It’s a tough market for digital news sites and blogs — and Gizmodo Media Group is starting to look like the latest casualty.
The money-losing operator of sites like Jezebel, Deadspin and the Onion is still struggling to find a buyer — six months after it got put on the block by Univision, the Spanish-language broadcasting giant, sources told The Post.
Earlier this month, “more than two” suitors submitted offers in a second round of bidding that began late last month, insiders said. Nevertheless, Univision — which acquired Gizmodo in August 2016 when it scooped up the assets of bankrupted Gawker Media — is still casting around for better offers, according to a person with knowledge of the process.
“The process has been active, and it’s all going to boil down to price,” according to a source familiar with Univision’s thinking. “Univision is not interested in giving it up for nothing.”
Nevertheless, insiders say it could have a tough time getting the price it wants, even though Gizmodo brings in between $70 million and $80 million a year.
Sources said current bidders include Bryan Goldberg — the hard-bargaining owner of Bustle Digital Group who last month scooped up the once-hot, millennial-focused site Mic for $5 million. Mic previously had been valued by investors as high as $100 million, according to reports.
Indeed, times have changed from a few years ago, when venture capitalists were throwing millions at every business idea that looked like a possible moon shot, said Neal Zuckerman, a partner at Boston Consulting Group.
“Historically, venture-backed businesses are valued on the hope of the future,” he said. “What’s happened over the last couple of years is that people realized that making money is the purpose of the business.”
Zuckerman said he had no specific knowledge of the Gizmodo auction, but added that the market for digital media acquisitions is “frosty, not frothy.” There are many firms on the market, most of them with bloated valuations based on revenue and the size of their audiences, not profitability, he noted.
This summer, a source told us the going rate for Gizmodo was between “$100 million and $120 million, or 2 to 2.5 times forward revenue. Now, insiders believe Univision is looking for around $80 million.
Buyers, however, are looking for bargain-basement prices. When Bustle acquired Mic, the site had about $15 million in revenue a year and sold for a quarter of that, according to a source.
Other digital media companies previously rumored to be kicking the tires on Gizmodo — Penske Media, IAC and Ziff Davis — declined to comment on their current interest.
Univision declined to comment.
Univision has made it clear that Gizmodo is no longer part of its new strategy. In March, it scrapped plans to go public and ousted chief executive Randy Falco along with 200 employees. Under new CEO Vince Sadusky, Univision is doubling down on its “core strength,” Spanish-language TV and web broadcasting, as it streamlines for a potential buyer, sources told The Post.
Univision is looking to sell the Gizmodo group as a unit and not spin off the titles individually, although some execs inside the company believe they could get more if they chopped it up.
The company’s reluctance is linked to the fact that the only money-making properties of the lot are Gizmodo, the Onion and the Root, sources said. Univision does not own humor site the Onion outright — just a controlling stake — and African-American news site the Root is too small to make a meaningful dent.
“The value to the customers is on the individual brands,” a source said. “There’s some value in having shared scale and an operation that can take advantage of that scale, such as driving higher sales, reducing costs. But that’s a tough business right now.”