Guggenheim Partners is spinning off significant media assets — including The Hollywood Reporter, Billboard Magazine and Dick Clark Productions — into a new company that will be under the majority control of Guggenheim president Todd Boehly, a source familiar with the deal confirmed Thursday.
The shakeup by the giant investment fund means that the businesses, many with deep financial challenges, will fall to an investment group led by an executive best known in Los Angeles as a co-owner of the Los Angeles Dodgers. Boehly made news last month when he said in an interview with the Los Angeles Times that he would like to create a more “long-term and sustainable” salary structure for the Dodgers, who recently have led Major League Baseball in player pay, but not playoff success.
The Boehly group’s acquisition of the various media properties is not expected to close until next year and the investor declined, through a spokesman, to comment. A new holding company being created by Boehly will oversee properties as diverse as the Reporter, a trade publication for the entertainment business; Billboard, a major outlet covering the recording industry; Adweek, focusing on the advertising business and various online sites including Mediabistro and TV Newser. Boehly’s new company also will take control of Dick Clark Prods., producer of the Golden Globes and other awards shows, the source said.
Terms of the deal with Guggenheim, which was first reported by the Wrap, were not immediately known. It is believed that Boehly would give up his executive post at Guggenheim once the deal is complete. A source close to the transaction called it “amicable” and said it will have no impact on Boehly’s ownership position with the Dodgers. (The Major League Baseball team is held through an entity called Guggenheim Baseball Management. Boehly intends to maintain his 20% stake in that company.)
Guggenheim confirmed last March that Boehly was exploring the possibility of forming his own company, adding that the new operation was expected to be “harmonious” with Guggenheim’s interests.
Sources close to the situation said the spinoffs have essentially been complete for some time, and that it indicates Guggenheim’s frustration with the lack of meaningful returns from the Boehly-led media investments. Dick Clark Prods. handles a big roster of roster of awards shows and events but does not have the kind of program library that yields steady returns from content licensing. Yet the operation, which Guggenheim acquired in 2012 for about $375 million, remains profitable thanks to its live events business.
Sources describe Boehly as a sharp financial engineer who has become infatuated with the entertainment industry and the access afforded by the Hollywood Reporter and Dick Clark Prods. Sources noted that Dick Clark’s CEO Allen Shapiro is likely to be a key player in the spinoff, given his experience in running entertainment firms. Shapiro is also an investor with Boehly in Dick Clark Prods. Boehly will be leaving Guggenheim with “substantial”
capital resources to drive the spinoff businesses, according to one source.
Guggenheim Capital, the parent of Guggenheim Partners, had earlier helped launch another new investment firm, Cain Hoy. The Greenwich, Connecticut-based startup had a minority investment from Guggenheim and listed its co-founders as Boehly and two former Guggenheim executives — Henry Silverman and Jonathan Goldstein. Cain Hoy will not be involved in the new media acquisitions, two sources said.