The flurry of podcast dealmaking during the past several years died down in 2023, but recent sales of Neon Hum and The Roost has some wondering whether a new wave of mergers and acquisitions could be cueing up. “I think it's certainly happening,” Audioboom CEO Stuart Last told investors Monday. “I know of at least six podcast companies that are up for sale right now,” he said, without revealing names, during the quarterly presentation.
Two weeks ago, Sony Music said it would buy the podcast production company Neon Hum from founder and CEO Jonathan Hirsch. Sony had already been working with the London-based studio and it said the move will allow it to streamline the company’s U.S. creative division and broaden its work for hire services.
Separately, Night, the talent management company that represents many of the biggest YouTube and Twitch stars, announced it would buy The Roost Podcast Network from Warner Bros. Discovery which announced it was closing down the companion young adult video-focused Rooster Teeth that spawned the podcast company in 2020.
Last says what is different in dealmaking today is the sales motivation.
“It’s been driven by the sell side,” he said. “These are companies that have suffered due to recent economic conditions.” Last also said that the potential buyers have changed from the past few years when companies like Spotify spent hundreds of millions of dollars to grow its podcast business. “At this point, I'm not really seeing any major buyers, like huge players, actively looking to buy podcast businesses,” he said.
But Last predicted that could change in coming months as the advertising market solidifies further and podcast companies again post the kind of growth numbers they saw prior to last year. “The M&A window from the buy side will reopen later this year,” he said.
As a publicly traded company, Audioboom has the option of making a deal with stock as well as cash. It trades on the London Stock Exchange, where investors have given Audioboom a market cap of roughly $41 million. That’s frustratingly low number for Last, who says it has hurt their ability to raise capital.
“We think we are grossly undervalued,” he said. “I think actually, right now, relative to our performance, we are more undervalued than ever before, which is very, very frustrating. There is no direct correlation between the valuation and the business and the work that we're doing.
“I'm not sure how much longer we can wait and hope that our valuation picks up or tracks performance has been like this for years.”
Audioboom previously has explored relocating to a U.S. stock exchange, and while Last said they don’t plan any immediate move, he said they have already done the behind-the-scenes work to understand what that would entail. “I'm not sure how much longer we can wait and hope that our valuation picks up,” he said.