2021 has already been a busy year for media deals, with the WarnerMedia-Discovery tieup, Amazon's purchase of the MGM movie studio, and German conglomerate Axel Springer's deal to buy American political media player Politico for $1 billion, a valuation that - as we noted at the time - seems wildly exaggerated, representing just a few of the more recent deals announced so far this year.
On Monday, another announcement caused a stir across the American digital and television media landscape as media giant Fox reportedly agreed to buy TMZ from AT&T for reportedly less than $50MM.
With so many crazy valuations in the world these days less than $50m seems low for TMZ.— sandy cannold (@SandyCannold) September 13, 2021
Fox already has deep ties to TMZ, which owns a popular website and produces several TV shows. Fox local-television stations carry the TMZ shows "TMZ" and "TMZ Live." And TMZ has produced specials for Fox's entertainment unit, including "Harry & Meghan: The Royals in Crisis" and "UFOs: The Pentagon Proof," as well as a sports gossip show that is carried by the Fox Sports 1 cable network. TMZ co-founder and managing editor Harvey Levin has also produced shows for Fox News.
Levin, who launched TMZ in 2005 and serves as host of its TV shows, will remain in charge of operations. In a statement, Levin said the Fox deal will create new opportunities to grow TMZ. "We couldn’t be more charged," he told WSJ.
Lachlan Murdoch, executive chairman and chief executive of Fox and anointed successor to the empire of his father, Rupert Murdoch, had this to say: "The unique and powerful brand Harvey has created in TMZ has forever changed the entertainment industry and we’re excited to welcome them to Fox," said Corporation.
As for why WarnerMedia decided to dump TMZ before merging with Discovery, WSJ explains that TMZ's reporting on celebrities often created problems in other arms of the AT&T umbrella (the company also owns CNN, HBO and the Warner Brothers movie studio). At Fox, which focuses on news and sports, there would be fewer obvious conflicts. Fox also recently sold its entire entertainment division to Disney in a deal that left the company slimmed down and focused on its "core" news and sports offerings. With TMZ, they can expand into gossip and entertainment news, known to still be profitable in the contemporary cutthroat media environment.
Earlier this year, AT&T struck a deal with Discovery to spin off its WarnerMedia assets and combine them into a new standalone company called Warner Brothers Discovery.
Despite its reputation as a gossip-monger, TMZ has scored some major scoops over the years, from exposing Mel Gibson's antisemitic rant to being the first outlet to report the death of Kobe Bryant and his daughter Gianna.