Politico Seeks $1 Billion Deal With Axel Springer

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Washington news site Politico, popular with Beltway power brokers, is seeking up to $1 billion for a potential deal with German publishing giant Axel Springer.

Two people familiar with the matter said Politico, led by owner Robert Allbritton, is in talks with Axel about a potential investment or direct sale. They said such a deal would mean a high premium for Politico, which generates around $200 million in annual revenue.

This makes it one of the most expensive media mergers in recent memory. A $1 billion deal would equate to five times Politico’s annual sales. BuzzFeed, one of the largest digital publishers in the country recently announces a financial transaction that would have put it public at a valuation of $1.5 billion, or about three times its annual revenue. The New York Times Company is worth nearly four times its annual revenue.

A spokesperson for Mr. Allbritton responded to questions by citing an email sent to staff yesterday, where the owner partially said: “We don’t wink, we don’t nod about any pending deal”. Axel also declined to comment.

The German publisher is actively looking for media properties in the United States. The company bought Business Insider for about $500 million in 2015 and last year control stake At Morning Brew, a newsletter publisher.

Axel already has a partnership with Politico as a co-owner at Politico Europe, where the German company is trying to figure out what to do. Since he does not control the business, he cannot expand the business without the permission of Mr. Allbritton. People said a deal with Politico could solve this problem and also expand Axel’s presence in the US.

A merger with Politico could end Axel Negotiations to buy Axios, a rival news startup founded by Jim VandeHei, Mike Allen, and Roy Schwartz, all former veterans of Politico. (Mr. VandeHei and John F. Harris Started Politico in 2006 After leaving the Washington Post.) According to one of the people, Axios’ leadership did not aggressively pursue the deal.

Mr. Allbritton, a key player in the Washington media whose family owned a television empire, financed Politico. he finally sold his family’s television channels Approximately $1 billion to Sinclair Broadcast Group. After the debt, the family earned about $500 million from the sale.

Politico had a chance to sell to Axel a few years ago when it was a much smaller operation, but people said at the time Mr. Allbritton didn’t want to do that.

Mr. Allbritton has recently started focusing on keeping Politico’s stable stars and expanding the business. But the media landscape has changed dramatically, and the so-called talent economy has allowed famous journalists to launch their own ventures.

This year, three of Politico’s top employees – Jake Sherman, Anna Palmer and John Bresnahan – have left start punchbowl, a political news site. Mr. Sherman and Ms. Palmer were the well-known hands behind the Playbook newsletter, Politico’s biggest franchise.

CEO of Politico in February announced he was going to leave. Then, in June, Carrie Budoff Brown, longtime editor at Politico and running the US newsroom for half a decade, said: would go To join NBC News. Politico’s nearly 400 journalists are also in the throes of a unionization effort that could seriously increase the cost of the job.

Mr. Allbritton weighs the prospect of a lucrative payday with complete control over a well-read news site in the nation’s capital.

merger talks before reported by the Wall Street Journal.

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