When Guardian News & Media acquired ContentNext Media, owner of tech and media blog PaidContent and other blogs in July 2008, various reports claimed the price as north of $30 million, including earn-out and dependent on future performance of the young media company started by journalist and Internet entrepreneur Rafat Ali.
This morning, industry trade outlet PressGazette revealed that the price that was actually paid for ContentNext Media was £4 million, which would today convert to roughly $6.5 million. Accounts filed with Companies House by the Guardian Media Group subsidiary earlier this week revealed the previously undisclosed terms of the deal.
So where did that £15 million (then $30 million) figure come from?
According to PressGazette, that sum was dependent on the highest possible future performance figures for the media venture. Guardian Media Group told PressGazette that it still considers ContentNext Media a “good strategic fit to the business” but that the “carrying value” was “impaired following difficult trading conditions”.
Since we all know the global economy started falling apart shortly after the acquisition deal was signed, it’s isn’t much of a surprise to find out that those ‘highest possible future performance figures’ were not achieved. I’ve reached out to some of the people on the ContentNext team to get their side of the story and will update accordingly.
Update: Ali declined to comment, but Henry Blodget over at The Business Insider cites a source saying that there was a $6 million temporary cash escrow/hold-back, separate from the $6.5 million initial payment, that would bring ContentNext’s price to $12.5 million.
ContentNext was founded in 2002 by Rafat Ali and funded by Greycroft Partners in 2006.
They are one of the new media companies we respect most, and we’re glad to see they’re still alive and kicking and keeping us on our toes 24/7.