WASHINGTON/TUNIS (CI MENA) – (Updated September 16, 2015 to add interview with US Rep. Hakeem Jeffries (D-NY) at Congressional Black Caucus Foundation ALC) – VICE Media LLC founder and CEO Shane Smith and Nessma owner Tarak Ben Ammar are quietly leading the way in bringing a veritable Renaissance to the often maligned news media industry.
[VICE Media founder and CEO Shane Smith speaking to Capitol Intelligence using Google Glass at The Atlantic’s Washington Ideas Forum. Washington, DC. Oct. 29, 2014.]
The tattooed journalist from Quebec has in a few short years transformed the Brooklyn-based VICE Media group into a USD 2.5bn plus company, with important minority shareholders such as Rupert Murdoch’s News Corp and Hearst Corporation and The Walt Disney Company (NYSE:DIS) jointly owned A&E.
In an interview with Capitol Intelligence, Smith said VICE Media generate revenues from its Vice News business by syndicating and licensing its breaking news and documentary productions to major television broadcasters such News Corp’s Sky Italy and France’s state broadcaster France 4.
VICE News made headlines and shocked the industry by using traditional broadcast news coverage techniques to produce global scoops such as its award winning fly-on-the-wall documentary of the Islamic State terrorist organization ISIS/ISIL.
The organization has been able to make important — and profitable inroads — into what was once a near monopoly by Ted Turner’s Cable News Network.
During an interview with Capitol Intelligence at the The Atlantic’s Washington (DC) Ideas Forum, Smith said that the company is looking to make acquisitions as it prepares itself for an eventual initial public offering.
While Smith did not respond to a question whether CNN could be a target, industry bankers said such an acquisition would make sense as Time Warner (NYSE:TWX) would like to cash-out of the 24-hour news network to satisfy shareholders’ disappointed with Murdoch’s 21st Century Fox (NASDAQ:FOX) failed bid for the company.
“CNN is a great international news company that has great profit margins notwithstanding declining rating in the US,” a leading media M&A banker said.
A senior source within CNN told Capitol Intelligence that the real financial story behind CNN remains unknown.
“We generate USD 600m of operating profit and are revenues are from cable subscribers and ratings are completely unimportant,” the source said.
VICE Media CEO Shane Smith speaking at CUNY Graduate School of Journalism mentioned CNN in passing while discussing potential acquisition targets for VICE Media.
[VICE Media CEO and co-founder Shane Smith covered by Capitol Intelligence/BBN using Google Glass on buying television broadcaster and CNN at Knight Foundation/Cuny Graduate School of Journalism Media Innovation Awards. New York City. Dec 1, 2014]
Another deal that may interest Vice Media’s Shane Smith is Egyptian billionaire Naguib Sawiris announced takeover of a 53% stake in pan-European broadcaster Euronews from France Televisions and Italian state broadcast (Radio e Televisione Italiane) RAI for EUR 35m.
Vice Media already is partnered with France Televisions with its France 4 deal and RAI General Director (former) Luigi Gubitosi worked for Sawiris as the CEO of Italian mobile phone operator Wind Telecommunicazioni prior to the company being sold to Russia’s Vimplecom for USD 6 bn in the spring of 2011.
While the acquistion of Euronews is a “political investment” by Sawiris, Euronews can be a very lucractive add-on for Vice Media, a European M&A TMT banker told Capitol Intelligence.
Vice Media’s Shane Smith did not respond to several email request for comment at time of publication regarding potential for Euronews or cooperation with Ben Ammar’s Nessma.
In September 2014, Vice Media sold a 10 percent stake each to Technology Crossover Ventures (TCV) and A&E Networks for a total of USD 500m. This was after 21St Century Fox acquired a 5% stake in VICE a year earlier for USD 70m.
Tarak Ben Ammar, the French-Tunisian owner Nessma, is rapidly becoming the Ted Turner of North Africa with his television networks in Tunisia, Egypt, Morocco, Algeria, and France.
Ben Ammar said that Nessma in Tunisia was able to use television news broadcasts to bring about the first truly democratic regime to both Africa and the Arab world.
[Nessma owner Tarak Ben Ammar speaks with Capitol Intelligence/MENA using Google Glass during Amcham Tunisia’s Investment & Entrepreneurship Conference in Tunis, Tunisia. March 5, 2015]
“In 2009-2010, we were the only ones to criticize the regime of (Tunisian President) Ben Ali, we had attacked (subsequent government) made up of (moderate Islamist) Ennahda,” Ben Ammar said, noting that in the end, Tunisia’s first post-Ben Ali Prime Minister and Tunisian President Beji Caid Essebsi is entering into a democratic coalition as a senior partner with Ennadha.
In fact, Ben Ammar from his base in Paris hosted secret talks between Ennadha founder Rachid Ghannouchi and Beji Caid Essebsi that lead to the appointment of technocrat Prime Minister Mehdi Jomaa and a power sharing agreement between Tunisia’s two main political forces.
“This is the first time in Arab world we have had a peaceful transfer of power. After Ennadha’s defeat in the parliamentary elections, Ghannouchi rang up Essebsi to congratulate let him on his victory,” Ben Ammar said.
However, Ben Ammar’s commitment to Tunisian democracy came at a great personal costs. His corporate attorney and good friend Chokri Belaid was assassinated in February 2013 in Tunis by a gunman in a plot to destabilize the country’s nascent democracy through the killing of a secular opposition leader.
Nessma, according the Ben Ammar, has over 50m viewers with 4.5m in Tunisia, 6.5m in Algeria , 2m in Morocco, 2m in Libya and some 14m in Egypt. He said that from this year, Nessma is generating profits on revenues of over USD 10m and is either the first or second TV broadcast group in the countries in which it operates.
in December 2012, Tarak Ben Ammar announced at a news conference at the Fours Seasons in Milan that he would acquire the Egyptian television network from Egyptian billionaire and close friend and Parisian neighbor, Naguib Sawaris.
After graduating from Georgetown University where he forged a friendship with Stokely Carmichael, Ben Ammar returned to his native Tunisia where helped produce George Lucas’ Star Wars in Tataouine and Steven Spielberg’s Raiders of the Lost Ark.
In a brief chat in East Hampton where movie director has a home, Spielberg said he fondly remembers Ben Ammar as an old friend.
However, Ben Ammar is better known for his role as close adviser to former Italian Prime Minister Silvio Berlusconi’s listed Mediaset (BIT:MS) television empire and Saudi Arabia’s biggest investor, Kingdom Holding owner Prince Alwaleed Bin Talal.
Tarak Ben Ammar negotiated Prince Alwaleed Bin Talal investment in Berlusconi’s listed Mediaset television empire and at the same time Tarak Ben Ammar is a board member of Telecom Italia (NYSE: TI) and southern Europe’s biggest investment bank, Mediobanca.
Another sign of Ben Ammar’s growing clout was his recent appointment to the supervisory board of listed French media giant Vivendi SA (EPA:VIV).
Speaking to Capitol Intelligence on the sidelines of Amcham Tunisia’s Investment & Entrepreneurship Conference held in Tunis on March 5and keynoted by US Commerce Secretary Penny Pritzker, Ben Ammar said he would like to meet with Vice Media’s Shane Smith about possible cooperation in the future.
Africa has also proven extremely lucrative for Viacom (NASDAQ: VIA.B) which has successfully launched its business on the African continent, according Viacom International Media Networks Africa Senior Vice President and Managing Director Alex Okosi.
[Viacom Senior Vice President and Managing Director Viacom International Media Networks Africa Alex Okosi speaks to Capitol Intelligence using Google Glass at IFC Ai africainvestor CEO Investment Summit during IMF World Bank annual meeting in Washington on October 9, 2014]
In an interview during the World Bank IMF annual meeting in Washington, DC, Okosi said Viacom has just launched programming developed by its African-American Washington, DC-based subsidiary Black Entertainment Television (BET) and is looking to expand its reach beyond the English speaking markets of South Africa and Nigeria.
The re-emergence of the news media as a powerful and profitable economic force is not limited to broadcast television. Amazon founder Jeff Bezos has purposely broken away from his Silicon Valley peers such as Google (NASDAQ: GOOGL), Uber and Facebook (NASDAQ:FB) — who do little to hide their utter disdain for the news media and journalists — by acquiring the Washington Post for USD 250m.
[Amazon and Washington Post owner Jeff Bezos reaction to being interviewed using CI Glass by Capitol Intelligence at National Press Club. Washington, DC. September 17, 2014]
The newspaper industry will also be seen in a different light as groups of major investors begin tabling respective bids for the Tribune Company‘s Chicago Tribune, LA Times and Baltimore Sun.
“Newspapers are the last form of advertising welcomed in people’s home,” the Wall Street M&A banker said. “Jeff Bezos is already doing this with the Washington Post and we will see some big players use newspapers to make a good, and profitable dent in the highly inefficient social media advertising market.”
One potential mega media dealmaker may well be recently-elected Congressman Hakeem Jeffries (D-NY), whose Congressional district in Brooklyn includes both Shane Smith’s Vice Media and the US operations of Russian tycoon and Brooklyn Nets owner, Mikhail Prokhorov.
[Congressional Black Caucus Foundation CO-Chair Rep. Hakeem Jeffries (D-NY) speaks to Capitol Intelligence/CI MENA using CI Glass at Congressional Black Caucus Foundation annual convention. Washington, DC. September 16, 2015]
Speaking to Capitol Intelligence/BBN at the Congressional Black Caucus Foundation annual convention, Jeffries said he is very aware of the great economic opportunities that both both Vice’s Smith and Brooklyn Nets’ Prokhorov can bring to his district and the United States in general.
Mikhail Prokhorov is estimated to have more than US 10bn in cash following his timely sale of his large stake in Russia’s giant mining concern, Norlisk Nickel.
By PK Semler in Washington, DC and Tunis, Tunisia. For more information please call +1-202-549-3399 or email email@example.com
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