Rolling Stone Magazine may no longer be up for sale due to an old lawsuit
Rolling Stone Magazine has recently announced that it's up for sale. The $80 million price tag might be a lot for some, but the iconic music industry magazine has issues haunting its reputation that may greatly reduce its price tag.
The sale could go two directions: A prospective buyer could hold off on the purchase until the lawsuits are settled and off the table, or they could jump on board and purchase the magazine during the lawsuits to deeply reduce the price. The buyer could also separate the lawsuits from Rolling Stone's main assets. The longer the lawsuits trail out the lower the price is going to go, making it more or less appealing to a buyer. Either way, Jann Wenner, Rolling Stone Magazine's founder, wants out.
Very shortly after Rolling Stone placed a for sale sign out front, two frat guys from the University of Virginia revived a defamation lawsuit against the magazine. The contents of the false $25 million lawsuit were allegations about a gang rape at the University of Virginia's Phi Kappa Psi fraternity back in 2014. Sabrina Rubin Erdely, the journalist who composed the Rolling Stone article about the false allegations, was fired. The lawsuits, however, continue to flow in and cost the magazine millions of dollars.
Wenner has stated that he doesn't want the magazine to rely on advertising in the future. If Rolling Stone doesn't generate new services, products, and/or brand extensions, then it may have to rely on advertising. The publication has a lot of legacy debt, and Wenner is actively searching for a buyer with "lots of money."
Earlier this year, a defamation lawsuit that involved the university's dean, Nicole Eramo, was settled for $1.65 million, much lower than the jury's $3 million verdict. The two frat guys in the aforementioned gang rape fairy tale were not named in Erdely's Rolling Stone article. However, Erdely did provide numerous details that rendered the two frat guys identifiable.
The United States Court of Appeals for the Second Circuit have allowed the case to proceed in a "close call."
H/T: Digital Music News