09 February 2022 |

Week of 2/9/2022: Perpetual’s Perspective

By Adam Ryan

FOS is bought by Crain’s

TLDR: Crain Communications bought a 20% stake in Front Office Sports for $5M, a media company covering the business of sports primarily via newsletters and social channels. The deal valued FOS at $25M. As part of the deal, the CEO of Crain Communications will join the board.

Perpetual’s Perspective: Adam White and team built FOS from the ground up. They started as college kids at the University of Miami and built it into what it is today — and for that, they deserve a ton of credit. From the outside, FOS has been growing like a weed. They recently announced a big partnership with DraftKings, they’re spinning up new newsletters, and their staff seems to be growing. Based on everything I’ve been seeing, I bet they’re on pace to do $8M-$11M this year in ad revenue. So, frankly, valuing the company at $25M feels… low. The $5M is also an interesting number. Is it for growth? Secondaries? Lots of questions, but, in the end, it doesn’t matter — Adam appears happy and committed to growing FOS to a $100M+ business. Another win for a newsletters startup.

TikTok is helping news outlets

TLDR: Top publishers like ABC News, CBS News, ESPN, USA Today, and more each have 1M+ followers on TikTok. They’re using the virality of the app to reach Gen Z and drive their core business. Most of these outlets only started their pages within the last 12 months. 

Perpetual’s Perspective: Does anybody just totally feel like this is a little bit of the “2015 Facebook video” era? Which we later learned was… exaggerated. The question is: What will these publications do with it? To compare the 2015 success of Facebook video to now, very few publications truly monetized their socials in a game-changing way. — most of them simply used it as a way to make their media deck seem sexier than it actually was. If companies are investing in TikTok, my question is why? If it’s to get their brand in front of Gen Z, then are you okay with it being a loss leader? I’m bullish on TikTok across all categories, but these explosive numbers on such a viral app carry significantly less weight. I’d argue 1M followers on TikTok equals about 25K newsletter subscribers in terms of value. 

Disney parks at 96% of revenue pre-pandemic

TLDR: On Disney’s earnings call this week, it was announced that the park business had bounced almost all the way back to pre-pandemic levels.

Perpetual’s Perspective: This is a signal to me about the opportunities for events. Events and experiential has always been a key lever of a media business — and the pandemic crushed it. The fact that amusement parks are bouncing back gives hope to all the media companies trying to bring their content back to IRL audiences. Also, can this mean no more webinars. Please.