LOS ANGELES – Daily Variety, the venerable show business “trade” magazine and Hollywood fixture for over 70 years, was put up for sale on Thursday as part of a cost-cutting plan by its parent company, Reed-Elsevier.
The Anglo-Dutch company said it would spin off Variety as part of a planned sale of its Reed Business Information publishing unit, which also includes such titles as Publishers Weekly, Broadcasting and Cable and Multichannel News.
While Variety is by far the best known brand in Reed’s RBI division, which publishes some 80 U.S. titles alone, company executives indicated they would prefer to sell the unit as a whole, though they did not rule out a separate bid for Variety.
“There is strong interest in the Reed information business,” Reed Elsevier Chief Executive Crispin Davis told reporters at a briefing in London. “We will explore all options for an outright sale and we will see where we come out.”
The divestment, which analysts said could raise more than $2.15 billion, is aimed at reducing Reed’s exposure to the volatile advertising market, the company said.
News of the planned sale comes at an especially awkward time for Variety, which has been preoccupied with coverage of the recently settled screenwriters strike and is now in the throes of covering the run-up to the Oscars.
It also follows by several weeks an announcement that Variety’s president and publisher, Charlie Koones, would step down in March to pursue other unspecified opportunities in the media business.
Variety was founded in 1905 in New York as a weekly publication covering the vaudeville circuit and was launched in 1933 as Daily Variety in Hollywood, where it has grown into the entertainment industry’s leading paper of record.
Variety was operated as a family-owned business until it was sold in 1987 to Cahners Publishing, now Reed Business Information, for a sum reported to be over $50 million.
The magazine currently exists in three printed editions — the California-based flagship publication Daily Variety, its New York cousin, Daily Variety Gotham, started in 1998, and the weekly international paper, titled simply Variety. It also operates a Web site, Variety.com.
By newspaper standards, Daily Variety has a relatively modest circulation of just 30,000, but the magazine is considered compulsory reading for some of the richest and most powerful people in U.S. media and entertainment fields.
The paper’s unique brand of entertainment jargon, known as “slanguage,” has even crept into the wider pop vernacular — words like “sitcom” and “soap opera” originated in the pages of Variety.
Word of Reed’s intention to sell its business publishing unit came as the parent company unveiled its 2007 earnings and a cost-savings target of $477 million by 2011.
Reed also announced plans to acquire U.S. risk-management business ChoicePoint Inc for $4.1 billion, including debt. That deal comes shortly after Reed returned $4 billion to shareholders following the sale of its education publishing assets.
Davis said the credit-related turmoil in global markets means a sale of the business publishing unit could take some time. The company indicated it was in no great hurry to unload the division and was not yet in talks with potential buyers.
“We don’t have any particular buyer in mind,” Davis said, adding, “we are very open-minded on who and when.”