Forbes magazine is up for sale and it's owners expect it to fetch around $500 million. However, a question arises: with the decline of the publishing sector, who will buy the company?
The Forbes family, which run the 96-year-old magazine, well known for its business news coverage as well as tracking the wealth of billionaires across the globe, is one of the most prominent families in the media industry. The family now wants to sell the company for between $400 million to $500 million.
"We're organising a process to test the waters regarding a sale of Forbes Media. We have hired Deutsche Bank to represent us, and we expect interest from numerous suitors," said Mike Perlis, CEO of Forbes, in the memo, obtained by Reuters.
Forbes is not the only magazine that is struggling in the media industry. In early 2013, the Graham family decided to sell the Washington Post to Amazon.com founder Jeff Bezos for $250 million. This year, Boston Red Sox owner John Henry also paid $70 million to acquire the Boston Globe. In 2007, the Bancroft family sold the Wall Street Journal to Ruert Murdoch-owned News Corp, while McGraw-Hill Cos. sold Businessweek to Bloomberg LP in 2009.
The print edition of magazines have been fighting to keep pace with the web publications. Newsweek, which shut down its print edition last year, is an example of the industry's turmoil. IAC/InterActiveCorp sold Newsweek to International Business Times (IBT Media) last month for an undisclosed sum.
Forbes has tried to push and expand its online presence in 2006. The company also sold 40 percent of its stake to Elevation Partners for $300 million.
A Reuters report, citing sources familiar with the matter, said that the sale proceeds of the company will help the company to repay investments made by Elevation Partners.
The magazine's online business may make it attractive to big web-based companies such as AOL or Yahoo, as opposed to print magazine publishers. Or even billionaires. According to Stewart Pinkerton, who wrote about the Forbes family in his 2011 book "The Fall of the House of Forbes," said in an interview that he always expected "that some rich guy in the Middle East, or some guy in Hong Kong, or a Russian oligarch would buy it."
Forbes Media's U.S. advertising sales were $275 million last year, which is down by 19 percent since 2008. Forbes also reported that out of its total ad revenues, digital ad revenues now make up around 55 percent, when compared to print ad revenues which total to around 45 percent.
There is no doubt that the company's core business has contracted in the recent years; however, with such a deterioration in the industry, it will be interesting to see if the company is able to sell its business for around $500 million.
