Forbes said it just had its most profitable year since it became Forbes Media in 2006. And now, the company, which is owned by Hong Kong investment firm Integrated Whale Media Investments, is looking to put more money toward making acquisitions and equity investments in startups.
In an interview with Digiday, Forbes Media CEO Mike Federle declined to name a specific revenue figure but said overall revenues were up by more than 18 percent — and profits were up by 42 percent — year over year. “A lot of my job is to make sure we are keeping investors happy, and we’ve done a good job of that,” Federle said.
With more money in the bank, Forbes Media is also eyeing acquisitions in media and tech companies. Last year, the company acquired The Memo, a London-based business magazine. The company also made two investments in companies that appeared in its “Under 30” lists but declined to specify the companies. Going forward, Forbes Media is looking to make one or two early-round investments or acquisitions per year, Federle said. Areas of interest include technology companies focused on artificial intelligence and blockchain, as well as “revenue and profit-positive” media companies, Federle said.
“We are looking for opportunities as they come up because the market is so hot right now in terms of companies who are both looking for a sale or looking for investors,” Federle said. “One of the things we have to our advantage is that we have a bit of a property pipeline with the ‘Under 30’ lists. All year long, our editors are finding these companies, and in more and more cases, we’re getting inbound applications. It provides a nice pipeline for potential deals.”
The business of Forbes Media itself looks a lot different today than it did a decade ago. Over the past 10 years, Forbes Media’s print business has lost $100 million in revenue, which the company has fully replaced with growing digital revenue — in addition to creating new revenue streams with events, licensing and more, Federle said.
In 2014, digital advertising accounted for 38 percent and print advertising accounted for 21 percent of Forbes Media revenue, with print circulation representing 22 percent, events bringing in 10 percent and licensing responsible for 8 percent. Today, the revenue pie has shifted: Digital advertising has risen to 49 percent; “events, insights and reprints” have grown to 23 percent; licensing brings in 10 percent; and print circulation and advertising are responsible for 11 percent and 7 percent, respectively, the company said.
“A lot of people are talking about having a nice, diversified revenue portfolio right now,” said Federle. “When I got here seven years ago, that was my remit: to go diversify, especially into non-advertising revenue. We’re more well-balanced today.”
Live events have become a major source of growth. In 2018, Forbes produced more than 60 events worldwide, including tentpole events such as the Under 30 Summit, which expanded into Europe this year with an Amsterdam event. Other key events include the CMO Summit, which also expanded into Europe, as well as the Women’s Summit. In 2019, Forbes will also be producing an Under 30 Global Women’s Summit. Following the acquisition of The Memo, events in Europe are taking on an even greater priority, the company said.
“Every event we put on, we expect to have about a 40 percent margin on it in year one,” said Federle. “As it matures, that goes up to 60 percent, 70 percent margins. It’s become very profitable for us.”
Forbes also has 40 licensing arrangements around the world including Forbes China, Forbes India and Forbes Russia. Other licenses include the Forbes School of Business, which is an MBA program in partnership with the online Ashford University, and a Learn at Forbes online skills-training platform.
“Our licensing business is almost a pure-profit business, because it’s an annual annuity,” Federle said. “We can budget that year to year knowing that there’s a minimum payment on the license agreement. In some cases, it’s a minimum payment with a cut of revenue, or an equity stake.”
Forbes Media has close to 400 employees today, with plans to add 30 new roles in the coming year. To cap off its strong year, the company said it’s handing out everyone in the newsroom and other non-executives a special end-of-year bonus, which amounts to 4.5 percent of their annual salary.
“If Forbes hits its numbers, everyone should win,” Federle said. “It’s a great position to be in to say we are able to do that.”
An earlier version of this story, which was delivered to Digiday+ subscribers, incorrectly stated the percentage at which Forbes Media grew overall revenue. We regret the error.