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The Forbes family has agreed to sell a large minority stake in its media empire to Elevation, the buy-out fund of rock star Bono, in a deal worth about $300m. The move highlights how private investors are seeking bargains in the struggling business of print journalism.
The deal represents a big bet by Steve Forbes, the most prominent member of the family, that outside capital and know-how will help speed the 89-year-old magazine’s transition into the digital age.
It highlights Elevation’s conviction that old media companies with strong brands should be able to recreate themselves and thrive on the web.
“We see enormous opportunities for growth on the web side,” Mr Forbes said. Some of the new capital will be used to develop new local language print and online publications in markets such as eastern Europe, China and India. “There is a growing entrepreneurial community there and we believe who gets there first will do best.”
Forbes, like other business titles, saw its circulation and advertising pages sink following the collapse of the technology bubble in 2001. This, along with the growth of its web business, led to speculation that the family might consider shutting down its print operations – which Mr Forbes strongly denies.
“One of the things we like about Elevation is that they realised that print is the core [of the business],” Mr Forbes said.
The Forbes family chose the sale of a minority stake over other solutions, such as the sale of the entire group. Although Bono, the U2 rock star, is a partner in Elevation, the main buy-out executive in the negotiations was Roger McNamee, formerly of Silver Lake Partners.
The exact terms of the deal were not disclosed on Monday but people close to the talks said Elevation would receive a 40 per cent stake in Forbes for a price between $250m and $300m. There is no mechanism for Elevation to wrench control of the media empire from the Forbes family, these people insisted.
As for Bono’s involvement, Mr Forbes said his experience in the music industry gave him a greater understanding of how digital technology was rapidly changing media. When asked if Bono, a campaigner for social justice, was a reader of Forbes, which relishes its reputation as a capitalist bible, Mr Forbes replied: “I’m told he was – and he certainly will be now.”