Complex Has a Buzzfeed Problem + How to Value Podcast Networks
Chris Erwin
M&A and strategy advisory for creator economy | 3x founder and digital leader | Savannah real estate investor
Welcome to?RockWater Roundup! Analysis to make you a better investor and operator in all things media x commerce.
Today we discuss how Complex can get its groove back (get out of the way Buzzfeed!) and the new normal for podcast valuations.
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Complex Has a Buzzfeed Problem
Complex Networks?was a digital media darling.
Here’s how it can get its groove back.
First, some context…
Prior to the 2021 sale to?Buzzfeed, Complex was:
Today that's worth 1-2x revenue, or $300M+
But Complex is stuck under Buzzfeed, w/ an Ent Value of just $188M.
(aka $81M mkt cap plus $157M debt less $50M cash).
That’s a 0.5x multiple of $413M 1Q23 LTM revenue.
Yup, bankers should run an M&A process for ALL Complex.
I’d love to see old mgmt come back for a PE-backed buyout. And give top talent like Sean Evans good incentive equity.
Lastly, Buzzfeed should de-list from NASDAQ, remove Jonah as leader, recap or shut down if no good path forward, and stop making headlines that make all digital media look bad.
领英推荐
How We Value Podcast Networks in 2023
I’ve reviewed dozens of podcast network P&Ls.
Here’s how I value subscale podcast companies…
For past few yrs podcast networks traded for 4-7x revenue, on avg. And some traded for 10-12x (crazy!)
But we’re in a different era now.
New buy-side dynamics won’t be risky land-grab bets from big tech (Spotify) nor big audio strategics. And new investors won’t be VC.
New capital allocators to audio will be PE and family offices. And strategics where combo logic is strong.
They will buy at low single digit multiples, 1-4x, and buy multiple podcast co’s at once. Aka a roll-up strategy.
Network revenue will be valued less than O&O revenue. One-time items like EP and option fees will be discounted unless track record of consistent upstream IP revenues.
These new buyers will seek cash flow, revenue diversification, and steady growth.
They will achieve that by growing content output at smart unit economics, proactive ad and licensing sales (global focus), and reducing overhead through shared services.
This may be a tough pill to swallow. Founders and investors will get diluted in new rounds, or see little $$ value in majority sales.
But there’s a bright side.
The chance to continue building, alongside great teams, now with better discipline. And get upside in another swing at bat.
NOTE: premium assets with strong financial performance will trade higher. But that won’t be the norm.
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Newsletter Consulting @ leverage letter // Operator @ The Water Coolest
1 年That means they need to find someone dumb enough to pony up like $80 million ??
DeFi CMO | Web3 Advisor | Music Disciple #teamhuman ??
1 年Conversion of attention into ad revenue that converts into more attention that converts into ad revenue that converts… ?? Game is tired. Time for new revenue streams. Example: The #1 revenue stream for the top 25 media franchises all time is by far and wide merchandise. With advances in digital product (and experiences) in parallel to physical, the zero sum game of the last chapter of the internets attention is inevitable. I love when pure audience purchases miss the entire “alpha” opp vs the already existing “beta”…the old will die hard. A new dawn awaits.