Update: Hollywood Media Sells Hollywood.com To Its Own Chairman; Up To $10 Million, Mostly Earnout

imageAn odd deal on multiple fronts… Hollywood Media (NSDQ: HOLL), the entertainment news and ticketing firm, is selling its flagship unit/domain, Hollywood.com. The buyer is R&S Investments, a firm controlled by the company’s own chairman and CEO Mitchell Rubenstein and president Laurie Silvers. The price is up to $10 million, but $9 million of that is earnout, with just $1 million paid upfront. The company will also get paid if R&S sells Hollywood.com before the earnout period is complete. Despite the name, the release notes that Hollywood.com represents just 4 percent of revenue, and was a major money loser ($2.5 million) for the last 12 months. Basically, it looks like there’s more value there as a premium domain, than as a lower-tier ticketing and showtime site. Going forward, the company will focus on its Broadway.com ticketing business, as well as UK’s CinemasOnline. Release.

Update: Rafat adds: This is a very strange turn of events…the company has been a target for the longest time, and in fact had been trying to sell it, on and off, but looks like a buyer never came through. In fact, as late as its latest 10-Q, the company said it was still trying to sell the company, and had restarted the process after halting it earlier in the year. It did sell off its Baseline/StudioSystems and Showtimes businesses in 2006 and 2007, the former to New York Times for $35 million. Also, the company hired Kevin Davis, the former GM of Variety.com, as its new President & COO a year ago, with the expressed purpose of relaunching Hollywood.com as a new consumer destination celebrity news site, and I know it was very close to relaunching it. I am assuming that part it still happening, but the timing is certainly strange….