Butts n boobs for the win?
Now, I am not what would be described a “financial wizard.” But I have shared, with you, the time that I was invited to interview David Petraeus onstage in Miami and some ultra-exclusive moneyman gathering. The conference’s founder loved having a “wild card” at each of his events, thus me, and there I sat in a comfortable chair chatting Middle East business with the general.
Afterward, mingling with the hundred, or such, millionaires and billionaires, I got to speaking of my own investment strategies with the owner of the Boston Celtics basketball team. He listened, carefully, then said, “You are a unicorn. You get it exactly wrong such a large percentage of the time that you become valuable. Basically whatever you do, I would do the opposite and win.”
Yes, I have rotten instincts and so maybe the just-announced purchase of defunct Surfer magazine, plus the digital assets of Men’s Journal, Skateboarder, Snowboarder and other dribs and drabs from David Pecker’s a360 by “tech powered” media company The Arena Group for an alleged $25 million United States dollars makes all the sense in the world because I think it is stupid.
Per reporting, The Arena Group, which counts more than 240 titles including Sports Illustrated and Parade, the magazine that comes in newspapers that grandmas love, its own.
Ross Levinsohn, Chairman and CEO of The Arena Group, who had a spot of #MeToo trouble, bullishly declared, “For years, consumers have trusted Men’s Journal for exclusive lifestyle content and guidance on travel, gear, the outdoors, style, food & drink, and more. Additionally, the titles within the Adventure Network have long stood for excellence with passionate enthusiasts within the Ski, Surf, Biking, and Skateboarding communities. There are natural synergies between these brands and our existing audiences we can leverage and enhance through integration, distribution, and our playbook, driving incremental value, growth, and profitability. This strategic investment underscores our commitment to diversifying and devoting resources to opportunities where we see the most value across The Arena Group.”
Synergies.
Nice.
Not as nice as vectors, certainly, but still very cool.
A dear friend in the media space said unto me, “Hard to overstate how insane the $25 million figure is given that Men’s Journal was the only title driving any revenue at all and it’s unlikely it was doing more than $8 – $10 million, 90% of which was print and they’re shuttering print.”
Which leaves Surfer.
Was the butts n boobs contest a wild financial success?
Perfect for Levinsohn’s “frat house behavior trail” in any case.
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I was a proud subscriber of surfer mag. Still got the final copy in the plastic envelope it came in (“we’re all in this together”). Too bad it got destroyed by free, shit, content online. Weird thing when the subscription expired they started sending me Men’s Journals instead. Not a bad read actually (I was expecting “Men’s Health”).
no socks and bad tattoos. Mid life crisis that way ->
Are you really that Twitter guy?
Uh…hello, here and available.
A Fairy Tale Ending & Why I Cancelled Disney/
The prince grew up amidst the chaos of the 1960s…in a somewhat densely populated, yet somehow isolated beach community…his longings were to find the woman of his dreams, marry and settle down…on a distant island shore…Here the prince would provide for his wife and family amidst lush tropical forest, rich with edible fruits…rich with traditional native fishes. The Prince would gladly, and on a daily basis, hunt successfully and bring home the catch to his eager and ambitious young children…which would only please his loving wife…Children would learn of the wonders of nature, far away from the madding crowd, the world with which the prince knew…He was not pleased with what he had seen.
esquire has gone to crap…but here’s their no 1 best tequila…General Petraeus, here’s to your health…Chas, to be contrary (and wearing red tennies), have a vodka with cranberry…on the house!
https://hips.hearstapps.com…
Vectors >> Synergies
$25 million is peanuts and spare change to these guys. Just the online ad-supported digitized print-replica archives of all the magazines’ back issues alone will be an enduring and fat cash cow for the Arena Group. But that aside, the proliferation of aggregating brands under a few corporate banners is just more of the same elitist/capitalist/crony oligarchy that the USA and the world is, somewhat unwittingly, embracing.
Warren Buffett said, “Never invest in a business you cannot understand.” So it makes since that denizens of Beachgrit have bad instincts on a surf journalism product.
How long did it take you to find shoes to match the chairs and background?
The mag in the middle with the cibachrome on the cover was the first Surfer I ever purchased. Still can see it own the rack in the grocery market. That one magazine had a profound affect on my life. Not kidding! Still have it in the collection somewhere
I have that one too and the one on the left with Paul Gebauer on the cover at Sunset beach 1962.
Surfer mag changed a lot of peoples lives for the better.
I loved Sean Doherty’s articles in Surfer right before they stopped printing a print mag, maybe 3 or 4 years ago? Back in 1980 (I was 6) several surf mags changed my life growing up near the ocean in New York. We got them at an airport on the way to visit my dad’s family in Australia.
I remember a pic of Cheyne Horan ducking under the lip in that issue . I think I’d been surfing for a year or so.
Art Director: Hyatt Moore.
Not a Cibachrome (print chemistry) but a Kodachrome positive transparency.
(DM-ing Negs to see if we can get the person with a brain banned)
“For years, consumers have trusted Men’s Journal for exclusive lifestyle content and guidance on travel, gear, the outdoors, style, food & drink, and more.”
As a consumer and a man, I couldn’t agree with this statement any more. Full trust. Like how I trust priests and boy scout leaders.
Chas is mistakenly assuming that this purchase was in recognition of the potential to monetize these brands/companies. This is almost certainly about acquiring businesses that have carried back losses for years to use those losses as a tax advantage and reduce/zero out your taxable income in future fiscal years.
But assuming the seller already claimed those losses, how does the buyer of the business take advantage? Or is it forward thinking to future losses?
It’s called tax loss carryforward. You can generally offset your prior net operating losses against future profits. And if you can convince the IRS that the merger or acquisition wasn’t for the purpose of tax avoidance, you can buy a failed business for an amount that is far less than economic value of the tax loss carryforward would be to you to offset against your own future profits.
This is part of the reason why peasants like us pay taxes. With enough money and some competent M&A accountants and lawyers, you can largely avoid being taxed.
So they would be acquiring this for future ‘tax benefits’? Sound like a very similar idea to carried interest used by RE developers. And 100% – there are a gazillion tax loopholes yet interestingly nobody wants to close them.
“And if you can convince the IRS that the merger or acquisition wasn’t for the purpose of tax avoidance”
…by saying the magic word Synergy enough times?
and by keeping the business you’ve acquired “operational” for a few years before shutting it down, which is really easy when all it onstensibly has been doing since October 2020 is intermittently posting a short little surf article on its website once or twice a month.
Donald Trump. or at least the accountants who prepared his tax returns, knows what “tax loss carryforward.” means –
His poor business acumen meant he had massive accumulated losses he could use against profits for years.
This is what Pecker did when he bought the ASN titles for … debt acquisition and some cases of Mountain Dew. It’s an effective strategy made much less effective if you spend $25M on it.
Obviously a power play to gain control of the Surfer Mag online forum.
I’m sure there’s an opportunity for Chas to offload the wildly successful LodgeGrit …
or us military…
$25m for 240 titles – slightly over $100k for each. Understood that they were effectively generating $0 revenue but crazy to think that Severson’s life’s work is worth no more than $100k. And Warshaw. And Kampion. And Sam George’s! Collectively worth less than $100k.
You got to figure Ben Marcus’ work too though
all the while those same iconic mags were the gateway (i.e. photos in mags) for hundreds of pros to initiate their sponsorship earnings worth thousands and hundreds of thousands each!
Wasn’t “Surfer the bar” also owned by those guys? Also the web domain surfer.com which is not a bad domain to own.