When advertising demand began to dwindle in 2022, the cost of running these properties came under greater scrutiny, both in real dollars and opportunity cost, according to Ameet Shah, a partner and senior vice president of publisher operations and strategy at Prohaska Consulting. 

To compensate, media companies began whittling down parts of their portfolio to find savings, a trend that will likely accelerate as the economy continues to normalize.

“Many publishers are facing declining revenues and missing targets, and many have had to resort to layoffs to have the business survive,” Shah said. “Not every transaction lives up to the expectations for a variety of reasons, which forces these hard strategic questions.”

More adjustments are on the way

The timing of these portfolio adjustments comes as the advertising downturn continues to press media companies to find cost savings. Although first-quarter revenues across the industry avoided freefall, publishers have now endured nearly a year of depressed advertising interest.

While some analysts predict ad spending will rebound in the second half of the year, media companies that tapped into their cash balances to stay afloat could be nearing the end of their runway, prompting infusions like the one Vox Media received from PMC in February. 

Further, merging companies takes time, and many of the acquisitions made during the pandemic are only now coming into focus. At Dotdash Meredith, for instance, the process of combining the two portfolios remains unfinished, a timeline that likely applies elsewhere.

This means that media companies that went on shopping sprees during the pandemic, such as Outside Media, Trusted Media Brands or The Arena Group, could be looking to trim down in the coming months. 

Others, like Dotdash Meredith, have talked openly of finding a better home for certain properties, such as People, which is a traffic firehose but one whose business model runs counter to the Dotdash Meredith blueprint. Similarly, Vice Media has explored the notion of spinning off parts of its business to generate cash.

“Decisions that were smart two years ago might look different now,” Morrissey said. “It’s a different world, and people are going back to basics.”