2010: The Year in Review
Precipitous Declines. Bankruptcies. And Some Intriguing New Directions.
• The new year gets off to a dismal start as Publishers Information Bureau reports that consumer-magazine ad pages collapsed in 2009. The decline was a massive 25 percent drop overall. The biggest winners were People Style Watch (up 24.4 percent), OK! (up 20.7) and Saveur (up 12.8).
• e5 Global Media, the company that acquired eight media/entertainment brands from Nielsen Business Media, announces that Richard D. Beckman will become CEO. e5 was founded in the acquisition of The Hollywood Reporter, Billboard and six other media properties from Nielsen Business Media.
• In the first of the year’s many Chapter 11-related stories, Morris Publishing Group says it plans to file for a prepackaged plan of reorganization with the U.S. Bankruptcy Court. Morris owns a portfolio of nearly 20 city magazines as well as 13 daily newspapers.
• A U.S. Bankruptcy Court approves the Reader’s Digest Association’s pre-packaged restructuring plan, clearing the way for the publisher to emerge from bankruptcy protection by January 31.
• The march of consolidation among publication printers takes its most spectacular step forward yet as the number-three printer, Quad Graphics, acquires the number-two printer, Worldcolor, for an estimated $1.4 billion. Worldcolor was formerly Quebecor World.
• Future revenue models for publishers dominate the discussion at the DeSilva + Phillips Dealmakers Summit 2010, where publishers and investors debated where revenue growth will come from. Investors want to see paid-content models while publishers express their doubts. “I would be scared to invest in creating content if the only way to get your money back is through banner ads,” says one panelist. Nearly 12 months later, the answers are no closer to being clear.
• Bankruptcy rears its ugly head again, as Penton Media announces it plans to make a “pre-packaged” filing under Chapter 11. Penton CEO Sharon Rowlands called the restructuring a “positive, strategic step” for Penton.
• In the latest of an ongoing sell-off, Reed Business Information divests certain electronics and packaging magazines to Canon Communications. This marks the second divestiture RBI has pulled off since announcing in July 2009 that it put the majority of its U.S.-based trade magazines back on the block. In December, it sold three titles to NewBay Media.
• Enthusiast publisher Active Interest Media acquires several equine-related magazines and Web sites from Source Interlink Media and from Horse Media Group.
• Time Inc., Condé Nast, Hearst, Meredith Corp. and Wenner Media jointly announced a campaign called “Magazines, The Power of Print,” which will span print and online. Why ads touting the power of magazines would need to run in magazines, where readers presumably are already among the believers, was not disclosed.
• In a repeat of the depressing news in January from the consumer side of the magazine business, advertising pages for trade magazines decline 28.6 percent compared to 2008, according to American Business Media.
• Reed Business Information sells off another big chunk of its once-giant trade magazine business. Worth magazine publisher Sandow Media announces it has acquired eight RBI magazines.
• The board of governors of the United States Postal Service approves management’s request to move forward with a five-day delivery schedule, which would effectively eliminate delivery and collections on Saturdays.
• Advanstar Communications—the trade publisher that reduced its debt by $385 million last fall—strikes an agreement to outsource production-related functions for magazines and directories. The agreement eliminated approximately 100 employees at its Duluth, Minnesota, facility.
• In a Coda to one of the most spectacular flameouts in recent years, DealFlow Media Acquisitions Inc., acquires certain assets of Doubledown Media.
• After Reed Elsevier announced on April 16 that it was shutting down 23 titles published by Reed Business Information, it was expected that at least some of those would be snapped back up by former employees. And that’s just happens when Brian Ceraolo, a publisher, forms a new company, Peerless Media and reaches an agreement to acquire four Supply Chain Group brands.
• Once high-flying regional magazine publisher Modern Luxury Media puts itself on the block in hopes either of being acquired or finding a new equity partner. They find a buyer in Atlanta-based Dickey Publishing, but former Modern Luxury CEO Michael Kong sues, claiming breach of contract.
• The U.S. Government Accountability Office has added to the pile of dire assessments of the state of the United States Postal Service, characterizing its business model as “not viable.” In the next decade, the USPS projects a $238 billion loss.
• Two more management-led buyouts of Reed Business Information brands are announced as newly-formed CFE Media acquires three titles from RBI. Dan Hogan, former publisher of HOTELS, buys that title as well as Foodservice Equipment and Supplies.
• On the heels of a terrible 2009, and two days after announcing that it was putting Newsweek up for auction, the Washington Post Co. says the magazine lost $2.3 million through the first quarter of 2010, which ended April 4.
• In the fourth announced acquisition of folded RBI titles by their former management, Reed Business Information passes 13 shuttered print and online properties to MB Media, which is headed by a pair of the group’s ex-publishers.
• Amid reports that new owner e5 Global Media is looking to transition The Hollywood Reporter from a weekday trade paper into a glossy weekly, the company announces that it has named former Us Weekly editor Janice Min as editorial director.
• Middle market media private-equity firm Veronis Suhler Stevenson loses its co-founder, John J. Veronis, who withdraws from the partnership. Veronis and fellow co-founder John Suhler formed the firm in 1981. Suhler continues to serve as the firm’s founding partner and president and Jeffery T. Stevenson continues as the firm’s managing partner.
• Network Communications Inc. defaults on an interest payment and enters negotiations with its stakeholders.
• Hearst Magazines agrees to acquire iCrossing, an independent digital marketing service provider, for a whopping $325 million.
• Enthusiast publisher and media company F+W Media emerges as one more company among dozens that need to restructure their debt. The company says it has reached an agreement with its lenders to eliminate more than 50 percent of its debt.
• Ex-Forbes.com CEO Jim Spanfeller’s startup company, Spanfeller Media Group, says it is looking to lock up a financing round that is reportedly worth $2 million. Spanfeller Media Group’s first project is to launch a Web site about food.
• Hearst Magazines announces a new management structure. Longtime president Cathie Black is named chairman. Replacing her as president will be David Carey, who moves over from his group president post at Condé Nast. In November, controversy erupts over Black being named chancellor of New York City Schools.
• The debut of Wired’s iPad app is heralded as a new dawn for magazine publishers when the app generates 100,000 downloads in June, outselling print single copies (77,443) that month. However, by August, Wired’s iPad app generated 28,000 downloads, compared to 91,000 single copy sales of the magazine.
• After renegotiating its debt and avoiding bankruptcy in early 2009, American Media Inc. undergoes another financial restructuring that it says cuts its debt by a further $200 million. However, in November, AMI undergoes a voluntary pre-packed Chapter 11 filing. “I have been a CEO for over a decade and this is the best capital structure I’ve had to work with,” says CEO David Pecker.
• Nearly 25 percent of the subscriptions sold by publishers in 2010 will be generated from the Web, the MPA says. In 2006, the Web generated only 13 percent of subscription sales.
• American Business Media’s incoming CEO, Clark Pettit, brings fresh leadership to the association for the first time in 16 years. ABM is betting that Pettit brings both a fresh perspective and some hard-won lessons as a former digital media executive with consumer-facing companies such as EMI Music, Ascent Media Group and Accenture Digital Media Services.
• After a tumultuous 2009, the first half of 2010 shapes up as more positive. According to PIB, a whopping 130 titles increased ad pages during the second quarter. The three-month period marked the first time in nine quarters that consumer magazines reported gains in both rate card-reported revenue and pages.
• Hugh Hefner, the man who launched Playboy magazine in the early fifties, makes a formal offer to take parent company Playboy Enterprises private. Meanwhile, Marc Bell, CEO of Penthouse magazine parent FriendFinder Networks, tells FOLIO: that the company is planning to place a bid to acquire Playboy magazine as well.
• The Affordable Mail Alliance, a coalition of hundreds of businesses including magazine publishers, officially submits a motion to the Postal Regulatory Commission asking for dismissal of the United States Postal Services’ proposed exigent rate case, which could force rates for periodicals mailers up 8 percent.
• The Washington Post Co. announces that Sidney Harman, the founder of audio company Harman International, has acquired Newsweek magazine. “Newsweek is a national treasure,” Harman says.
• Discover Magazine, which went on the block in May, is acquired by Waukesha, Wisconsin-based Kalmbach Publishing.
• Johnson Publishing’s Linda Johnson Rice—whose father founded the company in 1945—steps down as CEO while remaining chairman. Former White House social secretary Desiree Rogers is named CEO.
• The Week remains a bright spot in consumer magazine publishing. It’s one of the only magazines to continuously increase its advertising pages through much of the economic recession. President Steven Kotok says the print magazine is gearing up to raise its rate base again in 2011 from 500,000 to 510,000.
• Time Inc. parent Time Warner officially announces that former Meredith Corp. National Media Group president Jack Griffin will take over as CEO of the magazine publishing unit, replacing longtime chairman and CEO Ann Moore.
• Longtime magazine industry figures Mark Edmiston and Roger Black form Nomad Editions, a subscription-based mobile content publisher, which emphasizes subscriptions over advertising revenue.
• Bill Holiber, longtime CEO of U.S. News & World Report, takes over in that role at the New York Daily News. Holiber continues in his role at U.S. News.
• Summer 2009’s “Save Paste” campaign, it turns out, was more of a band-aid than a complete success. Editor Josh Jackson announces that the music magazine is suspending its print publication.
• Magazine printer Conley Printing is purchased by J.B. Kenehan, a sheetfed and web printer of digests, catalogs, inserts, books and other special projects.
• After several delays, Emmis Communications Corp. announces that the offer by its CEO, Jeff Smulyan, to buy the company and take it private has been terminated.
• In an expansive effort that will eventually see the majority of the company’s more than 100 Web sites relaunched, Penton Media unveils a re-engineering of its nine Agricultural Group sites.
• In the largest acquisition the b-to-b publishing world has seen in months, UBM announces that it has agreed to acquire Charlie McCurdy’s events and magazine publisher Canon Communications for $287 million.
• The b-to-b M&A market seems to be heating up. Following recent deals involving Access Intelligence and Canon Communications, Northstar Travel Media acquires ProMedia.travel.
• Almost four months after the USPS proposed an exigent rate case that would force rates for periodicals mailers up 8 percent and raise First-Class mail stamps to 46 cents, the Postal Regulatory Commission unanimously votes to deny the proposal.
• Roughly 400 top executives from all corners of the magazine publishing industry turn out for MPA’s 2010 American Magazine Conference. It marks the event’s return after a year off in 2009.
• Michael Wolff, Newser founder and Vanity Fair columnist, is named editorial director of Adweek Media, a group of trade magazines including Adweek, Mediaweek and Brandweek, now owned by e5 Global Media.
• Rodale settles an investigation brought by the Florida attorney general’s office that alleged the publisher billed customers for products they never received or ordered. In the settlement Rodale will refund Florida customers who participated in the offers in question and pay up to $1.3 million in attorney’s fees associated with the six-year-old investigation.
• Bob Guccione Sr., who founded Penthouse magazine in 1965, dies in Texas due to complications related to cancer. He was 79.
• Two new publishing surveys predict rapid revenue growth for mobile apps in the next few years.
The second annual “Going Mobile” survey from the Audit Bureau of Circulations and ABC Interactive, indicates that 65 percent of respondents say they believe digital delivery is important to their strategic future, up from 55 percent last year. Meanwhile, a report from mobile ad network Millennial Media, e-media conference producer DIGIDAY and financial services company Stifel Nicolaus, finds that 31 percent of publishers surveyed expect their applications to increase 100 percent or more in 2011.
• U.S. News CEO Bill Holiber and editor Brian Kelly say the publication will cease printing a regular monthly magazine for subscribers.
• McGraw-Hill Construction rolls out a restructuring that results in an undisclosed number of layoffs throughout the organization.
• The on-again, off-again Daily Beast-Newsweek marriage is on again. After negotiations between the magazine’s new owner, Sidney Harman, and Barry Diller, chairman of IAC and owner of Tina Brown’s The Daily Beast, broke off, it is announced that the parties have quietly come to terms on a 50/50 joint venture.
• Forbes Media names Mike Perlis, a former venture capital executive and former CEO of Ziff-Davis Media, as president and CEO.
• Network Communications Inc. strikes an agreement with the majority of its shareholders over a balance sheet restructuring to reduce the company’s outstanding indebtedness.
• American Business Media reports total revenue of $3.2 million for fiscal 2010 (ended June 30), down 41.8 percent from total revenue of $5.5 million in 2009. However, the association says several former members returned to the fold over the past year.
• After spending nearly four decades headquartered in the historic building located at 820 S. Michigan in Chicago, Johnson Publishing sells the building to Columbia College Chicago. The Ebony and Jet publisher says the sale is part of the company’s strategy for reducing costs.
• Two of the publishing industry’s more prominent suppliers, the fulfillment and database management company ARGI, and the teleservices firm iPacesetters, combine. The new company, which keeps the name iPacesetters, will have over 1,000 employees and be based in Montvale, New Jersey.
• The economy continues to take a toll on former b-to-b darling Hanley Wood. A little more than a year after being elevated to president, Peter Goldstone is let go from the housing and construction publisher.
• There were just eight domestic tradeshow acquisitions in 2010 according to a report from CS Corporate Solutions. The majority of deals were small transactions for a single event, with Canon Communication’s $287 million sale to United Business Media the largest event-related deal of the year. The report says almost all trade show M&A revolved around strategic buyers snapping up smaller competitors with bolt-on acquisitions.
• After weeks of rumors, Penton Media announces it is buying Lebhar-Friedman’s flagship title, Nation’s Restaurant News. Lebhar Friedman also sells Dowden Health Media to private equity firm High Road Capital partners, paying off its debt to GE Capital, which financed L-F’s estimated $40 million acquisition of Dowden in 2005.
• Magazine database MediaFinder.com says there were 193 new magazine launches in 2010, while 176 folded. That’s down from 596 closures in 2009.
• UBM, having acquired Canon Communications earlier in the year, outlines a restructuring. Canon veteran Ron Wall, one of the better-known executives in b-to-b media, leaves the company.
• Randall Rothenberg is named to the newly created position of EVP, chief digital officer for Time Inc.
• The Atlantic ends the year strong, boasting the most ad pages of any issue in its 153-year history in November, turning its first profit in decades, and claiming year-over-year double-digit revenue growth in digital, events and yes, even print.
• Just two months after he “retired” as president of publishing at National Geographic, John Q. Griffin is named president of Time Inc.’s new News Group, overseeing TIME, Fortune and Money.
• Consumer magazine M&A trailed b-to-b deals significantly in 2010 but wheeling and dealing in December preps the way for some colossal deals in 2011. Hearst Magazines president David Carey confirms that the company is in talks to buy 102 magazine editions and 50 Web sites from Hachette. Meanwhile, Meredith CEO Stephen Lacy tells says he’s looking to scale up over the next 12 to 18 months. CNBC reports Meredith is looking at Rodale titles such as Men’s Health. Lacy denies it. Everyone else rolls their eyes.