New York Post, May 18, 2021

The billionaire Newhouse family’s significant stake in Discovery Inc. has some media watchers speculating that the magazine empire behind Vogue, the New Yorker and Vanity Fair could soon be folded into the entertainment juggernaut being formed by David Zaslav.

On Monday, Discovery announced plans to merge with AT&T’s entertainment unit, WarnerMedia, in a deal to marry the company behind HGTV with HBO. Zaslav, Discovery’s hard-charging CEO, will run the new entertainment giant.

The Newhouse’s Advance Publications — the diversified parent company of Condé Nast — controls 25 percent of the voting and common stock of publicly traded Discovery, thanks to the family’s past sale of its Bright House cable company.

The new combined company will have a 13-member board, including seven from AT&T and six from Discovery, which will have about 29 percent of the stock in the new company.

That means the Newhouse/Advance slice of the new company could be upwards of 10 percent of the new company potentially valued at over $10 billion — dwarfing the current reputed $1 billion value of Conde.

Advance currently has two members on Discovery’s board.

More importantly, a union between Condé Nast and the new Discovery/WarnerMedia empire could make strategic sense given Condé CEO Roger Lynch’s push to develop more multi-media streams of revenue as print sales and advertising revenues drop. Condé Nast Entertainment, the magazine’s video unit, develops podcast, videos for YouTube as well as movies and scripted shows.

“What Condé Nast needs is scale and distribution,” said Peter Kreisky, an investment advisor with Kreisky Media. “And the new company will have many multi-stream operations. Condé Nast content would fit beautifully and uniquely into that portfolio.”

WarnerMedia’s CNN could also benefit, he said. “CNN could concentrate on their strength — news reporting from around the world — and the new entity could develop the entertainment side now relegated only to Sunday evenings.”

There could be another reason for a sale, according to Thomas Maier, author of 2019 book on the Newhouse Condé Nast empire, “All that Glitters.”

“The original Newhouse, Sam Newhouse, built the company by buying up family run newspapers that other families no longer wanted to own. By the time you get to the fourth generation, you have a lot of family members who don’t work in the company but who still want the money” said Maier. “The Newhouses might be at that stage.”

Added Kreisky: “It would be a victory lap in terms of a smart exit strategy for the family.”

The company’s patriarch is 90-year-old Donald Newhouse. But he’s passed the chairman title to his son Steven Newhouse. Jonathan Newhouse, a first cousin of Donald and the late S.I. Newhouse, Jr., once ran the Condé Nast International empire but has largely retreated from any day-to-day involvement.

Steven Newhouse insists the family has no plans to divest his magazine holdings.

“Condé Nast isn’t going anywhere now or after the deal,” he said. The family voted to support the Warner Media/Discovery merger, he said.

Condé Nast is believed to be bleeding money, however, and reportedly stopped paying the rent on its largely vacant HQ at One World Trade Center earlier this year in an effort to renegotiate a smaller space with its landlord.

“I’m not going to comment on Condé Nast’s financial situation, but they are working very hard,” Newhouse said.

While Advance is still associated with magazine and newspaper media, many of its investments in recent years have been in non-media businesses, including the July 2020 acquisition of the Ironman Group, which in a non-pandemic year runs over 200 sporting events in 50 countries. Advance Publications still owns a sizeable minority stake in Reddit.