Goldman Sachs Group, the ultra-secretive Wall Street firm that usually tries to avoid the media, is now trying to break into it.
Goldman is quietly trolling for deals in the publishing industry and is talking to big-name magazine executives about heading a potential investment venture.
According to one source, Goldman is eyeing the publishing industry – among others – for investment opportunities, and may be earmarking capital from within its existing private equity funds to go after magazine groups.
Goldman Sachs, under Chairman Henry Paulson, has plenty of money to plow into a publishing venture. It still has more than half of the $5 billion in capital it raised two years ago for its private equity fund, Goldman Sachs Partners 2000.
A Goldman spokeswoman declined to comment on the matter.
Goldman’s move, should it happen, would underscore the firm’s perceived belief that there are significant investment opportunities for consolidation in the magazine industry, which has been struggling with declining advertising revenues caused by the recession.
“Cash flows are way down, so [investing in magazines] would be a smart bet on an upturn in advertising,” noted one media investment banker.
According to trade publication Advertising Age, Goldman has told some magazine execs it wants to go after the specialty consumer and business-to-business titles.
One publisher mentioned as a possible top target: Primedia. Hearst Magazine President Cathleen Black, Conde Nast Publications President and CEO of Steve Florio; and Don Logan, chairman and CEO of AOL Time Warner’s Time Inc., are among said to be on Goldman’s CEO “wish list,” Advertising Age said, adding that it’s unclear whether all the executives had been contacted about the venture.
However, one magazine executive, American Media Chairman and CEO David Pecker, was quoted as saying he met with Goldman’s recruiter handling the search, for “lunch and discussions, and it didn’t go any farther.”