A COMPLEX INVESTMENT: In recent years, Hearst Corp. has been on the hunt for New Media investments as it evolves its core publishing business to the digital landscape. The New York-based firm has made investments in ESPN, Awesomeness TV and digital darling Vice Media. Its latest is Complex Media. Hearst revealed Tuesday that it has shelled out $21 million for an undisclosed minority stake in the music and pop culture-inspired company.
Marc Ecko, co-founder of Complex told WWD that he and co-founder and chief executive officer Rich Antoniello were approached by Hearst in 2013 when the company closed its last round of funding – $25 million — from Iconix Brand Group Inc.
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“We had a really good creative rapport with them. We stayed in communication with these guys [Hearst] as we developed the company,” Ecko said. “We weren’t out there in the market necessarily looking to raise. But the more time we spent with them, the more we realized they’d be a good partner.”
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As part of the deal, Hearst Entertainment & Syndication co-president and Hearst Digital Studios president Neeraj Khemlani will take a seat on Complex’s board of directors. Ecko said he’s looking forward to Khemlani’s “Jedi-like counsel” to help grow the company. For his part, Ecko said he will deliver to Hearst a new audience, namely one made up of Millennial male consumers. What this partnership will shake out to be is unclear, but Ecko did not dismiss the suggestion of Complex’s stories living on Hearst’s various sites, nor did he shrug off the suggestion of tapping into the media company’s TV business.
Complex, which estimates its reach to be over 57 million unique viewers, has a similar cultural feel to Vice Media, which aside from hard news, also covers lifestyle topics. Although he praised Vice, Ecko called it “the punk New York Times,” and insisted that Complex was, well, “more complex” and “diverse” than the Brooklyn-based Vice.
“We’re kinda the greatest [media] story never told,” Ecko said, tooting his company’s horn. Complex has been profitable since 2010, the company claims.
While its growth is far from mind-blowing versus the likes of Buzzfeed and Vice, Complex has managed to thrive on a somewhat lean budget since it launched in 2002. To date, the company has raised $51 million, which includes investments from S3 Ventures, Austin Ventures, Accel Partners, Iconix and now Hearst. Complex currently operates a network of sites in addition to its own destination one, Complex.com, that, according to Hearst, “focus on niche cultures and report on trends in pop culture, entertainment, fashion, hip-hop music, art and design, food, technology, sports and video games.”
“This is an important investment for us and one we view as a crucial strategic play. As we look towards further expansion in digital and linear entertainment, Complex will have access to the extensive expertise, scale and partnerships that only a global media company like Hearst could offer,” said Antoniello.
Since Ecko Unltd. designer and entrepreneur Ecko founded the print publication in 2002, Complex has grown its business in digital, video, branded collaborations and other emerging platforms. Pivoting more from its print roots to video, the company signed Spike Lee earlier this year as a board adviser of branded video projects. He will help develop formats that “bridge digital and linear media.”
Although print has definitely receded, making up about 2 percent of Complex’s revenue, the bi-monthly magazine is still a central part to the brand, Ecko noted, even though its circulation is small. (Complex declined to provide the magazine’s circulation, which is too small to be measured by the Alliance for Audited Media).
“Buyers are looking for scale of audience. If you have digital scale of audience and…you sell printed magazines… it’s a macro sort of purchase,” he said, offering that a larger e-commerce play could be down the line, but not one that turned Complex into a retailer. “I don’t want to run and own a warehouse, that’s for sure. I don’t ever get stuck on some rigid view on what the business model should or shouldn’t be. There’s no single model [for media success].”