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Beltway media finally cashes out

Data: AdImpact; Chart: Thomas Oide/Axios

The media deal frenzy is coming for Washington, giving longtime owners and investors in political publications a way to finally cash out.

Why it matters: The post-Trump era has been a traffic nightmare for political publications, but business is soaring right now, thanks to a few hot-button issues being debated by a new, divided Congress.

  • The pandemic has been an especially lucrative issue for pharmaceutical companies and trade groups.

Driving the news: Axel Springer announced a deal to acquire Politico last week that values the company around $1 billion, per sources familiar with the deal.

  • The deal values Politico at roughly five times its revenue — which is a little less than $200 million across its U.S. and European operations.
  • The Hill, a Beltway-based publication that gets significant national traffic to its digital website, sold to local broadcast giant Nexstar for $130 million earlier this month. The Hill brought in around $40 million in revenue last year, and around $10 million in profit, according to sources familiar with its finances.
  • FiscalNote, a policy market intelligence firm that bought CQ Roll Call in 2018 for $180 million, is looking to go public via a SPAC IPO at a valuation well over $1 billion, according to sources familiar with its plans.
  • Axios, which focuses on topics beyond politics but has a strong foothold in the area, has been in deal talks.

Be smart: Unlike local TV stations, which make most of their ad revenue in even years during elections, political publications tend to make most of their advertising revenue in odd years — following the election of new members to Congress.

  • Washington influencers and opinion leaders aren't audiences that are sought after for election ads, but they are primary targets for issue ads and ads around corporate social responsibility.
  • Political outlets will make the most ad dollars the year after a new president is elected, due to the onslaught of new regulatory issues being debated in the new Administration's first 100 days.
  • If Congress is divided, or if both chambers are majority controlled by a party opposite of the White House, issues tend to be more contentious, and attract more advocacy ad dollars.

Bottom line: The COVID-19 pandemic, combined with a strong ad market recovery and a divided Congress, have been a boon to DC media companies.

  • A push right now to consolidate the digital media industry has made 2021 a perfect year for many of these companies that have long remained independent or privately-owned, to sell.

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