Guggenheim Partners today announced the hiring of a badly needed digital media CEO, presumably to put some fiscal diet discipline over its assets including The Hollywood Reporter‘s bloat. In the process it has removed the last remaining Prometheus Media equity owner managing THR after its 2010 purchase. Gone with the wind is Jimmy Finkelstein, who tried unsuccessfully to turn the publication into a profitable venture. Guggenheim announced that it has acquired the remaining stake in Prometheus Media from Pluribus Capital, which was founded by Finkelstein, who previously served as Chairman of Prometheus Media. So here’s what happened: it’s been well known that the disliked Finkelstein clashed often with Guggenheim, which for the past year installed its own bean-counters to monitor the celebrity sheet. And inexplicably in July Guggenheim placed Dottie Mattison in charge, even though she is known for loving the Red Carpet limelight more than overseeing the journalism of the job. Finkelstein had a reputation around the Reporter as a nasty piece of work, so there will be lots of dry eyes to see him go. He never understood that, to make the publication profitable, costs had to be slashed and not constantly soared, to Guggenheim’s horror. The fault lies with Guggenheim’s Todd Boehly, whose lousy idea it was to buy into Hollywood — and now can’t wait to get out so he can continue investing in sports. (His newly acquired Dick Clark Prods just effed-up Sunday’s Golden Globes production-wise.)
One of the problems was that Finkelstein, who owned legal trades years ago, overestimated his own ability to turn a profit in today’s crowded consumer media marketplace. Although it’s true that The Hollywood Reporter has enlarged its one-off traffic, it still is not widely consumed by the entertainment community. Instead Hollywood and the businesses that rely on it are addicted to lean and mean Deadline Hollywood, which focuses exclusively on showbiz instead of celebrity. THR‘s plan under original Prometheus Media CEO Richard Beckman was to publish a subscription-based magazine. That quickly fizzled, and the Reporter print edition is distributed free for the most part (and to zip codes like Florida). Beckman, who was hired in 2010, was demoted in 2011 and then kicked to the curb in June. Finkelstein would have met the same fate earlier except he was an equity owner in Prometheus Media and convinced naive Guggenheim to let him try to affect a turnaround. Now his removal paves the way for Guggenheim to finally sell the Hollywood trade, something the investor has wanted to do almost from the beginning of its asset acquisition which was always plotted as a fixer-upper to be flipped.
Meanwhile, Penkse Media Corp (owner of Deadline Hollywood) is still waging its lawsuit against The Hollywood Reporter for copyright infringement.
Here’s Guggenheim’s release today: (more…)