RBI Magazines Back on the Block

In connection with its first half earnings report, London-based Reed Elsevier said it plans to divest nearly all of the magazines published under the U.S. division of Reed Business Information. The announcement, the company said, followed a portfolio review conducted by RBI Global CEO Keith Jones.

The company also said that RBI U.S. CEO Tad Smith has resigned. Executive vice president and CFO John Poulin was appointed acting CEO, reporting to Jones.

“This has been a difficult decision to reach as there are many strong brands here, with very experienced and professional teams running them, but we have concluded that they are less well suited to RBI’s strategy going forward,” Jones said in a statement. “We have had to contend with a far harsher advertising environment than any of us have experienced before and, in such a climate, we have to focus not just on innovation and efficiency, but also on ensuring that our portfolio is well-matched with our long-term ambitions.”

Among the magazines for sale are Broadcasting & Cable, Mutichannel News, Professional Builder, Publishers Weekly and Tradeshow Week.

Reed said it will retain its Reed Construction Data, RSMeans, Variety, MarketCast, LA411 and BuyerZone properties. The company put RBI on the block in February 2008.

"I think RBI U.S. is an attractive package, but with advertising in such sharp decline for all b-to-b media it will be harder to find a buyer than it would have been a year ago," DeSilva + Phillips managing partner Reed Phillips told FOLIO:. "Nevertheless, I think Reed Elsevier will be successful in selling the business this time around."

Profits Plunge

Reed reported operating profit through the first six months declined 29 percent to roughly $518.3 million. Revenues were up slightly to $5.57 billion.

RBI, however, saw adjusted operating profits plunge 43 percent to approximately $64 million during the period and revenues decline 17 percent to approximately $759.2 million. Reed Exhibitions reported an adjusted operating profit decline of 26 percent while revenues fell 22 percent.

During its earnings call, Reed CEO Ian Smith said the company will issue up to 9.9 percent of share capital to pay down the company’s $8.4 billion in debt—$4.17 billion of which is associated with its acquisition of risk analytics company ChoicePoint.

Reed had hoped to offset that debt by selling RBI, but dropped the sale late last year after bids were said to have fallen from approximately $2 billion to $1 billion.

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Post Comment / Discuss This Story - Info/Rules

Reed sale

Submitted by Anonymous on Thu, 07/30/2009 - 11:41.

It's been a long, slow, painful decline for the hard-wokijg staffs at their once-leading properties. This is mostly due to mismanagement,poor hires from EiC level on up, hubris, arrogance, and incompetance. But they doing the standard CYA using the all-purpose excuse of "the recession". We are not fooled, nor are investors.

Too bad...

Submitted by Anonymous on Thu, 07/30/2009 - 11:51.

Too bad those idiots that run the company couldn't fix things. Now the employees will suffer. I'm sure they won't get anywhere near the package Tad is going to get.

Business Bulimia

Submitted by Bruce on Thu, 07/30/2009 - 12:40.

What we have here is a classic case of business bulimia. In the 1990s, Reed binged, consuming as many other publishing companies (Cahners, Chilton, etc.) as it could. Now it's trying to purge because it doesn't look so hot on the economic runway. Trouble is, that strategy is almost as unhealthy for publishing companies as it is for supermodels.

Reed is a bit of a special

Submitted by Anonymous on Thu, 07/30/2009 - 12:59.

Reed is a bit of a special case: it is owned by a foreign corporation, not a NY VC firm, its problems are more home grown. When I look at RBI I see a bunch of legacy titles run by publishers who rarely are turned over, and managed by execs who care far more about playing politics than managing magazines. Ultimately, you can look at the UK execs who never really got how Cahners was successful and like to bring in strange choices for President (anybody remember Marc Teren? Anybody remember Folio's famous article "Why Marc Teren Matters")

What's the big deal?

Submitted by Anonymous on Thu, 07/30/2009 - 13:57.

I don't see what the big deal is. Companies buy and sell divisions all the time. There are companies that advertise on this site whose business is centered on the mergers and acquisitions of b2b media companies. Every company (not just publishing) is asking their people to do more with less, cutting staff, reorganizing, etc. So what makes this special in any way?

Blame The Dutch

Submitted by Marianne Paskowski on Thu, 07/30/2009 - 14:53.

The Dutch parent company never understood the business model and would not invest in the publications to evolve their presences on the Internet. A dime late and a dollar short. I left on my own steam four years ago and feel bad about the few pals who remain, most editors got the heave-ho, but not the sales staffs. Go figure

Death by Acquisition

Submitted by Anonymous on Thu, 07/30/2009 - 17:49.

Once-giant names in the publishing business like Chilton and Cahners are now only memories shared (in the case of Chilton) by occasional reunions still being held by incredibly dedicated and talented indivuals. All have moved on. What goes around...... Best of luck in your future endeavors, Tad....nice job....

Don't let the door hit you...

Submitted by Anonymous on Thu, 07/30/2009 - 18:34.

Nice to see Tad getting the boot after he canned so many hard-working people

Thin and Reedy!

Submitted by Anonymous on Thu, 07/30/2009 - 19:39.

I remember a time when Reed proposed to replace journalists with data entry folk who would simply trim press releases and send them off for layout before the magazines would be printed. The bottom line is this is what you get when things are run by generic MBa management and not those who understand the business.

No Big Surprise

Submitted by Anonymous on Thu, 07/30/2009 - 20:00.

Interesting comments here. The way the market is now it is no surprise that RBI is for sale again. For many of the RBI brands, getting sold could be a blessing. As for comments by Ms. Paskowski regarding editors and not sales folks being let go, that is simply not true. There are a lot of terrific former RBI sales people out there that did not leave on their own. Most of the pubs they have now are operating with a very small number of sales folks. A lot of these people have to cover very large areas of the country. The times they are a changing. Good luck to everyone there.

Where have all the CEOs or Divisional Presidents Gone

Submitted by Anonymous on Thu, 07/30/2009 - 22:51.

This is the end result when there is no vision or legitimate leadership coming out of the corner office - whether the office is in NY, Chicago, Mass, London or Amsterdam.

RBI

Submitted by mediawiseguy on Fri, 07/31/2009 - 09:38.

Dismissive, out of touch management. They never understood the correct economic model, and refused to face the value of journalism to the success of their publications. They had a deaf ear to the rank and file, and worse, inserted just terrible, ill suited leadership. Good Riddance.

Parts is Parts

Submitted by Anonymous on Fri, 07/31/2009 - 13:38.

Any opinions on whether the properties will be sold as a block or in parts? Reed wants the former of course.

Class Warefare

Submitted by Anonymous on Fri, 07/31/2009 - 16:49.

When Reed bought the old ZD Travel division from Murdoch our publisher (a VP) was told by the brits that offical Reed policy was that only the people above her were of consideration, staff was decidedly not - talk about class systems. They hired a short-lived HR bully whose sole job was to make a huge chart to explain, in a long, long, meeting with us that there would only be "Merit Raises" if you were deemed worthy (none were given except for publishers pets). Then all of us were downsized out of the company - we had been on our books too long and had too many benefits left over from ZD days. Reed was a monster, Bill Ziff and Rupert Murdoch were great.

Where There's Death They Look Better?

Submitted by Anonymous on Fri, 07/31/2009 - 19:53.

No matter how greedy and mean the big boys look when they are alive, that is just business. Let them die and everyone is happy. Good riddance! Keep the good part(s) of the business and learn from mistakes. Wake up Reed - Drop the Greed....

Who will turn out the lights?

Submitted by Anonymous on Mon, 08/03/2009 - 14:41.

Some pubs only have an EiC and a staff writing editor or two, relying more and more on freelancers. With such cutting back, no wonder Penton is eating their lunch in areas where they compete.

Add a G in from of the R...

Submitted by Anonymous on Thu, 08/06/2009 - 17:29.

Reed had owned Cahners for many years prior to changing the Cahners name and magazine mentality. Too bad when they did change the name they didn't add the G and spell the new name correctly: Greed Business Information.

nice post...

Submitted by Anonymous on Fri, 08/07/2009 - 07:56.

I think it is safe to say that whoever created the last post is not an editor... "Add a G in from of the R..." :) If you're going to talk smack at least proof read it. Is it amateur hour?

CEO Tad Smith has resigned.

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