In this photo illustration, a Verizon Media logo seen displayed on a smartphone.
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Apollo Global Management is preparing to close its $5 billion acquisition of Verizon Media on Sept. 1, and the private equity firm is already causing consternation among existing executives at the company soon to be known as Yahoo.
Apollo hasn't informed Verizon Media leadership, including Chief Executive Guru Gowrappan, of their new roles at the company once the private equity firm takes over, according to people familiar with the matter. The lack of information has irritated current Verizon employees, who don't know if they have a long-term future with the company, said the people, who asked not to be named because the discussions are private.
Private-equity takeovers frequently lead to significant leadership changes. Strategic shifts are often the core rationale for transactions, and Verizon Media, which will be formally renamed Yahoo upon closing, likely won't be an exception. Apollo has been working with Egon Zehnder, an executive search firm, to seek out new leaders. That search includes former Bleacher Report CEO Howard Mittman for a "head of sports" role, two of the people said. Mittman, who left Bleacher Report last year amid concerns over a lack of diversity at the company, declined to comment. Mittman isn't expected to be chosen for a role with the company, according to a person familiar with Apollo's thinking.
Apollo's failure to communicate future roles for existing leadership has clashed with the private equity firm's public statement that it's committed to working with the management team in place.
"We have enormous respect and admiration for the great work and progress that the entire organization has made over the last several years, and we look forward to working with Guru, his talented team, and our partners at Verizon to accelerate Yahoo's growth in its next chapter," said Apollo private equity partner Reed Rayman in a statement when the deal was announced in May.
Verizon will own a 10% stake in the new Yahoo and struck the deal with the assumption Gowrappan and his team will continue to run the company, two of the people said. While Apollo has incentive to wait until after the deal closes to begin strategic planning to avoid gun-jumping fines, its lack of clarity and talks with outsiders for potential roles at the company has multiple Verizon Media executives worried their tenures at the firm will be short, the people said.
Verizon and Apollo spokespeople declined to comment.
Apollo's plan is to maximize Yahoo's value by preparing different units of the business for eventual sales or mergers, such as Sports, Finance and advertising technology, two of the people said. Several special purpose acquisition vehicles, or SPACs, have already held preliminary conversations with Apollo to show interest in parts of the business, they said.
Verizon Media is a combination of Yahoo, AOL, ad tech and a few small media businesses. It had owned HuffPost before selling it to Buzzfeed in a deal announced last year. The new Yahoo has about 10,000 employees. Yahoo Mail still gets about 200 million monthly global unique visitors. Yahoo.com is still one of the most viewed websites in the world, according to Alexa Internet, a web traffic analysis company.
Troy Young, the former president of Hearst's magazine division, who resigned last year after The New York Times reported on his history of sexist remarks in the workplace, has been a lead consultant for Apollo on the deal and Yahoo's future prospects, four of the people said. He lists advisor to Apollo Global on his LinkedIn page since March 2021.
Business Insider first reported Tuesday on Young's role with Yahoo, adding that it has stirred speculation he may be in line for a larger role at the company.
Young isn't a candidate to be Yahoo's new CEO if Gowrappan eventually departs, two of the people said. Still, his consistent presence at internal meetings since the deal's announcement has made some Verizon Media executives assume he's in line for a major strategic role at the new company, even if it's not in an operational executive capacity, two of the people said. Young didn't immediately respond for comment.