People Inc. Targets MGM Deal, Buybacks as It Seeks Sales of Non-Core Assets

People Inc. is prioritizing MGM and its People media business while exploring sales of non-core assets Vivian Health, The Daily Beast and Turo. Proceeds could fund share buybacks and acquisitions, though the company says it is not under pressure to sell cheaply. The company submitted an offer for MGM’s remaining stake on June 1, with a special committee reviewing the proposal. If it fails, People Inc. may continue repurchasing shares and could increase its MGM investment. People is shifting its digital strategy away from Google Search toward licensing, affiliate commerce, events and direct-to-consumer offerings. Licensing revenue rose 20% and performance marketing revenue 13% in the quarter, helping digital EBITDA margins expand to 26% from 23%.

People Incorporated Common Stock NASDAQ: PPLI is focusing its capital allocation on its MGM minority stake and its People media business while seeking new homes for several non-core assets, Chief Financial Officer Tim Quinn said during a fireside chat. Quinn said the former IAC has identified MGM and People, its publishing and media operation, as its core assets. The company plans to direct capital toward share repurchases and potential acquisitions related to People, while evaluating dispositions of majority-owned Vivian Health and The Daily Beast, as well as its minority investment in car-sharing company Turo.

“We feel pretty well-positioned to continue to monetize non-core assets and redeploy that money into the core,” Quinn said. He added that the company is not under pressure to sell Vivian or The Daily Beast at an uneconomic price.

People Inc. submitted an offer on June 1 to acquire the remaining MGM stake alongside other equity investors, Quinn said. He noted that Barry Diller had said the company expected a resolution within 60 days, though Quinn said he could not provide further details because the proposal is being reviewed by a special committee. People Inc. has held MGM shares for six years and considers the company undervalued, according to Quinn. If the transaction does not proceed, he said People Inc. would continue buying back its own shares and could opportunistically increase its MGM position.

On Turo, Quinn said the business delivered another strong quarter and has been producing growth alongside profitability. He said an initial public offering would be the preferred exit route, though a private sale could also be considered. Quinn said Turo, Vivian Health and The Daily Beast are each worth more today than they were a year ago, in his view.

Quinn said People’s digital strategy has been reshaped by declining referral traffic from Google Search as artificial intelligence changes how consumers access information. Google accounted for 21% of the company’s traffic, down from about 65% “not too long ago,” he said. The company divides digital revenue into session-based and non-session-based categories. Session-based revenue, which comes from visitors to its websites, represented 57% of digital revenue in the latest quarter and was down 1% year over year, Quinn said. Non-session-based revenue accounted for 43% and rose 19% in the first half. Non-session-based revenue includes events, social content and audiences, licensing, and D/Cipher advertising-targeting capabilities. People Inc. is investing most heavily in these areas as it seeks more direct consumer and advertiser relationships. The company’s current digital revenue outlook calls for mid- to high-single-digit growth, but its longer-term goal remains double-digit growth. Quinn said new brand-led initiatives, including membership pr...