UPDATE: Prometheus Global Media is now confirming what I reported last night; that it’s unloading yet another showbiz asset. Instead of calling this a sale, it’s calling this a financial “alliance” with a group of investors led by John Amato who used to be president of a NYC taxi advertising company called Show Media. Amato now becomes CEO of Back Stage. When Prometheus couldn’t sell the media outlet outright, Prometheus joint owner Guggenheim Partners put up most of the money for the investor group to buy it. “They are going to position it as not a sale, but as a strategic partnership. But this is not true: Guggenheim is doing debt financing and holding a carried minority interest, but this new group is assuming control (including control of board),” one of my insiders tells me. Though no financial details were announced, insiders tell me the investor group is putting up $5 million and Guggenheim is financing $10M to $15M more. “Again, they are trying to pretend it’s not a sale for PR reasons, but in any other company it would be regarded as a sale,” the source said. Explained another insider, “They’re dropping assets like flies now.”
EXCLUSIVE SUNDAY 11 PM: The Hollywood Reporter’s parent company is unloading more assets to cut costs. Still, the sale of Back Stage is a surprise because of its unique and longtime positioning in the entertainment marketplace. My insiders tell me that Prometheus Media Group is handing over the actors’ tool to a group of investors, with Prometheus joint owner Guggenheim Partners putting up most of money for them to buy it. “Guggenheim essentially is financing the purchase of Back Stage,” one source explained to me. The official announcement is supposed to come on Tuesday.
Back Stage is a 50-year-old resource for real-time theatre, TV and movie casting and audition information and job listings and acting advice and entertainment news for both the East and West Coasts. It is regularly read by performing arts professionals including working and aspiring actors, singers, dancers, comedians, models, and crew. Since December 2009, it has been owned by Prometheus Global Media, the embattled parent company of titles like The Hollywood Reporter, Billboard, and Adweek (which as of April includes Brandweek and Mediaweek as well). Recently, Deadline wrote that The Hollywood Reporter was laying off and/or firing staff because of financial problems. Soon after, internal sources revealed to Deadline that the Hollywood Creative Directory employees, comprising its publishing director of 17 years Valencia McKinley and her staff of three, were laid off and informed that the outlet had been sold.
There’s no question that Prometheus keeps looking to cut costs, especially with The Hollywood Reporter hemorrhaging the most red ink of all its media properties because of soaring overhead and collapsed subscriptions. Adweek and Billboard also are in trouble. Prometheus, initially entitled e5 Global Media, bought Back Stage as part of an 8-title acquisition from The Nielsen Company. The parent company was formed jointly by private equity partner Pluribus Capital Management co-founder Jimmy Finkelstein and financial services firm Guggenheim Partners’ Todd Boehly who is managing partner in the Office Of The CEO. The pair are now running Prometheus after the CEO they hired, Richard Beckman, was recently sidelined to events planning. As a result, Finkelstein, who is chairman of Prometheus, now oversees daily management.
Look for my upcoming expanded behind-the-scenes biz report about Prometheus and The Hollywood Reporter. [FULL DISCLOSURE: Deadline Hollywood’s parent company PMC is suing The Hollywood Reporter’s parent company Prometheus for copyright infringement.]