shannon Bond and Matthew Garrahan of The Financial Times had the news:

The investment by Penske Media Corporation brings to an end Mr Wenner’s 50-year control of Rolling Stone, the last remaining asset held by Wenner Media, which has been under increasing pressure from wider industry upheaval and its own strategic stumbles. The deal gives Rolling Stone an enterprise value of more than $110m, according to people briefed on the transaction.

Mr Wenner sold a 49 per cent stake in the title last year for an undisclosed sum to BandLab Technologies, a music start-up founded by one of the richest families in Asia, in an effort to diversify revenues and increase its international reach. Earlier this year, Wenner Media sold its other titles, the celebrity magazine Us Weekly and the men’s lifestyle monthly Men’s Journal, to American Media, the owner of the National Enquirer, and freed itself from a heavy debt load dating back to 2006.

Mr Wenner will become editorial director of Rolling Stone. His son, Gus Wenner, who is currently Wenner Media president and chief operating officer, will remain president of the business. PMC will hire a new editor-in-chief.

Kara Bloomgarden-Smoke of Women’s Wear Daily reported that Penske has invested or bought 18 publications since 2003:

“I am so proud of our accomplishments over the past 50 years and know Penske Media is the ideal match for us to thrive in today’s media landscape,” said Jann Wenner, who will stay on as editorial director of Wenner Media.

“We couldn’t ask for a better partner than Jay and Penske Media to invest in our company’s future success. They understand the importance and impact of Rolling Stone, and we are thrilled for this opportunity to grow our business together,” said Gus Wenner, who will retain his position as president and chief operating officer of Wenner Media and join Penske Media’s advisory board.

Penske Media, founded in 2003, is a leading digital media company with significant experience in the entertainment, technology, fashion, retail and luxury media segments. Having made investments in more than 18 industry-leading trade and consumer brands that include Variety, WWD, Robb Report, Deadline, Beauty Inc, FN, IndieWire, BGR, and other leading properties, Penske Media’s digital media expertise and complementary portfolio will be key advantages in propelling Rolling Stone to significant growth, profitability and long-term success.

Mike Fleming Jr. of Deadline reported that this deal is Penske’s biggest ever in a single title:

It is the biggest investment in a single title that PMC has made, and rivals the amount paid for Fairchild Publications and its titles that include Women’s Wear Daily. The deal broadens the company’s portfolio, one that include Deadline Hollywood and more recent acquisitions Variety, WWD, IndieWire and The Robb Report.

Penske closed the deal today after a final meeting with Wenner. The competition was spirited for ownership of the magazine, and rival bidders reportedly included THRowner Todd Boehly’s Eldridge Industries; the music producer Irving Azoff; and the Sinagpore-based BandLab, which bought a 49% interest in 2016 that it continues to hold.

Wenner expanded his company by broadening into ownership of Us Weekly and Men’s Journal, and then took on debt when he repurchased Us from Disney. He has sold off those other assets. The magazine is known for its sharp commentary on music, politics and social issues, though it suffered a black eye for publishing an exposé on campus rape at the University of Virginia that it was forced to retract. Its coverage on the polarizing rise of President Donald Trump has been in keeping with the spirited origins, when the magazine became famous for the journalistic exploits of writers including Hunter S. Thompson and Cameron Crowe.