Coin Adds Up for Media Firm—ITN Nets Cash from Sony, Investors
September, 6 2006
Daily Variety, 09.06.06
ITN Networks, a media agency that bundles local TV ad spots across the country, got a major influx of cash from two prominent media investors and Sony Pictures Television.
Sony, Zelnick Media and Veronis Suhler Stevenson invested $250 million in hopes of helping the stand-alone agency become a dominant player in packaging video for advertisers, be it on TV, the Internet, phones or other devices.
The cash will be used to fund acquisitions and develop services for advertisers looking to buy video on all platforms simultaneously.
"We think it's a great play into the future of ad-supported media," Zelnick Media partner Scott Siegler said. "If you believe in ad-supported video on as many platforms as there are, this is an excellent way to leverage that."
ITN Network's management, including CEO Tim Connors and president/chief operating officer Todd Watson, will stay in place, but Zelnick Media CEO Strauss Zelnick will join the board as non-executive chairman.
ITN has built its ad business over 23 years by taking options on unsold local TV ad time and then selling packages in the network upfronts to major advertisers.
It has proprietary software that allows advertisers to buy certain demographics, and it creates customized networks targeting, for instance, single working mothers or diet and exercise enthusiasts.
ITN, which had $300 million in ad bookings in 2005, has been a major acquisition target for the last several years. The investors take a majority stake for $200 million, which will be paid immediately, with an additional $50 million paid over time.
Cash infusion will be used to expand from its foundation in local broadcast to other advertising platforms such as cable and satellite TV, the Internet and videogames, allowing advertisers a simple way to buy increasingly fragmented media.
Sony sees ITN as a partner in creating business models for its TV and film library.
"ITN offers advertisers cost-effective national reach," Sony Pictures Television prexy Steve Mosko said. "As advertisers continue to seek customized, targeted buys, ITN is positioned to grow in the marketplace."
Investment is the second major recent deal for Michael Lynton, president-CEO of Sony Pictures Entertainment, which bought social networking site Grouper.com in August for $65 million.