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You might not be alone if, flush with cash during the doldrums of the pandemic, you spent too much money on something you never actually needed—in the last month, several media companies have felt the same way.
On Wednesday, Vox Media announced it would spin off the social video publisher NowThis, which it acquired in December 2021 after buying Group Nine Media in an all-stock deal.
The news follows a similar announcement from Recurrent Ventures, which on Monday sold its food and beverage property Saveur back to its longtime editor after acquiring the title in 2020. And last month, G/O Media sold its property Lifehacker to Ziff Davis, a shuffling of its portfolio prompted by its purchase of Quartz early last year.
Taken together, the spin-offs reflect a sober reassessment of purchases made during the frothy days of the pandemic, before interest rates rose and digital readership dwindled.
As economic conditions have worsened over the past year, media companies have shifted their priorities from growth to cost-savings, a transition that has cast the value of these purchases under greater scrutiny, according to media analyst Brian Morrissey, the author of the newsletter The Rebooting.
With an eye toward efficiencies, some have decided to cut loose certain titles that, while profitable, might fit unevenly into a larger portfolio or divert attention from more critical ventures.
“When you have fewer resources, you put them toward what is working,” Morrissey said. “Right now, people are taking a hard look at their portfolios—it’s no different than the tech platforms pulling back from their non-core initiatives.”
The pandemic buyers market has given way to belt-tightening
Mergers and acquisitions reached a fever pitch during the early years of the pandemic, according to data from KPMG Advisory.
In the media and telecommunications sector, overall deal volume jumped 48% in 2021, and overall deal value rocketed 83%, to $941 billion.
Publishers also enjoyed windfall advertising revenues in the latter half of 2020 and throughout 2021 as consumers spent record amounts of time browsing media properties.
To take advantage of the moment, deep-pocketed media companies began snatching up distressed properties.
