Cox Enterprises recently acquired Axios Media for $525 million. The media and advertising company captured a minority stake in Axios in November 2021. However, according to The New York Times, the price of the new $525 million deal is about five times the revenue Axios was targeting in 2022.
The news and digital media company was co-founded by Jim VandeHei, Mike Allen, and Roy Schwartz in 2017. The media company quickly became one of the most successful companies due to its strategy in showcasing news and other stories. The company aimed to feature newsletter-style scoops on business, technology and politics.
Everything we know about Cox Enterprises’ acquisition of Axios Media
Since the media company agreed to sell itself to Cox Enterprises, the deal is expected to close this month. Additionally, the brand new $525 million deal has been timed to ensure that the company’s original founders, namely Mike Allen, Jim VandeHei and Roy Schwartz, receive financial incentives from the company. According to the New York Times, each of the co-founders will remain a minor shareholder and participate in major business decisions and regular newsroom discussions.
In addition to the three original co-founders, the board will be joined by Cox Enterprises CEO Alex Taylor. While the digital news company has been profitable for the past three years, it didn’t expect to make much profit in 2022, due to investments in its communications software division, HQ. This arm of the company will operate as a separate standalone business headed by co-founder Roy Schwartz.
The new deal is expected to ensure good investment in local news coverage, as many commercial investors would have stopped paying attention to local markets.
According to Cox Enterprises President Alex Taylor, the focus would be on “how many local markets” they were addressing. He added:
“A big part of that investment is expanding the number of local markets we serve. Local watchdog journalism is so important to the health of any community, and no one is more focused on building it on a national scale than ‘Axios.’
The deal also includes an additional $25 million in the company’s media department to further expand into new local, national and subscription products.
While the media’s local branch is already operating in 24 cities across the United States of America, Cox is reportedly aiming to expand it to 30 cities by the end of 2022.
The rise of Axios in journalism
Previously, the media company was able to grow its business in no time thanks to its smart decision to hire subject matter experts who streamlined some of the stories to make them user-friendly and audience-oriented.
He also gained wide recognition due to his political news coverage, which included on-camera interviews with then-President Donald Trump and other White House officers. The business journalism segment has seen immense growth thanks to in-depth newsletters from renowned journalists, including Dan Primack and Sara Fischer.
The TV partnership with MSNBC has also helped raise awareness of the media company around the world. Another striking deal to launch a TV show in the company’s name also helped the company gain exposure.
Axios HQ has also helped the business grow as it has become essential in facilitating communication between internal and external departments of the business.
At present, the media company has more than 500 employees, of which 100 work at the headquarters and 75 for the local part. The company was able to raise $55 million through mid-2022. However, the new takeover could mean an increase in their revenue due to the expansion of Axios’ headquarters.