Variety’s Buyer Better Have Deep Pockets

By Chris O'Shea Comment

The price tag for Variety has been estimated at about $40 million, but according to experts, it’s going to end up being way more than that once it’s bought. PaidContent spoke to several people who had access to Variety’s books, and the results aren’t pretty:

That $40 million is a pretty considerable amount of money, but the problem is you’re not done at $40 million. You’re buying a property that’s had a decade of deferred maintenance. Whoever underwrites this is going to have to do this with a plan of investing significantly post-purchase.

Yikes. Here’s another:

There’s always a bunch of risks when you don’t have a balance sheet that takes the parent company out of the equation.

And one more:

And while Variety‘s book still reports what this industry source termed as ‘modest profitability,’ the margins aren’t thick enough to overcome the haziness of the cost situation.

Thin margins and a cloudy cost? Sounds, um, exciting?