Variety being sold to Penske, Third Point - sources

By Ronald Grover

LOS ANGELES, Oct 9 (Reuters) - Variety, the century-oldentertainment trade newspaper once considered the bible of themovie industry, is being sold to online publisher Jay Penske andprivate equity firm Third Point LLC for about $25 million, twosources with knowledge of the deal told Reuters.

Penske and Third Point have struck a deal to buy themoney-losing, 107-year-old newspaper from medical and technicalpublisher Reed Elsevier , which put it up for sale inMarch, the sources said. The sources requested anonymity becausethe deal has not been announced.

The 33-year-old Penske, youngest son of racing legend andbusinessman Roger Penske, built an online entertainment empirebuying sites including MovieLine.com and the celebrity siteHollywoodLife.com. The most visible property of his Penske MediaCorp is DeadlineHollywood.com, bought in 2009 and run by founderNikki Finke, considered Hollywood's most influential blogger.

Finke is expected to advise Penske on the remaking ofVariety, which loses an estimated $10 million a year, accordingto one of the sources.

One option being considered is trimming Variety's staff,making it a daily rather than a weekly, and running longer,trend pieces, the sources said. Variety could be twinned withDeadlineHollywood.com under Finke, whose site has built areputation for breaking industry news, they said.

Billionaire Ron Burkle and New York hedge fund AvenueCapital, owner of the National Enquirer newspaper, were earlybidders for Variety with offers around $25 million, said twosources with knowledge of the earlier process.

Reed Elsevier spokesman Tom Reller did not respond to phoneand email messages. Penske confirmed a deal was in the works butdid not divulge details.

(Reporting by Ronald Grover; editing by John Wallace)