Variety is sold for about $25 million

Variety has been a Hollywood must-read and a global show business symbol for more than a century, famous for its snappy lingo and its breathless coverage of entertainment industry news.

Its front-page headlines are legendary, with gems such as “Sticks Nix Hick Pix” for a story about people in rural areas rejecting movies about their own lives and “Ovitz no Govitz” for a piece on talent agent and studio executive Michael Ovitz being passed over for a job. An article about Internet piracy had the headline “Cybergeek Leaks Freak Pic Biz.”

Reporters write in an invented “slanguage” that makes readers feel like members of an exclusive club, with “hoofers” and “oaters” standing in for Westerns, “boffo” for a strong box-office performance, and “ankled” when a Hollywood executive is pushed out the door.

QUIZ: Variety slanguage - Test your knowledge

Despite its historical cachet, Variety has been buffeted by the same forces that have affected the newspaper industry — a decline in print advertising and increasing pressure from online competitors.

On Tuesday, a would-be white knight emerged to unite old Hollywood media and new with a deal that suggests confidence in the Variety brand. Jay Penske, a 33-year-old digital impresario, acquired Variety for about $25 million. The Santa Monica-based Penske Media Corp. already owns one of Variety’s fiercest competitors, the online-only trade Deadline.com, along with six other digital news brands.

The deal marks only the second time Variety has changed hands. Its former owner, British conglomerate Reed Elsevier, bought it from descendants of founder Sime Silverman in 1987 for about $60 million. It’s also the end of a nearly seven-month-long auction process during which other prospective buyers including supermarket magnate Ron Burkle and Avenue Capital, a New York hedge fund that owns the National Enquirer, came and went.

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Reed, which is based in London, had originally hoped to get more than $40 million for Variety, according to people close to the process who requested anonymity because the discussions were private. But shrinking revenue also shrunk the price tag.

As recently as 2006, Variety generated $33 million in operating income on $92 million in sales. This year, it’s projected to earn a profit of $6 million on $45 million in revenue, according to knowledgeable people not authorized to discuss the matter publicly. The editorial staff is now at about 50 people, down from nearly 100 five years ago.

In an interview, Penske said he believed Variety had faltered because of complacency, and that he intended to make it “absolutely fundamental and indispensable” to its readers in Hollywood.

He has not yet determined, however, what alterations he will make, including whether he will stop publishing print editions.

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“Before we make any substantial changes, we need to spend more time with the current team,” he wrote in an email.

But he said Deadline and Variety would continue as separate brands, though some staffers may contribute to both.

Daily Variety’s circulation as of March was nearly 28,000, while the weekly Variety was just over 30,000, according to research firm BPA Worldwide. The Variety.com website had about 17,000 paying users, some of whom also subscribe to print editions.

Still, Variety’s decision to charge for online content has left it far beyond its free competitors in readership. Variety.com had 320,000 unique visitors in August, according to ComScore, while HollywoodReporter.com and Deadline.com had 5.1 million and 2.4 million, respectively.

Many of Variety’s approximately 120 employees at its Miracle Mile office have long been worried about the fate of the paper. At a staff meeting Tuesday, the only news to emerge was that the paper’s president, Neil Stiles, who was installed by Reed in 2008, will depart as part of the deal, according to a person present who was not authorized to talk publicly.

Variety, of course, has survived other changes in the industry. Founded as a source for vaudeville news in 1905, Variety evolved as the entertainment business transitioned to silent films, talkies, television and the Internet.

Its success was built on its ability to deliver news that industry professionals couldn’t find elsewhere.

“People looked to Variety because the rest of the press didn’t cover the entertainment industry much until recently,” said Peter Bart, the former producer and studio executive who was Variety’s editor from 1989 through 2009.

Billing itself as “the Bible of Show Business,” Variety invented the reporting of box-office grosses and reviewed nearly every movie to hit the big screen and show to grace a Broadway stage. When a TV network staffer is promoted from senior vice president to executive vice president, Variety could be counted on to cover it.

QUIZ: Variety slanguage - Test your knowledge

“I used to start off every morning by reading Variety,” said producer and former Warner Bros. executive Lorenzo Di Bonaventura. “Seeing your name, or better yet the name of one of your projects, on the front page, was a coming-of-age event in your career.”

Not long ago, few would have imagined that it would be bought by a scion of the auto industry.

The youngest son of billionaire auto magnate Roger Penske, Jay Penske grew up in Michigan, where he was a nationally recognized lacrosse player, before attending the Wharton School of Business at the University of Pennsylvania.

After graduating, he co-founded Firefly mobile, a developer and seller of a cellphone designed for children, and raised money to acquire the Web portal Mail.com. That company transitioned into what is now Penske Media, using cash from the sale of Mail.com to help fund a budding digital portfolio that includes Hollywood Life, a celebrity news site run by former Us Weekly editor Bonnie Fuller; mobile gadget site BGR; and consumer entertainment sites MovieLine and TVLine.

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In his relatively short career, Penske has cultivated powerful connections. In 2008 his Mail.com received a $35-million investment led by financier Steven Rattner’s Quadrangle Group. Among Penske Media’s board of directors are former Federal Communications Commission Chairman Reed Hundt and Apple co-founder Steve Wozniak. Penske Media’s purchase of Variety received financial backing from Third Point, a hedge fund run by activist investor Dan Loeb.

With long, wavy hair and a casual style, Penske lives in a Bel-Air home purchased in 2004 for $1.975 million and has dated actresses Lara Flynn Boyle, Jordana Brewster and Gina Gershon, according to reports.

While Penske did not go into his family automotive business, he started an IndyCar racing team called Dragon Racing that has competed against a team owned by his father.

“Certainly, racing’s in the blood,” Jay Penske told the Associated Press in 2008. “This is something I’ve been dreaming of since I was a boy.”

He also owns a rare and collectible books store, Dragon Books, based in West Los Angeles. Penske’s passion for venerable publications may help explain why a young businessman who has staked his career on the digital world is now betting on a print brand that’s older than any of the studios or networks it covers.

“Anyone who knows me knows I have a great reverence for things that stand the test of time —- particularly great authors, journalists and books,” he said. “Variety is a brand that the entire PMC organization respects, and a publishing business that I have admired for most of my life.”

ben.fritz@latimes.com