Penske Media’s takeover of longstanding entertainment industry publications The Hollywood Reporter and Billboard was a clear win for Jay Penske, but the impact this expanded media empire will have on the advertising business fueling Hollywood’s trades remains unclear — as well as what industry coverage will look like with one company monopolizing the space. Media analysts and entertainment executives who spoke with TheWrap questioned how PMC would begin to differentiate Variety, THR and Deadline when approaching advertisers. “Each of these publications are different, they have their own styles, etc. But they’re all basically covering the same events, the same people, the same companies,” Gabriel Kahn, a journalism professor at the University of Southern California, said. “The only reason why these mergers make sense is because now I can have one salesperson who knocks on the door of Disney or Universal, instead of three, and says, ‘I have three different products to offer you.’ Problem with that is those products damn well better be different, have different audiences.” Update: A leading media executive told TheWrap that a similar joint venture deal had been proposed in 2016 to MRC owner Todd Boehly, but he concluded that the combined advertising offering would result in lower overall sales. The same logic is true now, although the heightened circumstances of Covid pushed Boehly into making the deal with Penske. “Awards season is going to be challenging for them,” said this executive. “It’s their biggest revenue line. I don’t see how putting these things together makes you a larger revenue beneficiary during awards season – I don’t see how that works.” The executive continued: “You can pretend you’re having two separate conversations if talking to (THR’s advertising VP) Victoria Gold and (Variety Publisher) Michelle Sobrino, but those people work for the same boss. There is no mystery in it. The decision-making on the other side is held in one person’s control.” One veteran entertainment executive told TheWrap that it’s possible PMC could create ad packages that leveraged the trade publications as a bundle — which could come at a cost to other publications not under the PMC umbrella, including TheWrap. “Whether you’re Netflix or Amazon or a legacy studio, I can’t believe you’re going to continue as you have been,” the executive said. And with a virtual monopoly over Hollywood’s top trade publications, another individual close to the situation said PMC would have an easier time convincing readers to pay for content subscriptions — a move that Variety has already begun with its Variety Premier service — with bundled ads that could appeal more directly to advertisers who typically don’t seek out individual trade publications. Conversely, advertisers could also have more leverage under a bundled situation because all the grouped publications would have their ads affected by an advertiser pulling out — a move that could potentially deter the publications from pursuing aggressive or critical pieces about a major advertiser. “Let’s say Netflix goes, ‘We don’t like something you published in THR. We’re pulling our advertising from Variety, THR and Deadline,’” Kahn said. “Now we have a situation where we’ve got essentially one economic entity, one business entity, that is supposed to collect from a dwindling number of potential advertisers.” The media executive concurred: “Netflix is going to say, ‘I’m not spending $5 million and $5 million (on THR and Variety), I’m spending $8 million and you’re gonna love me for it.” As with all potential monopolies, there is also the risk that PMRC could leverage its dominance to the disadvantage of competitors. “In this age of media moguls depicted on ‘Succession,’ it’s a lot of concentrated power in one place,” the veteran executive said, adding that he imagined a potential sales argument during awards season: “Don’t pay any attention to the little guys: You don’t need The Envelope, you don’t need TheWrap.” “This merger is essentially following the tech approach that has become a trend across every industry. Facebook, Disney, Amazon — they all buy or merge with their competitors to become these monoliths and even bigger giants in their industries,” Coltrane Curtis, a former Complex editor who went on to found marketing agency Team Epiphany told TheWrap. “In this case, this new joint venture has become the corporate gatekeeper of some the biggest entertainment and music publications — almost forcing advertisers to work through them if they are trying to reach a certain demographic. The challenge is going to be how well can they leverage the data (which they now have unfettered access to) to sell advertisements to companies that want to reach diverse audiences?” As TheWrap recently reported, the editorial staff at Variety is “very concerned and freaked out” about what the consolidation would mean for editorial coverage. In April, MRC co-CEOs Asif Satchu and Modi Wiczyk abruptly fired THR top editor Matt Belloni following escalating disputes just that issue — including what one insider described as pressure to spike unfavorable stories about friends of top executives and to overpromote MRC-owned businesses like Dick Clark Productions and MRC Television, the studio behind shows like “Ozark.” (An individual close to MRC, then known as Valence Media, had denied that any stories were spiked.) “I hope it will remain church and state for securing editorial coverage across the PMRC brands,” one talent publicist told TheWrap, referring to the traditional strict separation between editorial operations and advertising/business ventures. “At the end of the day, our goal is to have transparent conversations with editors and journalists, and ultimately proceed with the best offer.” Staffers, many of whom already saw downsizing and furloughs due to the pandemic, are now bracing for another round of pink-slips. “That’s been the playbook for news media for the last two decades,” Kahn said. But that has not been the case with the properties Penske has acquired in the past. As Penske has bought up one entertainment title after another — starting with Deadline, then Variety, Indiewire, Gold Derby and Rolling Stone — he has kept each publication mostly intact, with its own editorial and sales teams. There is no reason to think he’ll do differently with THR, Billboard and Vibe. It’s also unclear how the newly merged PMRC will impact Billboard, the music-industry giant that was by far the most profitable of the MRC publications because of its annual awards ceremony and the music sales data it licenses out. One individual told TheWrap that MRC owner Todd Boehly is keeping MRC Data, the data arm of the company that produces both the Billboard music-sales chart data and Nielsen data. A rep for PMRC did not respond to a request for comment. If true, then Penske assumes control of only the core media business, which is the part that has been struggling for a decade, losing tens of millions of dollars every year. Still, many in the industry tip their hat to Penske for building a media empire that dominates its field. “He has done a brilliant job of picking up all these different brands,” the entertainment executive said. “Whether he’s bought them at distressed prices, only he and his accountants know for sure.” (According to the New York Post, Penske paid about $225 million for 80% control of the new joint venture — which would contradict the idea that it’s a joint venture.) Another individual close to the situation added: “No. 1 winner: Jay Penske. All the rest are losers.” Brian Welk, Beatrice Verhoeven, Thom Geier, Sharon Waxman and Lindsey Ellefson contributed to this report.