America’s internet comedy industry is getting serious.
The iconic satirical news outlet, The Onion, has engaged advisers to explore a possible sale, Bloomberg reported this morning. Earlier this week Bloomberg (kudos to them) also reported that Funny or Die, the website co-founded in 2007 by Will Ferrell, was working with the investment bank Moelis & Co to evaluate strategic options, including a possible sale.
Here is a killer quote from an internal memo Bloomberg obtained that was circulated to staff by Funny or Die’s CEO Dick Glover.
We are NOT trying to sell Funny or Die, but we thought it wise to engage some experts to help us evaluate the situation. In the meantime, if any of you mistakenly receive a briefcase full of cash, please bring it to my office immediately.
So why is now such a great time to try sell or raise funds for a comedy business? Put simply, as Bill Gates said nearly two decades ago, content is king. In a digital age where the rise of mobile devices and social media is causing audience fragmentation, almost every established media and technology company is trying to figure out how to capture eyeballs—and both of these companies do that.
Funny or Die is basically a digital video business distributed through social media, a dream combination for many established players. For example, Disney $2.5 billion valuation in September.
Time Warner was an early backer of Funny or Die and through subsidiaries, holds about a 17% stake in the business, according to the Wall Street Journal (paywall).
The Onion expanded into video production years ago and, like Funny or Die, has a strong presence on YouTube. The satirical outlet began life as a print publication, but ceased print editions last year, to focus on digital publishing. There is currently strong investor appetite for exposure to this dynamic, too. Buzzfeed, the enormously successful viral content company secured financing from one of Silicon Valley’s most respected venture capital funds, Andressen Horowitz, at a valuation of $850 million last US summer.
In fact, one of the Onion’s publications, Clickhole, directly satirizes Buzzfeed. Its owners will probably be hoping that the imitation is not limited to content, but also to finances.