Tesa Lau

Ziff Davis acquired CNET for over $100M. The new owner is betting on more digital M&A with its $670M warchest. That price is down from $1.8B CBS paid for it in 2008. And $500M current owner Red Ventures paid for it in 2020. Let’s break it down👇 ---SELLER: CNET--- • Tech news and reviews site • Drives traffic via SEO • Monetizes via affiliate links • 38M visitors in Jun 2024 • Launched 1994 ---M&A HISTORY: CNET--- • 2002 CNET Networks acquired tech publisher Ziff-Davis Inc. (different co) and ZDNet for $1.6B • 2008 CBS acquired CNET Networks for $1.8B • 2020 Red Ventures acquired CNET for $500M ---SELLER OWNER: Red Ventures--- • PE-backed marketing-turned-media company • Provides client services, owns brands, makes investments • Portfolio incl Bankrate, Lonely Planet, Points Guy, others ---BUYER: Ziff Davis--- • Vertically focused digital media and internet company • Brands incl PCMag, Mashable, IGN, Retailmenot, Lifehacker • 2010 CEO led buyout of ZD w/ Great Hill Partners • 2012 ZD sold to J2 Global, went on M&A spree • Founded 1927 as mag publisher ---FINANCIALS: Ziff Davis--- Stock price as of 10:10AM ET on 8.12… • Stock price: $41.64 • Mkt Cap: $2B • Down 38% YTD • Down 39% YoY 1H 2024 financials as of 6.30.24... • Revenue: Up 0.3% to $635M • Adj EBITDA: Down 2% to $197M • Adj EBITDA margin: Down 0.7 pps to 31% • FCF: Down 27% to $73M • C&CE: $687M ---DEAL DETAILS--- • Undisclosed • Will close in 3Q 2024 ---DEAL VALUE PROP--- • Audience is attractive to tech advertisers • Target consumers/businesses navigating tech/telecom purchases • Part of ZD digital media rollup strategy ---WHAT ELSE I FIND INTERESTING--- I'll write more about the deal in my newsetter this Friday. I'm curous to dig into financial performance trend of Ziff Davis, which we can see in public filings. Of note, its 1H 2024 performance has declined VS 1H 2023. Wonder what the key macro VS micro drivers are. I want to better understand viability of its digital media rollup strategy, and future M&A strategy, particuarly since it has $670M of cash on hand and CEO Vivek Shah said he wants to keep doing deals. --- I'm the founder of RockWater Industries. We do M&A and strategy advisory for media, agencies, and creator economy. My DMs are open.

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SiriusXM shared their Q2 earnings earlier today... Let's dive in! First, the company continued to lose subscribers, but the loss of 173k was nothing compared to the Q1 loss of 500k... so that's good. They barely missed revenue projections ($2.18b vs. $2.19b), which is still down 3% YoY. Now, SXM doesn't break out podcast revenue; they bundle it with "off-platform," which includes Pandora and podcasting, which generated $528m, up 2% YoY. But how much of that is podcasting? First, let's take a look at Pandora. In Q2, they lost 41,000 paying subscribers (64k last quarter) and now report 6 million paying subscribers (compared to Spotify's 246 million). I have to ask: What the hell is Pandora, anyway? There was a time when Pandora could have owned the podcast space. In 2015, Pandora was the biggest music app & did a huge deal with Serial. Had they had any strategy for podcasts other than waste money on Serial, the landscape would look entirely different today. I digress. Back to pod revenue: iHeartMedia reported nearly $100m of podcast revenue in Q1. If you look at weekly downloads on the Triton Digital ranker, iHeart has about 34% more weekly downloads than SXM. So, we can estimate that SXM is seeing $65-75m of ad revenue on podcasts per quarter, but it's a total guess. Another interesting bit: SXM is launching SiriusXM Podcasts+, a subscription offering on Apple Podcasts that will include ad-free and exclusive content from its top shows like SmartLess. This is a total departure from the walled garden of SXM's past, but it's a smart play. I wonder if any Howard Stern content will also be included on Apple...? Finally, when asked about the most significant growth areas, CCO Scott Greenstein said, “Obviously, it's in podcasting." SXM knows the sub business for satellite, and Pandora is declining, and their push into podcasting is an effort to replace those offerings - no longer just as a companion offering. And while ad revenue is growing, they want to stay in the subscriber business, so I expect to see a big push with subscriber-only content, live events, etc. In January, I predicted the podcast industry would 1) do more big licensing deals and 2) make a major push into subscriptions. SXM is going all-in on these. The good news for SXM is that their subscription business is still a cash cow despite declining revenue, so they have the time to figure it out. -- I'm the founder of DWNLOAD Media, a fund that invests in the audio space. If you'd like to learn why now is the time to invest in podcasting, DM me! I'll also recap all of the Q2 earnings via email. Sign up: https://lnkd.in/eysH5x5C Read the Q1 Recap: https://lnkd.in/etkGMXa7 Read the 2022 Outlook: https://lnkd.in/eW9nPCZQ #podcasting #audio #sxm #siriusxm #investing

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DULCEDO Management bought Node App for $13M. This marks Dulcedo’s 5th acquisition since 2016. Let's break it down... ---SELLER: Node--- • AI-powered influencer marketing platform • Mission = bridge gap between small businesses and micro-influencers • Founded 2019 by Armin Faraji, Mackenzie Dérival ✌🏾 • Initially focused on restaurants, expanded to ecom brands • Focuses on Instagram, TikTok campaigns • 2021 raised $1M seed round from Techstars, Alchemist, strategic angels ---TECH OVERVIEW: Node App--- • In 2022 selected for Google for Startups Accelerator program • Pioneered a machine-learning technology to revolutionize agency workflows by improving influencer discovery and data reporting • “Creators can participate in brand campaigns in 3 clicks via Node, as opposed to pitching/negotiating with brands” • “Brands can create a campaign and begin interacting with influencers within 5-10 min of landing on Node's website” ---PERFORMANCE HIGHLIGHTS: Node App--- • Over 2,000 clients across North America • Generated “tens of millions of social media impressions” • Clients incl Kraft, Samsonite, Jarritos, St-Regis, Marriott • Has activated 5,000+ content creators in campaigns • Creators include A-list models, elite athletes, actors, social influencers • During pandemic scaled from 30 to 800 brands five months ---BUYER: Dulcedo Group--- • Global talent mgmt and digital marketing agency • 4 divisions – Models, Sports, Gaming, Influencer • Offices in Montreal and Toronto • Founded 2008 by CEO Karim Leduc • 3 co-owners incl founder • 70+ team members ---M&A HISTORY: Dulcedo Group--- • 2022 acquired C4G, a startup esports marketing agency • 2016 acquired 4249, an influencer relations agency • 2023 acquired Influence + All Management • 2023 acquired Sundae Creative Agency • 2024 acquired Node ---DEAL DETAILS--- • $13M purchase price • No other details were disclosed ---DEAL VALUE PROP--- • Give Node added funding, resources for growth • Access to Dulcedo's 300M network following  • Access to Dulcedo’s diverse creator roster to support IM campaigns across various industries • Accelerate development of AI-enabled tools to enhance the IM campaign lifecycle ---POST DEAL OPS--- • Dulcedo CEO will serve as interim Node CEO • Node co-founder Armin Faraji moves to COO • Node co-founder Mackenzie Dérival remains as CPO ---WHAT ELSE I FIND INTERESTING--- I'll write more about the deal in my Friday newsletter. I'll estimate Node's revenue and EBITDA, and discuss valuation multiples and likely deal structure. Signup link in comments below 👇 -- I'm the founder of RockWater Industries. We do M&A and strategy advisory for media, agencies, and creator economy. My DMs are open.

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Dude Perfect raised $100M for global biz expansion. The deal is getting lots of buzz, but our team’s math signals challenges ahead. Let’s break it down… DEAL DETAILS • $100 - 300M growth capital investment • Led by Highmount Capital • Unclear if 100% invested upfront OR draw down of commitment over time • No previous capital raised USE OF FUNDS • Hire mgmt team to expand biz • More live experiences incl int’l tour, consumer products • Grow content formats, frequency, channels, global localization e.g. animation, TV, movies, streaming • Extend brand beyond 5 founders by building talent network • New HQ in Frisco, TX as prod facility and “family-friendly entertainment destination”: – Retail store, podcasts / gaming / fan UGC spaces, trick shot tower, DP museum, mini golf, restaurants – Original plans for 3-story, 30 acre facility est to cost $100M+, 2 yrs to build COMPANY OVERVIEW: Dude Perfect • Digital-native comedy and sports media brand • Faith-based mission: “We’re about giving back, spreading joy and glorifying Jesus Christ”  • Other YouTube franchises: “Stereotypes,” “Overtime”, “Bucket List”  • Media brand also incl books, mobile games, board games and toys, and merch / retail / food and beverage partnerships • 25 current team members PERFORMANCE HIGHLIGHTS • 60M YouTube Followers, 17B views • Est 2024 revenue: $50M per DP • Est 2023 and 2022 revenue: $25M and $20M per WSJ  • Consumer product partnerships incl Nerf toy line, Columbia Sportswear • Partnered with A Parent Media co to launch a streaming service • ESPN “30 for 30” doc premiering at Dallas Int’l film festival • TV series on CMT in 2016, later aired on Nickelodeon • Alternate broadcasts for Amazon’s Thursday Night Football • 4 live nationwide tours as of 2023 ORIGIN STORY • Founded 2009 by 5 friends at Texas A&M • Cofounders = twins Coby Cotton and Cory Cotton, Tyler Toney, Cody Jones, Garrett Hilbert • Started as YT channel featuring trick shot videos INVESTOR OVERVIEW: Highmount Capital • Growth stage and middle mkt PE fund for tech, media, healthcare • Founded in 2023 by jason illian and David Hawkins • 4 team members on website + advisor • 3 team members have faith-based ties per bios • No other investments listed on website other than DP My takeaway... I really like and support the trend of increased investment into YouTubers and digital-native media brands. But as I wrote about in my 2024 State of Creator x Media capital markets reports (will link them below), investment must match market and opportunity size. To ensure good ROI, and to set good precedent for future investment into our space. The DP bet is exciting, but could be overly optimistic based on our prelim math. My colleague Michael Booth's post breaks the math down (link below). More analysis to come in my Friday newsletter. —- I’m the founder of RockWater Industries. We do m&a and strategy advisory for media, agencies, and creator economy. My dm’s are open. #media #agency #creatoreconomy

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Is Paramount's Tech Transformation Just a Pipe Dream? In the ever-evolving landscape of media, David Ellison’s announcement about transforming Paramount into a tech powerhouse stirred quite the conversation. Including by me: https://lnkd.in/eBsi2xbi But as we dive deeper, several challenges emerge, casting shadows of doubt over this ambitious pivot. #1. Financial Feasibility With Paramount grappling with substantial debt and pressing financial obligations, notably hefty NFL payments, the costs of attracting top tech talent become a significant concern. Can Paramount realistically afford this tech overhaul amidst economic uncertainties and a struggling stock? The talent war isn't won on ambitions alone, especially when competitors like Google offer more stable havens. #2. Creator vs. Coder Paramount’s tech ambition, while necessary, seems at odds with maintaining the creator-friendly environment Ellison dually promised. In an era when interest rates have climbed, balancing tech innovation with creative freedom is a tightrope walk. Remember, even Netflix, once a haven for creators with its blank checks during #ZIRP, is tightening its purse strings. How can Paramount navigate these waters without the cushion of a tech giant's capital or rising stock prices? 3. Building vs. Buying Tech Infrastructure David Ellison’s plan for Paramount involves a substantial commitment to developing in-house tech capabilities, focusing on cloud services, AI, user interfaces, recommendation algorithms, and ad-serving technologies. This approach aims to differentiate Paramount from competitors and enhance user experience. However, the tech sector’s history suggests leveraging established third-party platforms could be more cost-effective and reliable. Giants like Disney have successfully integrated platforms like BamTech, while HBO initially utilized external technology before transitioning. AMC Networks similarly relies on Brightcove for streaming technologies. The pivotal question for Ellison is whether the potential benefits of custom-built solutions justify the investment and risk, especially when patching together proven third-party solutions might yield quicker and more economical results. #InEssence... These challenges are monumental, yet not insurmountable. As we watch Paramount’s narrative unfold, one thing is clear: transitioning into a tech entity is more than just a strategic pivot—it’s a gamble on the future of entertainment itself. Thoughts? #Paramount #StreamingWars #MediaTech

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#Triller’s merger partner AGBA is up over 400% in the 4 days since the merger was announced. Finally, seeing the value in this little company unlocked. With the Tik Tok ban moving forward, Triller offers a lot to creators not available on Tik Tok including the ability to set up subscriptions or pay per views available on the TV deck (Triller TV), text based marketing (Cliqz) and music specific marketing tools (Fangage). The deal implies a stock price of $10.75 and it seems the market is moving it towards that number.

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🌟 MAKING A LIST AND CHECKING IT TWICE, MAYBE THREE TIMES!🌟 There is a lot going on... 🎬 The Power of Pivoting: How Entertainment Professionals Are Building on Their Foundations 🎬 The entertainment industry has always been about reinvention—but lately, it feels like that reinvention is happening at lightning speed. The Warner Bros. Discovery announcement to separate its linear arm from studios and streaming under a new corporate structure, hot on the heels of Comcast's decision, is just the latest sign of how much the industry is shifting under the weight of changing audience habits and economic pressures. The evolving media ecosystem, as brilliantly mapped out by Evan Shapīro, shows just how fragmented and dynamic the landscape has become. From streaming wars and mergers to new technologies disrupting traditional models, the way we consume and create entertainment is transforming before our eyes. Amid these shifts, it’s not just studios and platforms that are adapting—agency marketers, PR professionals, and communications experts are, too. These are the people who connect audiences to stories, build campaigns, and drive engagement, yet many have found themselves navigating uncertainty as the industry restructures. Budgets are tighter, opportunities fewer, and pivots more essential than ever. What inspires me, though, is the resilience and adaptability of my community. I’ve seen colleagues take their expertise in strategy, storytelling, and relationship-building into new industries or re-imagine their roles entirely within the evolving entertainment space. The ability to pivot isn’t just a skill—it’s becoming a lifeline. These professionals have skill sets that all industries desire: project management, creative problem-solving, cross-functional collaboration, storytelling and messaging, adaptability to emerging tech, relationship building, and crisis management. I’m not going to sugarcoat it—I can’t anymore. It’s tough out there for those of us who have spent years working for and with an industry that constantly reinvents itself. But I want to be clear about one major thing: we do not need to reinvent ourselves. We often hear that phrase, and it sounds like we’re supposed to scrap everything we’ve been to become someone entirely new. Instead, I believe we should take everything we’ve learned—every story, every connection, every skill—and bring it into this new chapter. I’m choosing to build on my foundation, not start from scratch. Here’s to the power of resilience and the strength it takes to adapt when everything around us is changing. 📸 Me in Montana a few years back building on my cattle herding foundations! #EntertainmentIndustry #Pivoting #Marketing #PR #Communications #Resilience #MediaEcosystem #FutureOfEntertainment

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Forbes' Charlie Fink talks about REPLIKANT Chat launch – REPLIKANT Debuts AI-Powered Chat Platform on Steam Replikant #REPLIKANTChat #ProductLaunch #AI #AICompanions #REPLIKANTEditor #NLP #CGCharacters #3D #RealTime #Games #LiveEntertainment #Education #VirtualAssistants #Comedy #Enterprise #B2C #SteamEarlyAccess #Forbes #News

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Night bought Bottle Rocket Management. Yup, more M&A consolidation amongst talent rep companies! BIG congrats to Chas Lacaillade, BRM’s founder and a close friend of mine. Chas is a shrewd operator, and over the years I enjoyed watching him build a high-performing creator management company. Awesome to see him pick a strategic partner that aligns with his plan for future growth and improved client servicing. RockWater Industries served as financial advisor to BRM. I therefore can’t go into deal specifics due to the NDA between our companies. Let's break it down… ---TARGET: Bottle Rocket Management--- OVERVIEW • Talent management firm for digital content creators • Founded 2015 by Chas Lacaillade • Bootstrapped, no outside capital • Focus on YouTube creators • Reps ~40 talent clients • Based in Austin, TX TALENT HIGHLIGHTS • Austin Evans • BroScienceLife • JerryRigEverything • UrAvgConsumer ---BUYER: Night--- OVERVIEW • Next-gen representation platform for artists • Founded 2015 by Reed Duchscher • 75-100+ team per LinkedIn • Reps 100+ talent clients • Based in Austin, TX BIZ UNITS • Talent - management, focused on digital creators being entertainers and entrepreneurs • Studios - content studio, helps digital creators create and package shows for TV, streaming • Labs - venture studio, pairs operators with creators to build companies e.g. Feastables • Capital - TCG-backed fund to invest in / acquire profitable creator-led businesses • Ventures - early stage venture fund, focused on tech OPERATING HIGHLIGHTS • Reps world’s largest Twitch streamer, Kai Cenat • First manager of MrBeast, helped catapult his growth • Launched Feastables in 2022, est $100M+ 2024 revenue CAPITAL MARKETS HISTORY • 2022 raised an est high 7 to low 8 figures from TCG • 2022 raised $100M from TCG for Night Capital • 2023 bought mgmt co LFM • 2024 bought The Roost Podcast Network ---DEAL DETAILS--- OVERVIEW • Announced 11.25.24 • Deal terms undisclosed DEAL ORIGINS • Night and BRM leadership have known one another for years • Lacaillade and Night President Ezra Cooperstein both worked at Fullscreen, an early YouTube MCN VALUE PROP • Bring a top digital manager into Night’s leadership team • Deliver larger and more exciting opportunities to BRM clients • Scale talent roster and offerings for Night’s brand and client partners • Scale Night’s seasoned digital talent team via BRM team additions • More leverage to recruit more digital-native clients ...I'll write more about the deal in my Friday M&A newsletter, signup link in comments 👇 -- I'm the founder of RockWater. We do M&A and strategy advisory for media, agencies, and creator economy. My DMs are open.

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