Adam Sachs joined the Los Angeles-based podcasting studio and advertising network Midroll Media before Serial and other popular shows put the word podcasting on the tip of everyone's tongue, including potential acquirers. In late July--just before it was revealed that the company hit No. 150 on the 2015 Inc. 5000--E.W. Scripps purchased Midroll for an undisclosed amount. Sachs spoke with Inc. about supercharging growth, introducing new media to an old-media world, and finding a match made in podcast heaven.
--As told to Noah Davis
My previous company, Ignighter, became a surprise hit in India, and I spent so much time on a plane or sitting alone in Mumbai that I became a voracious podcast consumer. We sold Ignighter to Match.com, and I was seeking a new challenge when Midroll founder Jeff Ullrich reached out and asked me to be COO of the fledgling podcast network in late 2013. I became CEO soon after, just in time to take advantage of the podcast resurgence. Midroll has two parts: Earwolf, about 35 owned-and-operated podcasts such as Comedy Bang Bang and How Does This Get Made? that are recorded and produced out of the company's L.A. office; and Midroll, which has 250 shows including WTF With Marc Maron, the Nerdist Podcast Network, and a host of NPR podcasts for which Midroll serves as the ad network.
Our scale and expertise are the key. We charge the advertiser a lot of money, because we know how much the ads are worth. Indie podcasts come to us and say, "We get a $10 CPM." We're like, "No, no, no. It's a $25 CPM." We have pricing power.
In the fall of 2014, a lot of people started getting excited about the podcasting space. We started to get a lot of inbound interest from VCs and private equity funds. We ran a business in which we were profitable, so we didn't need pure capital. The idea of taking on private equity investors and having a board wasn't that appealing, but the idea of having a good economic outcome and partnering with a company that could help us accelerate our goals was. The space is getting more competitive every day.
We started prepping for conversations toward the end of last year, and at the beginning of this calendar year, we started having them. There were a lot of potential acquirers that were interested; we had serious talks with about eight companies. Ultimately, while the economics played a big part of it, we fell in love with the E.W. Scripps people. They are a 137-year-old journalism company. Their DNA is in journalism. In an early meeting, their chief digital officer, Adam Symson, asked me, "How important is it that the acquirer doesn't tell your artists what they can and can't say?" I told him it was nonnegotiable, that that was our bread and butter. They are a big public company, and I thought they would have regulations about what people could say, but he said they were a journalism company and they believed in freedom of speech and freedom of expression. We feel the same way. We would never want to stifle anyone. That was a cool moment.
We flew to Cincinnati, where Scripps is based, and we met with their whole digital team. We spent the day with the CEO, Rich Boehne. It felt like they were really good people. They weren't private equity sharks. They were podcast fans.
They care about quality, too. That's really important to us. I'm still the CEO, reporting directly to Adam. My management team is staying intact. Nothing is changing from a team perspective. They like what we've done. They like what our vision is. And they want to help us get there faster.