Sale of Media Assets
The news of the company selling its Verizon Media Group, which includes Yahoo and AOL, was first reported last week. Sources familiar with the potential sale stated the business is in talks for a deal that is worth $4 billion to $5 billion with private-equity firm Apollo Global Management Inc.
Startup Savant reported in early March that Apollo Global Management acquired Michaels, an arts and crafts retailer. The private-equity firm also acquired The Venetian Resort in Las Vegas earlier this year.
The potential sale of Verizon Media Group, previously known as Oath, comes after reports stated that the telecommunications business invested $9 billion into both acquisitions of AOL and Yahoo in 2015 and 2017. At one time, Yahoo and AOL were early pioneers of the internet.
However, Google and Facebook have become giant competitors to Verizon. As a result, the value of the media group created by Verizon plummeted. With an initial target of $10 billion in revenue when the unit first launched in 2017, Verizon valued its media group at $4.6 billion in 2018.
Furthermore, the telecommunications company has cut jobs in the unit, resulting last year in the sale of Huffpost, a former Verizon Media Group asset, to BuzzFeed for an undisclosed amount. Additionally, in 2019, the business sold Tumblr, another former asset, to Automattic Inc. also for an undisclosed amount. Automattic Inc. owns and operates WordPress.
In 2020, Verizon Media Group reportedly generated $7 billion in revenue and $1.9 billion in Q1 of 2021, a 10.4% increase over the last year.
Despite this slight bump for the unit, Verizon announced in early March that it committed $53 billion to secure Federal Communications Commission (FCC) spectrum licenses to support its 5G network. Startup Savant reported in early April that the company won its first 5G contract in Europe. Moreover, $10 billion will be used over the next few years to upgrade its systems.
In addition, the company has shifted its focus to build partnerships with Disney+ and Hulu that can be bundled with wireless and home internet plans.
Several news outlets indicated the deal between the telecommunications business and Apollo Global Management could be announced as early as today. Additionally, Verizon will keep a stake in the media group. Neither company has commented on the matter.
Nasdaq reported in February of this year that the telecommunications business has more than $170 billion in debt, with the potential to increase that amount this year.
Other Telecommunications News
Verizon is not the only telecommunications company to recently abandon once-promising investments. In February, Startup Savant reported AT&T, the world’s largest telecommunications and mobile service provider, would be selling its minority stake in DirecTV after it purchased the satellite TV company for $49 billion six years ago.
On the flip side, T-Mobile recently finished its merger with Sprint in April 2021 — a deal valued at $26.5 billion.
About the Author
McKenzie Carpenter is a graduate of Central Michigan University with a B.A.A. in Integrative Public Relations and French. McKenzie has previously worked for small businesses and nonprofit organizations.