Vox Media said it is acquiring Cafe Studios Inc., publisher of a popular podcast hosted by former Manhattan U.S. attorney Preet Bharara, part of a bid to expand its growing audio business.
The companies didn’t disclose financial terms of the deal. Bharara will join Vox Media as a host, co-founder and creative director of Cafe, which will continue to exist as a brand. Bharara will report to Vox Media Studios President Marty Moe.
Spun off from Some Spider Inc. in 2020, Cafe Studios publishes a handful of podcasts, including "Stay Tuned With Preet," Bharara’s current-events and pop-culture talk show; "Third Degree," a legal-analysis show; and "Doing Justice," a narrative podcast based on a book by Bharara of the same name.
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In an interview, Vox Media Chief Executive Officer Jim Bankoff said Cafe Studios was worth buying because of its strong advertising business, the quality of its shows and its subscription business. Cafe Studios charges subscribers for access to exclusive podcasts, a business model that Bankoff said he is interested in exploring.
"Vox Media is a company that is built on talented, creative people who connect and create authority and community with large audiences," Bankoff said. "And that’s precisely what Preet and the Cafe team have done."
Neither Vox Media nor Cafe Studios discloses their financials, and Messrs. Bharara and Bankoff declined to provide them. Vox Media expects to turn a profit in 2021, according to a person familiar with the matter, and it still has cash in the bank from a $200 million funding round in 2015 that valued the company at more than $1 billion, the person said.
Many digital-media companies are seeking deals as the sector matures. BuzzFeed Inc., Vice Media Group and Group Nine Media Inc. have all recently explored deals to go public or buy other firms through special-purpose acquisition companies, or SPACs, according to people familiar with the matter.
Vox Media, whose publishing brands include Vox.com, the Verge and SB Nation, was one of the companies recently approached by a SPAC connected to Group Nine, owner of the digital brands The Dodo and NowThis, but Vox Media is unlikely to do a deal with that firm, one of the people said. Vox Media might consider merging with another SPAC or raising financing in other ways, as it looks for acquisitions in such areas as e-commerce, sports media, podcasting and streaming video, the person said. In 2019, Vox Media bought New York Media in a stock deal that valued the parent of New York magazine at about $105 million.
The sale of Cafe Studios is the latest twist in the career of Bharara, the former Manhattan U.S. attorney who made a name for himself prosecuting insider trading,
political corruption, international terrorism and cybercrime. He was fired in 2017 after refusing a request by then-Attorney General Jeff Sessions to resign. He earlier said he had been asked to stay on by then-President-elect Donald Trump.
He launched his flagship podcast, "Stay Tuned With Preet," later that year. It is the most popular podcast in Cafe Studios’ portfolio, averaging about two million downloads a month, according to a person familiar with the matter.
Bharara said in an interview that he wanted to sell Cafe, in part, because teaming up with Vox Media was a quicker alternative to fundraising and would create bigger opportunities. Together, the companies hope to explore creating scripted shows and documentaries and hosting live events, he said.
Tapping into Vox Media’s expertise and its larger team will allow Cafe to expand its reach, Bharara said. "I want to do things of quality in this space like I did in the law," he said. "And we felt that Vox [Media] was the best fit for that."
"Stay Tuned" became a source of in-depth analysis of the legal issues regarding President Trump’s administration, including the special-counsel investigation into Trump’s conduct, overseen by Robert Mueller, and the president’s impeachments.
Bharara brings politicians, legal experts, scientists, celebrities and policy wonks onto his show. His guests have included comedian Samantha Bee, Sen. Cory Booker (D., N.J.) and geneticist Eric Lander.
Bharara founded Cafe with his younger brother, Some Spider CEO Vinit Bharara, an entrepreneur who co-created the e-commerce startup Quidsi Inc. —the parent company of Diapers.com and Soap.com—and then sold it to Amazon.com Inc. in 2010. The younger Bharara won’t be joining Vox Media.