How the World’s Oldest Weekly Magazine Sold for $131 Million
By: Christiana Sciaudone
The world’s oldest weekly magazine just sold for $131 million, more than 4x its annual revenue. How does a 196-year-old legacy publication reach such a lofty valuation?
It helps that The Spectator is profitable and managed to double its print and digital readership over the last half a decade. Industry experts point to a laser-sharp focus on audience, thrift and international expansion.
Alastair Lewis, chief executive officer at FIPP, a media association, and also a media consultant, told A Media Operator:
Being audience-first, diversifying their revenue streams and looking for global growth opportunities are three really clear strategies that The Spectator has deployed over the recent years, and as a result, has been able to make a tremendous performance.”
“That is testament to a great job that the team that work on The Spectator have been doing in building, not only maintaining and in fact, growing their print circulation and their subscription numbers, but also developing a really smart multi-channel, multi-platform media offering… They’ve developed audio, podcast and YouTube channels that are now reaching millions of people and starting to contribute quite significantly.
Hedge fund manager Paul Marshall bought the magazine this week after a failed sale to a United Arab Emirates-backed U.S. investment firm, RedBird IMI. The auction attracted 22 “potential bidders,” according to Fraser Nelson, the 15-year editor. He appears to be staying on while chairman Andrew Neil will not, publishing in a resignation note on X that:
The Spectator has never been more profitable, its reach never wider, at home and abroad (helped by our splendid Australian and American editions), and its journalism (under the peerless Fraser Nelson) never better nor more influential than it has been in its almost 200-year history.
Above all, core to The Spectator’s very raison d’être, is the independence of The Editor. I regarded it as my prime responsibility for 20 years to ensure that, protecting The Editor not just from outside pressures, commercial or political, but even from proprietors.
I cannot tell if the new owners will have the same reverence for editorial independence.
Marshall backs GB News, a right-wing broadcast network, raising questions about editorial independence. But first: how did a centuries-old weekly magazine sell at such a premium when so many media companies are flailing? Let’s break it down.
Audience First
According to an article by Nelson:
This deal is vindication of The Spectator’s unusual business model. In this trade, there is always pressure to go for the digital ‘quick wins’ (clickbait articles, advertorials, etc.) but we rejected this as a false economy.
The digital temptations that can lure publications to their grave (‘The world has changed! Look at the clicks! Drop the opera review!’) are dangerous as they come dripping in what looks like supportive data. You can end up not just being edited by algorithm but stripping a publication of nuance, variety and soul. Our belief was that if we innovated, and used the proceeds to double or treble down on what makes The Spectator different, we would maximize the value of the company as well as serve our readers.
Readers still want quality journalism. They also want big names, and celebrities and politicians fawn over themselves to write for The Spectator. It’s all behind a paywall, something the publication has been a big proponent of.
“I don’t think anybody can argue that The Spectator’s had strong journalism, it’s not some clickbait factory,” said James Hewes, CEO of The Public Relations and Communications Association (PRCA), and former CEO of FIPP.
It’s also very tied to the UK’s Conservative Party, which is currently undergoing a shift with a more right-wing faction known as the Reform Party gaining traction. Several UK prime ministers, including Boris Johnson, have edited the magazine, and its annual party is a who’s who of the Conservative Party.
“It’s one of the most important political parties of the year, and Paul Marshall now owns that,” said Jim Edwards, executive editor for news at Fortune and a former editorial strategy consultant. Conservative party ties can mean conflicts of interest, but The Spectator presents different points of view. The publication prides itself on saying the unsayable, sometimes resulting in accusations of sexism and racism, but in the UK, people support those brands that reflect their political tastes.
“There’s just a thing in Britain that, if you are political in any way, you pay and subscribe to the media brand that you like,” Edwards said. Another term for it could be confirmation bias.
In addition to politics, The Spectator is known for its solid and distinctive coverage of arts and culture. As Lewis explained:
If you really focus first and foremost on knowing your audiences and knowing how you can reach those audiences and with which products and on which platforms, then you can still grow a successful media business from a very much a legacy print brand. You have to work hard to really understand the types of content, the types of platforms that your users are going to want to engage with and The Spectator have done that really, really well.
Thrift
The Spectator has “barely three dozen journalists” with a circulation of 130,000 print and digital users, twice what it was in 2018. It has a total staff of 86.
“They have kept their core content teams quite slim and focused on commissioning and editing more than having large newsrooms, so the staff on The Spectator is considerably smaller than that from many other comparable newsrooms in terms of the audience and the revenues,” Lewis said. “That’s enabled them to be kind of laser focused on the content that they know is going to deliver for their audiences.”
The reality is that it’s a very hard-working operation acutely aware that its business is never one to have made much money, said Colin Morrison, the founder and editor of Flashes & Flames.
The magazine has also developed highly successful podcasts and newsletters focusing on high-interest and special niches like their Ukraine podcast and the Lunchtime Espresso newsletter. Their YouTube channel is a hit with 384,000 subscribers, which generates substantial revenue, Lewis said.
It’s also expanded into international markets. The Spectator launched its Australia version in 2008, and 10 years later it opened shop in the U.S. More than a quarter of the subscribers come from abroad. It’s far from alone. UK media brands including The Guardian, The Independent and The Daily Mail all have New York newsrooms.
All of this to say, it has found a way to generate growing revenue with costs remaining manageable.
Editorial independence and growth
The editorial independence of The Spectator, highlighted by former chair Neil, has been crucial to its success. Given that members of parliament like Nigel Farage have worked as presenters on Marshall’s GB News, the future freedom of The Spectator has come into question.
“The new buyer needs to be wary that they don’t destroy value by undermining that editorial independence,” Hewes said. “The buyer owns GB News, you know, this could be a way to further consolidate the share of voice he has with that conservative audience in the UK is obviously worth a lot more than the pure financials would suggest.”
In fact, when Hewes first saw the price tag, he thought the deal was to buy both The Spectator and The Telegraph, which is also for sale. The political influence “may also have played a role in the price that was paid.”
Most estimates for the sale of The Spectator put it at between 20 million and 50 million pounds, but in June, Morrison called it. He said at the time that The Spectator warranted a “trophy premium.” “It never surprised me that there were people like Paul Marshall in the race for The Spectator, because it’s a relatively small chip for those people,” Morrison said this week.
But there is growth potential. The magazine is largely seen as being underinvested and with even a relatively small infusion, Morrison said, “this could actually be much bigger.” That includes investing in those international markets, a huge opportunity, Lewis said.
In a statement, Marshall’s Old Queen Street Media said it will prioritize investing in journalism, talent and technology, “with the aim of building a strong future for The Spectator and supporting it to reach new audiences. A particular focus will be given to expanding the magazine’s reach in the Anglosphere and in North America, as well as using OQS Media’s digital expertise to enhance the experience of Spectator readers by innovating across technology, video and audio.”
Marshall, Old Queen Street Media and Nelson didn’t respond to requests for comment.
In the same statement, Freddie Sayers, chief executive officer of OQS Media, said:
“Our ownership will not only add energy, global ambition, and digital innovation, it will invest in journalism and be committed to the highest standards, with a dedication to the core principles which underpin a free press: accurate presentation of news and free expression of opinion.”
