How Media Actually Makes Money | Blake Saunders

Blake Saunders (0:00)

A one-off media property, it's like hand-to-hand combat where you're selling ad sellers into the field effectively and having meetings and having to basically pitch and say, this is why you should advertise with us. But Google, Facebook and all these platforms have is consumer attention. This is something that like you want to beat the drum when you're looking at media companies, is like what's repeatable, programmable and scalable. A media company can have 50 events, but it's taxing the team, it's really not generating that much contribution. So Bending Spoons went public a month and a half ago. Half of their business is AOL. They bought AOL for roughly four times EBITDA, and now they're trading at like 16 times EBITDA, and that's like six months later. I think time kills deals and like at three o'clock in the morning, I've had lawyers decide that they want to stop working and I had to call everybody and wake them up and say, you're going to get this done right now.

CJ Gustafson (1:02)

Is this thing on?

Blake Saunders (1:06)

Yesterday's price is not today's price.

CJ Gustafson (1:17)

Welcome back to Run the Numbers. My name is CJ. I'm a recovering tech CFO. And today we are talking to my friend, Blake Saunders. Blake is the founder and managing director at Core Advisors, an investment banking firm that concentrates on the media industry. So I got my old CFO bat phone. Whenever I got a question about deals that are going down in media, how different things are monetized, Blake is the guy I pick up the phone and call or text. Honestly, I text him a lot because I hate when people leave voicemails. It's so annoying. Blake and I go deep into the different monetization models and tech and we go back in time to say, hey, how did some of these original newspapers start making money? Then trace that today with the creator economy and everything that's going on with podcast deals. We also talk about the value of IP libraries and he takes us through some really cool deal experiences that he's had negotiating within the technology media and communications sector. If you are somewhere adjacent to ads, which I think we kind of all are, I mean, this whole AI cap ex boom is driven by ads, if you didn't know that. Or media, you will really dig this episode. Stay tuned. Blake, welcome to the Run the Numbers podcast.

Blake Saunders (2:22)

Yeah, thanks for having me on. I always think that what I have in my brain is not that interesting, but people seem to like it.

CJ Gustafson (2:29)

You're like my media sherpa, man. I'm a CFO out here in the wilderness, just trying to crawl through this whole media landscape. You've been in this game for two decades now, explicitly focused on media.

Blake Saunders (2:40)

I'm at a small investment bank that I actually started last year, but I've been in media investment banking for over 15 years, and a lot of the things that create value in media are the same. They just sort of look different. And so I think where I can be helpful, we're helpful with our clients is just giving them good advice on what actually works versus what's shiny and what everyone's talking about on LinkedIn.

CJ Gustafson (3:01)

So you're both a banker, but you're also a founder because you founded The Joint. I want to start off with a question here from our mutual friend, Matt Russell. I'm totally ripping off his question, but what does media mean to you, Blake?

Blake Saunders (3:13)

To me, it's the creation of content that's distributed to affect some change. I was originally thinking to affect people, but I think more and more what you're seeing is people are realizing that they need to also impact the LLMs and these agents because consumers are B2B media. They're not actually engaging directly with the content, but they're allowing some technology layer to get the answer for them.

In terms of impacting or affecting people's change, it's monetization, people's perception of something, changing habits, things like that. So media is pervasive. It's effectively our attention being changed by something that we see or hear or interact with.

CJ Gustafson (3:54)

Your answer did change a bit from when you were on Business Breakdowns podcast on the Colossus Network. And it's interesting because in the last year, I've started to get both newsletter subscribers and podcast subscribers from ChatGPT, Perplexity, and Cloud, which was not a thing six or 12 months ago.

Blake Saunders (4:13)

On an anecdotal and specific level, the advertisers are demanding different things from media, saying, I need you to help me show up in the search results. Or my CEO said, what is the best XYZ company? And we're not showing up. We will pay you whatever it takes to fix that. I think what's pretty wild, obviously, Google search results and showing up organically. There's been a tested method of getting back links and things like that. These models are changing so quickly that people are having success having the changing the results. But it's like this ever evolving landscape of how to impact what these machines are feeding back into the humans.