Peter Craig literally wrote the book on accounting for media publishing companies, so when NSBN LLP CPAs & Advisors acquired his practice in May, it was primed to reach a sector that was brand-new to the 63-year-old firm.
Bay Sherman & Craig, Craig’s practice with three other partners who also joined NSBN, then gained an opportunity to bring its specialized expertise to the even bigger media companies a top regional firm like NSBN could attract.
At the moment, Los Angeles-based NSBN’s newly acquired media publishing clients are only a small fraction of the firm’s more than 8,000 clients across various industries, but managing partner Ken Miles plans to expand that practice with the same growth strategies the firm has always employed.
Those include the “three traditional ways” of client growth, ongoing marketing efforts, and, of course, “the mergers and acquisitions route that is ever-so-popular in this industry today.”
Ubiquity aside, NSBN takes a thoughtful approach to its M&A activity. “When we do acquisitions or mergers, we look for complementary services; if possible, picking up an area we don’t currently have,” Miles said.
That was certainly the case when acquiring Bay Sherman & Craig, which not only brought in a new industry focus, but the expertise of partner Peter Craig, who has decades of experience consulting for the media publishing and trade show industries, authoring books like Accounting & Finance for Integrated Media Publishing Companies.
Craig’s leadership is especially valuable in navigating what both he and Miles acknowledge to be a challenging industry. Media publishing is in such a constant state of fluctuation, in fact, that even the terms to describe it have changed over the years.
Specifically, the area Craig works in used to be defined as magazine consulting, but now falls under the wider umbrella of media consulting. He works with companies that cater to consumer and business-to-business media, trade shows and digital media, but have expanded their revenue models to attract advertisers that are no longer only paying for traditional campaigns. Some media companies have found success expanding into events and trade shows, and in offering new online tools and platforms that leverage research and data, which advertisers find especially valuable. Some, on the other hand, have not — leading to a highly transactional environment that almost mirrors the accounting profession’s.
Craig and his practice consult on these mergers and acquisitions, with the successful consolidations paralleling NSBN’s approach.
“There continue to be consolidations where larger companies pick up pieces, the same way NSBN is looking to — the media business does the same thing. They want to add platforms so it’s either make or buy … it comes down to fit and price. That’s probably true in every industry … adding pieces that ultimately complement what they’re doing.”
Craig advises against purchases based on popularity or economies of scale.
“Publishing companies that buy anything they think is popular regardless of field of interest, I think is a very, very risky strategy,” he explained, noting that in this industry, “Successful mergers, in terms of number, are less than 50 percent. Sometimes it’s the fit, sometimes it’s management, or a misunderstanding of what they are acquiring — the expectations are much too great.”
The key, then, is in planning, which is where NSBN comes in to help.
Craig’s team conducts operations reviews that delve into the internal workings of a company. Together with experts in circulation, editorial and printing, NSBN evaluates where the company can improve. In nearly a dozen of these reviews over the years, Craig has worked with places like the Mayo Clinic to track the circulation of its numerous publications and make recommendations for systematic change. These clients are also provided with more traditional tax and audit services, especially with the expanded resources of NSBN’s more than 100 members and 22 partners. Hot areas of work for this industry, specifically, include revenue recognition.
“With the merger, we were given the opportunity to reach out to companies that we were [once] too small to handle their work,” Craig shared. “A few [prospective clients], some local, we [can] go back to now that we have more resources, people, and more expertise in audit and taxes.”
Craig envisions continuing the business development techniques that grew his firm pre-merger, like speaking engagements and industry functions, but will undoubtedly benefit from NSBN’s more wide-ranging plan.
“We are always looking for opportunities to grow and expand to areas where we don’t have a presence,” Miles explained. “In particular, we are on the lookout to implement a specialty in the areas of litigation support and forensic accounting. It’s an area in relatively high demand that we currently don’t serve, and we have to outsource that.”
Instead of referring that potentially lucrative business, then, NSBN is looking to bring it in-house. The firm is also in the early stages of another acquisition, which, if all goes well, it expects to close late next year.
Much like the successful companies composing the firm’s new client base, NSBN recognizes the need to evolve or die.
“Our general initiative, or strategy, is to continue to grow,” Miles shared. “If we don’t continue to grow, we shrink, and if we shrink, that becomes a significant problem.”
AT A GLANCE
Firm: NSBN LLP CPAs & Advisors
Headquarters: Los Angeles
Managing partner: Ken Miles
No. of partners/staff: 22/100
Year founded: 1953
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