The Internet has not been kind to Condé Nast, the publisher of star magazines such as Vogue and Vanity Fair, whose fortunes and influence have waned in the digital age.
But while the web takes, it also occasionally gives.
The Newhouse family, the media dynasty that controls Condé Nast through its holding company Advance Publications, is set to reap a windfall of about $1.4 billion on Thursday when the social networking site Reddit goes public on the New York Stock Exchange. Condé Nast bought Reddit for just $10 million in 2006, later turning it into a standalone company.
With its anarchic culture of amateur commenters, Reddit is a far cry from the meticulously curated guides to the high life in the Condé Nast stable. But its public offering would reward an early and prescient bet on the company by the Newhouses, who own about a third of the outstanding shares.
Advance, which also has large stakes in Charter Communications and Warner Bros. Discovery, among other investments, is privately held and its finances are closely guarded. It’s uncertain whether Condé Nast itself will benefit from Reddit’s stock value. representatives declined to comment. Both Charter and Warner Bros. have seen significant declines in their share price over the past year.
Advance is subject to a six-month lockout period during which it cannot sell its more than 42 million shares on Reddit.
Condé Nast, like many other media organizations, recently announced a round of layoffs, and more cuts are expected after the company resolves a dispute with its union. In January, the company moved Pitchfork, the hipster music magazine, under the GQ umbrella. Chief executive Roger Lynch said this month that revenue in 2023 was flat from a year earlier, partly blaming a tough advertising market.
Reddit launched in 2011, and one of the site’s founders, Alexis Ohanian, later credited the Newhouses with giving Reddit “a ridiculous level of autonomy.”
In a sense, the Newhouses’ potential windfall is in line with a business strategy laid out by the family’s patriarch, Samuel I. Newhouse, a real-life Horatio Alger who rose from poverty to create one of the nation’s richest media dynasties. . Newhouse, who founded the Advance in 1922, was an early specialist in distressed assets, buying distressed newspapers at low prices and turning them into profit-making entities.
Condé Nast itself was a fading grand dame when Newhouse bought the publisher in 1959, sensing opportunity in fashion magazines.
Robert A. Sauerberg Jr., a former Condé Nast chief executive who remains on Reddit’s board, also owns nearly 50,000 shares in the tech company, according to public filings. His stake would potentially be worth $1.6 million below the $34 per share price target.
Katie Robertson contributed to the report.
