The internet has not been kind to Condé Nast, the publisher of starry magazines like Vogue and Vanity Fair, whose fortunes and influence have waned in the digital age. However, a surprising turn of events is set to bring a windfall of roughly $1.4 billion to the Newhouse family, the media dynasty that controls Condé Nast.
The windfall comes as the social site Reddit, which Condé Nast acquired for a mere $10 million in 2006, is set to be listed on the New York Stock Exchange. The Newhouse family, who own roughly one-third of the outstanding shares, are poised to benefit significantly from the public offering.
While Reddit’s anarchic culture of amateur commenters may be a far cry from the meticulously curated guides to haute living in the Condé Nast stable, the early and prescient bet on the company by the Newhouses is proving to be a lucrative one.
Advance Publications, the holding company that controls Condé Nast, also has major stakes in Charter Communications and Warner Bros. Discovery, among other investments. The financial details of Advance are closely guarded, and it is uncertain whether Condé Nast itself will benefit from the value of the Reddit stock.
Despite the potential windfall from Reddit, Condé Nast, like many other media organizations, has recently announced layoffs and is expected to make more cuts in the future. The company’s chief executive, Roger Lynch, cited a tough advertising market as a factor in stagnant revenue for 2023.
The Newhouse family’s success with Reddit is in line with their business strategy, set by patriarch Samuel I. Newhouse, who founded Advance in 1922. Newhouse was known for buying struggling newspapers at discounted prices and turning them into profitable ventures. When he bought Condé Nast in 1959, the publisher was a fading grande dame, but Newhouse saw opportunity in fashion magazines.
Robert A. Sauerberg Jr., a former Condé Nast chief executive who remains on the board of Reddit, also stands to benefit from the public offering, owning nearly 50,000 shares in the tech company. His stake could potentially be worth $1.6 million under the price target of $34 a share.
The story of Condé Nast’s unexpected windfall from Reddit serves as a reminder of the ever-changing landscape of the media industry and the importance of adapting to new digital trends.
