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Struggling "Every Day With Rachael Ray" Drives 2Q Losses for Reader's Digest

Former jewel-in-crown saw 16.8 percent ad-page drop through August.



Matt Kinsman By Matt Kinsman
08/15/2011


Every Day With Rachael Ray has a new senior staff and redesign but "unexpected advertising declines" at the title contributed to a 6.2 percent drop in revenue to $409.4 million for RDA Holding Corp. in the second quarter of 2011. Consolidated EBITDA plummeted 32.3 percent to $52.2 million due to increased marketing spending and advertising losses at Every Day with Rachael Ray.

Revenue for RDA's U.S. business in the second quarter was relatively flat at $176.7 million (compared to $177.1 million in the same period last year), while operating profit fell 15.1 percent to $33.1 million, primarily due to a "decrease in advertising at Rachel Ray and higher agent commissions," according to RDA financials.

Once a top performer for RDA on the print side, Every Day With Rachael Ray has seen advertising plummet recently. From January through August 2011, ad pages in the magazine fell 16.8 percent, according to FOLIO: sister site minonline. Meanwhile, long-struggling sister title Reader's Digest is seeing improvement, with ad pages up 4.4 percent in the first six months of 2011, according to Publishers Information Bureau.

The Reader's Digest Community (including Reader's Digest) saw revenue increase 4.9 percent to $67.9 million, while the Lifestyle Communities (which includes Every Day with Rachael Ray) saw revenue drop 3.1 percent to $108.8 million.

Every Day With Rachael Ray has revamped its staff, hiring former Prevention editor Liz Vaccariello as editor-in-chief last fall and naming former Bon Appetit publisher Paul Jowdy as publisher in May. In June, RDA Community president Susanne Grimes left, replaced by Reader's Digest publisher Dan Lagani, who took over the new position of RDA president, North America. 

In March, TV personality Rachael Ray inked an agreement with Demand Media to create co-branded content and develop new talent for Demand Media's eHow Food Channel.

Last month, The Wall Street Journal reported that Reader's Digest Association is on the block, seeking a price of around $1 billion.

 

Matt Kinsman By Matt Kinsman
08/15/2011







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