Rumors of a Stitcher sale have been swirling for months despite the denials of executives at parent E.W. Scripps that they were looking to spin-off the audio business from their TV-centric company. But it appears that is what may soon happen. The Wall Street Journal reports SiriusXM is closing in on a deal that would pair up Stitcher with its satellite radio business and Pandora. Neither company has confirmed the deal, but the Journal says a price tag for Stitcher would be around $300 million.
Just last month SiriusXM struck a deal to buy podcast management and analytics platform Simplecast, with plans to pair its content management, audience analytics and audio tools with the monetization platform of Pandora-owned AdsWizz.
In addition to Stitcher’s content portfolio, which includes the Earwolf comedy podcast network, what may attract SiruisXM is Midroll Media, Stitcher’s podcast advertising sales division that could be paired with AdsWizz and Simplecast.
SiriusXM CEO Jim Meyer told an investor conference three weeks ago that the company would make further acquisitions in the ad tech space. “It’s not very glamourous but it’s really necessary if you want to be able to take podcasts and monetize them through advertising,” said Meyer. “We are going to continue to look in that area as to how we scale, particularly our position in advertising technology and also the monetization of advertising in general.”
Meyer also said that he thinks some of the podcast deal-making has been overheated in recent months. “I personally believe some of the stuff that has gone on in the podcast space today is not rational economics,” he said. “But I think you will see us investing more in the podcast area, but rationally, intelligently and disciplined.”
Scripps entered the podcasting business in 2015 when it acquired Midroll Media for $50 million and then followed that up with a $4.5 million deal for Stitcher in 2016. If the reported $300 million price tag is accurate, it would represent a sizeable return on Scripps’ investment in the fast-growing podcasting space.
When asked about spinning-off its remaining audio business in February, Scripps CEO Adam Symson dismissed the idea. “At this moment we’re focused on organically growing those businesses and yielding value within the company,” he said. But Symson also noted Scripps isn’t adverse to selling, like its series of deals worth a combined $83.5 million during 2018 that saw the company exit the broadcast radio business. “The company obviously has a long history of creating and then unleashing shareholder value, often times through transactions,” said Symson. Scripps also owns 60 television stations in 42 markets along with various national TV networks.
The sale of Stitcher to SiriusXM is not believed to include Triton Digital. But the digital audio measurement business would be the last remaining audio segment for Scripps, making it likely that Triton could also be spun-off. Scripps acquired Triton Digital in 2018 for $150 million.
Stitcher revenue grew 13.4% to $17.1 million during the first quarter. Triton Digital’s revenue slid 1.1% to $10.3 million. Executives said that Stitcher had its best month of the year in March, but revenue dropped 19% in April, compared to the prior month, because of the COVID-19 pandemic. “The resonance of podcast advertising in this chaotic time illustrates how deeply ingrained it is in our life today,” said Symson.
Stitcher’s podcasts include Freakonomics Radio, How Did This Get Made?, SuperSoul Sunday from the Oprah Winfrey Network, Office Ladies, Conan O’Brien Needs a Friend, Literally! with Rob Lowe, LeVar Burton Reads, Comedy Bang! Bang and WTF with Marc Maron.
Stitcher had an average 22.3 million downloads per week between May 11 and June 7, according to Triton Digital data. It also said Stitcher’s weekly reach averaged 7.2 million.