Feb 21, 22 | 5 min read
binance and forbes
Reading time: 4 minutes
Binance , one of the world’s largest exchanges, will acquire a $200 million stake in Forbes, one of the most well-known American business, economics and technology magazines. The deal is expected to close by the end of March this year, making Binance one of the two largest owners of the magazine.
This move by Binance is in line with a trend of big brands acquiring publishers or investing internally in the diversification of the content produced, such as news and podcasts. It is called brand publishing. Of course, this generates controversy, since the separation between Church and State, publishers and advertising agencies, has always been a bastion of journalism in the big vehicles.
Fortune, another major US business magazine, for example, was acquired in 2018 by a non-media businessman. Sports Illustrated, another gold-list title in the US market, was sold in 2019 to a company that owns the Elvis Presley and Marilyn Monroe brands.
In both cases, the move is similar: with circulations falling for years and prestige in decline ( the same thing happened with Newsweek ), the brand of these publications remains of great value to the public, even if the business is far from being as profitable as it once was . In the case of Sports Illustrated, for example, the new owner, Authentic Brands Group, said it would like to use the brand to promote events and betting businesses .
What will happen to Forbes? There are doubts. The Nieman Lab, one of the most prestigious journalistic analysis sites in the world, has been setting the tone for the decline in quality at Forbes in recent years. To reduce costs, one of the most recognized publications on the market began to open space for external collaborators, paying little. This practice also attracted scammers who wanted to promote themselves, as the site points out .
For Forbes, which plans to go public list of tunisia consumer email this year, the acquisition by Binance could be a relief. But how will the publication's editorial independence, which has long been compromised, be ensured? This Buzzfeed article shows how the contributors' area was already being used by companies to promote themselves with low-quality articles. Is this a trend that is accelerating?
According to the exchange's founder, Changpeng 'CZ' Zhao, the media is “an essential element in generating widespread consumer understanding and education,” implying that he would use the magazine's prestige to promote his own business. Shortly afterward, he assured via Twitter that he would maintain the publication's independence.
Benefits for the publisher and the brand
Forbes had previously announced its interest in executing a merger plan with a publicly traded special purpose company, or SPAC, in a bid to seek further growth opportunities for the business. SPACs are acquisition companies that raise money through an initial public offering (IPO) to acquire a business and then create a publicly traded shell company that also raises money in an IPO.
The deal comes at a pivotal time for the cryptocurrency industry , which has seen Bitcoin prices skyrocket , expanding its market and showcasing the growing influence of digital assets in the real world.
This IPO could allow Forbes to further capitalize on its digital transformation , leveraging Binance’s strategic insights and technology advice to maximize the brand’s business and make it a leader in providing information on digital assets like Bitcoin.
According to Mike Federle, CEO of Forbes: “ Forbes is committed to demystifying the complexities and providing actionable insights into blockchain technology and the entire emerging digital asset class ,” he says. “ With Binance’s investment in Forbes, we now have the expertise, network, and resources of the world’s largest and most successful cryptocurrency exchange and one of the innovators in the blockchain industry .”
Still, the investment raises questions from the media about the link between the brands.
Binance's investment in Forbes, less than two years after the cryptocurrency firm sued the magazine for defamation, has raised questions in the media about the merger of the brands.
The allegation at the time was that it suffered millions in losses over an article suggesting Binance’s organizational structure was designed to intentionally mislead regulators and profit illicitly from U.S. cryptocurrency investors. Binance dropped the suit in 2021.
This news also brings increased scrutiny from market analysts about the manipulation and popularity of cryptocurrencies among celebrities and media outlets, prompting warnings from regulators around the world. The investment therefore raises concerns among media observers about potential conflicts of interest.
Forbes CEO Mike Federle says the line won’t be crossed . And Binance’s interest is only as an investment. “And any investor who makes an investment in Forbes knows that impinging on editorial independence, journalism, or crossing that line will have a negative effect on their investment.”
For analysts, however, there is no way to view the deal this way. Henri Arslanian, a partner at PwC who frequently advises cryptocurrency companies, wrote on Twitter: “Binance buying part of Forbes is like McDonald’s buying part of Yelp or Marriott buying part of Tripadvisor. Even if there is no conflict of interest, there can be the appearance of a conflict.”
Let's wait and see.
