They're better at business they can asset-strip and dividend recap out of existence.
Same eventual result but more profitable for the private equity guys and maybe for the limited partners.
From PitchBook's 11 Big Things, November 3:
In retrospect, the only surprise might be that it took this long.
Seven months ago, a middle-market private equity firm based in Boston called Great Hill Partners acquired the remains of the old Gawker empire, a gossipy and fearless media beast that was brought down by a lawsuit secretly funded by Peter Thiel regarding the publication of a Hulk Hogan sex tape. (What a sentence that is to write.) One of the crown jewels of the newly christened G/O Media Group was Deadspin, a pioneering and wildly popular blog that usually fulfilled its promise to deliver "sports news without access, favor, or discretion."
To lead G/O Media, Great Hill brought in Jim Spanfeller, a longtime media pro best known for his stint as chief executive of Forbes.com. The Deadspin staff and their new boss immediately and repeatedly clashed. In August, Deadspin published a scathing investigation into Spanfeller's hiring practices since taking the company over—not the sort of thing you usually see a site write about its own CEO.
It all came to a head this week. Spanfeller and his cronies told Deadspin's writers to stick to sports and fired a longtime editor who refused to do so. The entire Deadspin staff quit in the ensuing days, many of them very publicly, creating a weeklong Twitter firestorm that's still raging. Even Bernie Sanders weighed in. It's not the first instance of private equity's ownership of a media company sparking controversy. But it might be the most confusing one.
Private equity helped kill Deadspin, and that's one of 11 things you need to know from the past week:
Here lies Deadspin, a good sports blog. (undefined/iStock/Getty Images Plus)
1. Down goes DeadspinAlso in this 11 Big Things roundup, and possibly related to our earlier "Private Equity Titans Cashing Out?":
Usually, when a private equity firm takes heat over a media deal, it's because of loading a company up with excessive debt or conducting layoffs or stripping down assets. But by all appearances, Great Hill did none of these things. That's the confusing part: Instead, Deadspin's somewhat self-inflicted downfall seems to be rooted in its owners' complete lack of comprehension of what made the site appealing to readers in the first place.
The latest (and ultimately final) kerfuffle between Deadspin's staff and their corporate overlords began with obnoxious advertising—a fact that should come as no surprise to anyone familiar with the sorts of changes Spanfeller implemented at Forbes. In recent weeks, Deadspin's site began auto-playing noisy video ads for Farmers Insurance within articles. Readers complained, writers revolted, and Deadspin published a post arguing the practice would drive readers away. G/O Media higher-ups intervened and deleted the post shortly thereafter, seemingly violating their collective bargaining agreement with their unionized workforce.
On Monday, G/O Media's editorial director reportedly sent out a memo to Deadspin staff ordering them to stop writing about non-sports topics. It doesn't seem like there was any explicit link to the advertising snafu, but it's not difficult to connect the dots.
At first glance, such a memo might seem quite reasonable; what's wrong with expecting the sports website you purchased to write about sports? But Deadspin was not your average sports website. Founded in 2005 as an offshoot of Gawker by Will Leitch, who's gone on to a successful career in mainstream media punditry, it rose to fame by covering sports in a way that had never been done before, employing a tangent-filled mix of cynicism, absurdism, humor and genuine creative brilliance. It gave its writers the freedom to do what they wanted, and those writers developed a fiercely loyal fanbase that was just as interested in annual takedowns of the Williams Sonoma catalog as they were in coverage of the big game last night.....MORE
4. Earnings season
Apollo Global Management, The Carlyle Group and KKR all revealed their 3Q earnings this week, with the latter two both reporting notable YoY declines in distributable earnings. Apollo, meanwhile, held steady; Leon Black's firm also announced plans to restructure its lucrative and controversial relationship with publicly traded insurance giant Athene Holding. Carlyle made a significant insurance move of its own this week, agreeing to buy The Hilb Group from Abry Partners in a deal prior reports had indicated could be worth more than $1 billion.
