(From the Future of Business Media Conference) The following are rough notes, not quotes, from a panel of the following: Jim Casella, Scott Peters, Seth Rosenfeld, Michael Wollf – Moderator: Rafat Ali
Wolff: If you have cash, sh*t, this is going to be a great time for you. The deals are going to wait until all of the inflation comes out of them. This is going to be a bad time for Sumner Redstone.
Wolff: Companies (like Reed) that want to sell things are going to have to finance the purchase. That’s going to be the reality for a long time.
Rafat: How are you “dressing up” the companies you are marketing?
Peters: Market leaders with good fundamentals will do fine. The “B” and “C” players will not go to market. There will be a pent up demand for sellers (that will make for an interesting dynamic with the credit markets come back).
Wolff: If you have cash, you have options — you don’t have to buy other companies, or you can buy your own debt.
Rafat: What are the areas in business media where there are greater opportunities?
Peters: There’s a big shift, ad driven businesses — people run for the hills. So you end up seeing a pendulum swing to data-driven information businesses with subscription models. There’s a flight to “must-have” information spin.
Wolff: There’s still a necessary conversion to new media. If you want to have a future and your old media company, you have to buy new media companies. You can’t do it, you’ve got to buy them. Pricing has to be more realistic, (but they are still going to be acquisition targets). If you’re a going concern in the old media business you’ve got to purchase new media.
Rosenfeld: Some regulated sectors, like healthcare and finance areas, those are going to be areas where the need for information is going to grow — they are going to thrive.
Rafat: How does the News Corp / DJ deal now seem, a year later?
Wolff: As the News Corp share has sunk, lots of second-guessing — “If Rupert had only waited.” On the other hand, the company had lots of cash and the ceo is 77 and he wanted it more than anything. From the DJ side, it’s great. If they were a stand-alone company now, they would be in bad shape. But they are in a strong position. They are certainly in the strongest shape of any newspaper company in the business.
Rafat: Does Murdoch realize the “enterprise” side of the business (Factiva, etc.) is throwing off so much cash?
Wolff: Murdoch didn’t even seem to know there was an enterprise part of the business until I explained it to him. It was not relevant to what he wanted — he wanted the newspaper.
Rafat: On the event side of the business, what are you seeing on the deal side?
Peters: Not many “pure play” deals in the “face-to-face” business. It is one area that can’t be replaced by the Internet. The big events are doing okay. The smaller, trendier events are doing worse — both in their business and on the “deal side.”
Peters: (In an answer about cross-border deals) There will be a halt in much of those as companies hunker Recall that during the dot.com bust, there were lots of implosions of businesses, but not a bust in innovation. An incredible amount of value was created.
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