Three years ago, I bought a magazine as a passion project.

Since then, I've fallen in love with the magazine business, acquired other brands, and grown into a $50M side hustle (18% EBITDA margins today).

I believe it could become a billion-dollar business by 2030 through a combination of organic growth and M&A, w/ 30% EBITDA margins.

Why am I passionate about magazines?

1/ Before the internet, magazines were amazing businesses. They have a great connection with their audiences and a fantastic way for advertisers to reach a special interest.

Magazines could monetize through recurring subscriptions, newsstand, and advertising.

2/

All signs point to a freight market recovery.

Here is what the data tells us:

Tender rejections are above 5%. Tender rejections measure the percentage of truckloads rejected. Carriers reject loads if they have better options. Capacity is coming back in balance. 1/ Truckload spot rates have hit a 6 month high.

Usually, truckload rates drop below Q4 rates, but we are seeing the opposite. 2/

The freight market is experiencing a severe recession and bloodbath.

Here is a round-up of the doom and gloom headlines that have occurred in one of the worst downturns in freight market history.

Full articles and ongoing coverage on FreightWaves.

1/🧵 30,000 employees out of work when trucking firm Yellow shuttered 2/

The new titles we acquired from Bonnier have so much potential. I can't wait to get started on investing in the content and driving new levels of engagement from the audiences.

Each brand is the leader in its category. Here is what I love about each one. 🧵 Boating is "America's Favorite Past Time"

Boating Magazine is the largest powerboat magazine.

There are 280,000 powerboats sold each year. This audience is massive, with lots of opportunity in video. 2/

The freight market bottomed on May 14th. Since then conditions have continued to improve.

The outbound tender rejection index (OTRI) measures the balance of supply/demand in trucking, by measuring the % of truckloads that are rejected.

This data comes from the "tender" messages between shippers and motor carriers. Tender messages are requests for trucks in the contract freight market.

A rejection tells us that a carrier is telling a shipper that they have other options for their trucks.

Higher rejection rates mean that the balance of supply/demand is swinging in favor of trucking fleets. Tender rejections are also signaling a stronger YoY quarter for motor carriers. Tender rejections are on pace to surpass last year's number and should do so by the end of Q3.

2/

Trucking is one of the most fragmented industries on the planet.

Growing up, I was told that there would be massive consolidation in the trucking industry. The opposite has happened. Why?

This chart shows the number of individual trucking fleet companies. 1/ Before deregulation in 1980, trucking rates were fixed and approved by the Federal government.

The Feds deregulated trucking and other forms of transport (airlines) and it created an explosion in the number of trucking fleets. Now, anyone could start a trucking company. 2/

Freight market conditions are improving.

Tender rejections are the highest levels in 6 months at 4%. Tender rejection measures the percentage of truckloads that are turned down by trucking firms in the market.

It is the best way to measure supply/demand
1/ Volumes are up 12% in the past 6 months. Increasing throughout the year (the big dips are holidays, btw). 2/

June is normally one of the best months of the year in trucking and sets the tone for the rest of the year.

Unfortunately, its not providing much of a relief for struggling carriers. Trucking spot rates (net of fuel) are now lower than 2019. 1/ On a cash flow basis, the story for carriers operating in the spot market things are worse. Operating costs (net of fuel) are up at least $.30/mile since 2019. Almost every mile ran in the spot market is for a loss. 2/

A Taylor Swift concert is a combination of music concert and broadway play costing over $100M.

Ever wonder what the logistics is for the one of the most expensive concert tours in history? 1/ The logistics and transport costs alone are more than $30M for the tour. 2/

The Spring bounce is finally here in the trucking market, with volumes clearly showing strength.

Will Q1 be the bottom of the freight market? It largely depends on whether the consumer holds up. 1/ twitter.com/i/web/status/1… Tender rejections, on the other hand, continue to prod along the bottom. There is too much capacity in the market and carriers are taking almost anything. 2/

The freight market is teetering on a pretty big development. Tender volumes in the truckload market are on the verge of crossing below 2019 levels. There has been zero sign of any firming in the market as we head into the start of the Spring shipping season. 1/ Tender rejections continue to bounce along the all-time bottom, as carriers take almost any load offered. 2/

FLYING has experienced a 4x increase in new subscriptions since we moved back to a monthly cadence.

We are surprised and encouraged by the momentum. A year ago, FLYING was losing money on every new subscriber, but we changed the model and now it's very profitable. 🧵 I bought the magazine 18 months ago. The magazine squeezed out a small profit, but it wasn't much. To cut costs, the previous owner made the magazine smaller in page count and used much cheaper paper.

The quality suffered. 2/

Trucking spot rates (7-day m-avg) net fuel dropped $.09 this week from $2.17 to $2.08, one of the largest weekly drops, while fuel increased by $.36/gallon ($.06/mi). Surging fuel costs likely limit what a carrier can get for linehaul since spot is always quoted in gross. 1/ Conditions in the trucking spot market continue to deteriorate. We should see rates accelerate this time of year, not fall. The rate of decline is more troubling, as the pace of drop accelerated ($.05, $.07, $.06 in the prior 3 weeks). 2/

The listing clients of Business Air & Aviator's Hotline, and Aviator's Properties are about to see what a content-orientated publisher with millions of pageviews, high domain rank, and nearly a million social followers can do that no other market can. 1/ flyingmag.com/flying-media-g… If you are selling something - reaching the top of the funnel is very important. High-quality media publishers have a killer advantage over incumbent listing marketplaces - they rank high on search, social, and the algos prefer them. 2/

In freight tech - the companies most vulnerable are those that service small trucking fleets. Churn is going to accelerate and bad debt writeoffs are a huge risk. Digital brokerages are not included in this - they are experiencing margin expansion and collect from shippers. 1/

https://twitter.com/DavidSacks/status/1522745450347958272

I once ran a fuel card business that serviced small trucking fleets (sold to USB) - we had a lot of bad debt and fraud during downturns. Onetime a fleet filed bankruptcy on a Thurs., failed to notify us - and over the weekend ran up a $40k fuel bill. We got the notice on Mon. 2/

We purchased Business Air, Aviator’s Hotline, Aviation Properties and many more titles not because they are the premier titles in the space - 1/ flyingmag.com/flying-media-g… But because we believe it gives us a foundation to build a premier marketplace, an audience and advertising customer base to launch a high-frequency B2B aviation market intelligence business similar to FreightWaves, but for aviation. 2/

The recent surge in fuel has masked the trucking spot rate decline. I had data science strip fuel completely out of spot rate data (historical/current). This assumes that there isn't a fuel cost basis in spot. This can give us a good baseline on linehaul revenue for carriers. 1/ The rate assessments are daily and based on the booking date. The intermittent increases are on weekends. Truckload linehaul spot rates have been decreasing by about $.01/mile per day since the start of the year. Currently, the linehaul-only portion is $2.00/mile (no fuel). 2/

Unfortunately, market conditions mean that some trucking companies won't make it. The thing that ultimately kills the carrier isn't the only reason - it is usually driver issues, fuel costs, and poor operations mgmt. So far this year, we've covered a few... List (so far) 1/ 66 trucks. Postal carrier. Fuel, too many unseated trucks, loss of USPS contract. freightwaves.com/news/missouri-…

Lots of folks have DM'd me about the digital freight brokerages and whether I thought they would survive the correction - just a reminder - the digital brokerages are 3PLs - which means their success is driven by the fundamentals of the freight market and not SaaS. 1/ The spread between contract and spot is at record highs. There has never been as wide of a gap between the two freight markets. This is a good thing for most freight brokerages. Their P/Ls should be doing remarkably well with expanding margins. 2/

We saw a short-term reprieve in the freight market last week, but we are now seeing downward signals across the board, yet again. Contracted volumes continue down. 1/ Trucking daily spot rates are also showing real weakness this week (these spot rates include fuel - so the cash flow impact to small carriers is even worse than the index suggests). Daily shows more volatility. Weekly chart next. 2/

We are starting to see the freight market stabilize. Contracted freight volumes have stopped declining over the past two weeks. This is a positive sign for motor carriers. 1/ The decline in contracted freight volumes took about 7 weeks and bottomed out around Easter. Tender rejections are still declining, but the rate of decline is less than before. (Rejections are a very reliable indicator of market direction). 2/