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Bill Mickey

Welcome to the ABM Spin Zone

Bill Mickey B2B - 04/09/2008-10:34 AM

Much like Bobby McFerrin's chirpy ode to blissful ignorance, ABM recently attempted to put a happy spin on its analysis of its own BIN report.

Essentially, both print ad revenue and pages ended 2007 down—not by a lot, 2 percent for revenue and 3.35 percent for pages, but down. And this after a flat 2006 in revenue and a slight decline in pages.

Now these kinds of things can be looked at from any number of angles. And no one, especially an association representing an entire industry, wants to be the bearer of bad news, much less voluntarily even touch a doomy outlook. For example, ABM notes that 13 of the 21 categories tracked showed increases in respective revenues. Fair enough. But then their analysis of the report takes it one step too far.

The computing, software, telecom category has been a freefall for the last three years, declining almost 30 percent in revenues since 2005—17.59 percent alone in 2007, according to the BIN reports.

Yet here's what ABM had to say in its analysis of the 2007 report entitled "Business-to-Business Media Experiences a Robust 2007":

"In fact, ignoring the ‘Computing, Software, Telecomm' category would result in an overall 0% change over 2006."

I love that! So why not just keep going with the other two top declining categories, business, advertising & marketing (-10.7 percent) and travel, business conventions & meetings (-6.95 percent)? I bet ignoring those as well would rocket 2007 to "robust" indeed.

Bill Mickey

Time Inc.’s Environmental Impact

Bill Mickey Consumer - 03/31/2008-14:50 PM

When you're a $5 billion publisher like Time Inc., you can afford to hire someone like David Refkin as director of sustainable development. Indeed, the company has been studying the impact of its entire production process. At the MPA's 2008 Retail Conference in Tampa, Florida today, Refkin discussed Time Inc.'s efforts in environmental sustainability, offering up figures that give some insight into the company's impact:

  • The company buys 500,000 tons of paper each year from 53 mills.
  • 75 percent of the company's fiber meets certified sustainable forestry (CSF) standards, up 25 percent from 2002.
  • The carbon footprint of producing one issue of Time is equal to 160 people flying an airplane around the globe.

Refkin also said that only one out of six magazines in the home get recycled, and that Time Inc. has partnered with Verso Paper to increase consumer awareness, spending $5 million on outdoor advertising and another $6 million in magazines to push recyclable messaging. To learn more about the publisher's efforts, keep an eye out for its sustainability report due out in April.

Bill Mickey

Meredith's Media-Neutral Selling

Bill Mickey FPS 2008 - 02/21/2008-17:20 PM

MIAMI—During his morning keynote, Meredith Publishing Group president Jack Griffin explained the company's approach to selling via its M360º group. "It's a group set up to be media neutral. We're not selling a particular asset, but creating solutions for our advertising customers."

It's an approach that focuses entirely on selling integrated packages, no longer simply selling customers on a single media—print display advertising, for example. It's also one that other publishers are adopting. CMP has realigned its marketing services team to be customer-facing by region, creating customized packages that rarely come straight off a menu. "We have teams focused in the customer client regions, in the sales regions if you will, working with different customers to do that integration across different platforms—print, online, events, or deeper into a specific platform," says Scott Vaughan, vice president of marketing and research.

"Customers don't necessarily say to you ‘I want to advertise,'" added Elliot Kass, managing director, client content services. "They just say, ‘This is what I'm faced with and if you can help me figure out a way to solve this problem then I'm very interested.'"

Bill Mickey

Penton Begins Search for New CFO

Bill Mickey B2B - 02/13/2008-15:38 PM

Earlier this week, Eric Lundberg, Penton's CFO of a year, announced that he was returning to ALM. On Tuesday, Penton head John French passed along this note:

-----Original Message-----
From: French, John
Sent: Tuesday, February 12, 2008 9:07 AM
To: DL-Penton Global; DL-Prism Global
Subject: Eric Lundberg's Departure
Importance: High

Hello Everyone,

Today, I am announcing that Eric Lundberg, Chief Financial Officer, has decided to leave the company. Eric will be returning to ALM as Chief Financial Officer and senior vice president.

Eric joined Penton a little more than a year ago and his contributions have been significant. He led the company through a very challenging integration effort and much of our present and future success is due primarily to his leadership. Bringing two large organizations together was a complex undertaking and very few people would have been able to accomplish this with such tremendous success.

On a personal note, I have enjoyed working with Eric throughout this past year and greatly appreciate his hard work and dedication. We are working together during a brief transition period. We have already begun the search for a new Chief Financial Officer and will inform you when we have completed that process.

Please join me in wishing Eric well in all his future endeavors.



Bill Mickey

Are E-Media Companies—With Revenue—More Valuable?

Bill Mickey M and A and Finance - 01/28/2008-17:15 PM

This post by FOLIO: editor Dylan Stableford on Glam Media and its CEO Samir Arora makes two insights into e-media M&A:

"If traditional publishers continue to miss the site network strategy, as Arora says, I'd expect that line of ‘approachers' to start looking like the runway at JFK, probably sooner than later. And when it does, it'll be a fun exercise in valuation."

Arora says he's already getting a significant amount of interest from tire-kickers and the supposition that the crowd of curious buyers will soon resemble a packed runway is dead on. Media bankers DeSilva + Phillips have already labeled 2007 as the "year of the digital niche acquisition," and this year is shaping up to be more of the same.

What's more, Arora is actually generating revenues. "Our internal goal has been to drive the revenue growth rate faster than any other media company on the Internet--traditional or nontraditional," Arora told me in our original interview.

Whether or not Glam's revenues are developing at a scale or speed buyers are looking for, that model is something both potential strategic and financial buyers will no doubt appreciate, given the smokey back room approach to early-stage e-media valuations.

With the credit markets as tight as they are these days, buyers may not be as willing to pay whatever it takes to win a bid. And in a deal for a property that has proven financials, a bidder pool would likely expand to include even the more conservative buyers who normally shy away from early-stage Internet companies that have no measurables to pin a valuation on beyond site traffic, demographics, an executive team still in their 20s, and a great idea.

Bill Mickey

FCC's Copps Worried About Big Media Private Equity Deals

Bill Mickey M and A and Finance - 01/18/2008-11:32 AM

Smart Money picked up a Dow Jones story reporting that Michael Copps, a Democrat and member of the Federal Communications Commission, is voicing a growing concern over the big private equity deals—particularly in media. Seems he's a bit skittish over the volume and size of these deals over the last year, especially in light of the subprime fallout and a grim economic outlook for the coming year.

"There's been a whole raft (of acquisitions) involving private equity in recent years and I think we need to ask questions about them," said Copps, who also believes that ownership structures are becoming unclear, which apparently makes it tougher for the FCC to crack down on companies when something goes wrong.

FCC chairman and Republican Kevin Martin so far is downplaying Copps' concerns.

Nevertheless, Copps is exposing what might be a tricky year for over-leveraged deals, and a situation that might work its way into all sorts of corners in the private equity deal landscape.

Bill Mickey

Former Hachette Digital Media Head Looking to Invest

Bill Mickey emedia and Technology - 01/17/2008-17:29 PM

Hachette Filipacchi Media's announcement this morning of its appointment of Todd Anderman as SVP, digital media seems to have elicited a number of queries into where the company's previous head of digital, Marta Wohrle, ended up. Wohrle joined the company a couple years ago to build out the digital media group, first as a consultant, then fulltime. She made our FOLIO: 40 last year for essentially creating Hachette's e-media business from scratch.

Turns out Wohrle has been busy developing her own sites, and plans to do some investing herself. Here, via Hachette spokeswoman Anne Janas, is what Worhle passed along:

"I am starting my own web content business: It is in Beta and next week I am launching I am also looking at investing in early stage digital content businesses with private equity backing."

Interestingly (strangely?) Wohrle describes herself as a "digital media amateur" in the About section of

Bill Mickey

Guerrilla Cover Testing

Bill Mickey Audience Development - 01/10/2008-14:11 PM

I interviewed Kristy Kaus, Active Interest Media's research director, for a story I wrote in the January issue of FOLIO:. Kaus has been doing cover research for a number of AIM's enthusiast titles, and her program has provided a measurable boost in newsstand sales. The research is done via online surveys-a method that puts cover testing well in the realm of small to mid-sized enthusiast publishers that otherwise wouldn't spring for a full-on, focus-group or direct mail approach.

The testing is performed through a proprietary Web-based survey platform developed by Kaus, and can be executed with a 36-hour turnaround. If you're feeling skittish about using an online-based testing group, don't be. Kaus notes that readers are typically online anyway, and backtested her groups just to be sure their opinions matched performance. "We tested a past poor performer versus a past top performer. With every control on the online survey the top performer won. So that was enough to validate the program for us, that it's effective. And it gave us enough assurance that moving forward was a smart idea," Kaus told me.

I suppose it's a more guerrilla approach to cover testing, and perhaps not as hermetically sealed as a formal, live version, but Kaus' numbers speak for themselves: "For every test that I have done, the sellthrough has either stabilized with the same issue month the year prior or it has increased, and in some cases increased pretty substantially," says Kaus. Southwest Art jumped 12 percent in singlecopy sales, and Vegetarian Times increased 21 percent, for example.

Not too shabby.

Bill Mickey

2008: What the Bankers Think

Bill Mickey M and A and Finance - 12/21/2007-15:22 PM

If you haven't stopped by our massive (and growing) list of magazine predictions for 2008, do so. In the meantime, for those of you who are more financially inclined, I've pulled out the banker predictions and compiled them here.

Interestingly—predictably?—there's a mix of optimism and wariness for the year ahead. On the one hand, we're coming off an amazing run of M&A action fueled by the deep pockets of private equity. On the other, we're still smarting a bit form last summer's credit crunch and staring at a possible recession in 2008, which may stop the overly-leveraged dead in their tracks.

Here are the banker predictions. And click here to see the full, industry-wide list.

NAME: Reed Phillips
TITLE: Managing partner, desilva + phillips
2008 PREDICTION: Last year, I said I'd be watching with great interest the possible sale or break-up of the Tribune Company. Now, I think it is safe to predict that the company will be sold any day now. [EDITOR'S NOTE: Less than an hour after Reed sent this over, prediction #1 came true.] My prediction for 2008 is that by year-end valuations for newspapers, specifically, and print media, in general, will start to rebound.

NAME: Chris Shannon
TITLE: Managing director, Berkery Noyes
2008 PREDICTION: On the consumer side, M&A will be as busy as it was last year, as far as what's in the funnel. Strategic buyers will make a comeback and play larger role in 2008. Everyone out there that's either buying or selling it has to have a digital component. Next on the priority list for buyers is a mobile component. If you have a magazine to sell, the ones that have a Web site and even just the beginnings of a mobile product definitely have an advantage.

NAME: Larry Grimes
TITLE: President, W.B. Grimes & Company
2008 PREDICTION: More private equity firms will look to exit magazine publishing in 2008 but may find buyers slim to come by. Many will find their assets have depreciated substantially over the past 18 months, in large part due to mismanagement. The groups will recognize that the tuck-in acquisitions they have been avoiding for a couple years really do make sense and will start pursuing those smaller strategic deals as a way to boost both top and bottom line growth. Many of the publishers who have an eye on digital acquisitions will find the pickings are very slim and will realize growing digitally from within is their best approach. Video will become an increasingly important element of publishers' online strategy and especially for their advertisers. Online directories will continue their metamorphosis from simple listings to interactive and will include product offerings. Deal flow will be slow until the banks start lending again.

NAME: Scott Peters
TITLE: Managing Director, The Jordan, Edmiston Group, Inc.
2008 PREDICTION: Media M&A in the middle market will remain active and will equal the transaction volume of 2007. However, overall transaction value will decline as the debt-heavy, mega deals get sidelined as the credit markets continue to work through challenging issues.

NAME: Thomas Kemp
TITLE: Managing director, Veronis Suhler Stevenson
1. The conversion from print advertising in magazines to online will accelerate in a softening economy in most, but not all markets.
2. We will see some highly leveraged transactions of the past couple of years experience extremely challenging times, what the bankers called distressed credits. Think Ziff Davis type experiences.
3. Financially backed media businesses that become distressed will replace their CEO's. Some big name CEO's will get fired in 2008.
4. Several b-to-b media companies that have adopted successful on-line strategies and cultures will thrive as eMedia achieves scale of revenue and profit.
5. Focused, high quality, leading magazines will continue to grow and buck the trend of the digital revolution.
6. M&A market will continue to be strong for quality assets, particularly for the middle market properties, $50 - 100 million, although transaction multiples will come back to earth as a result of tighter credit markets.
7. The media world will not come to an end as we know it. That is, Google will is not the evil empire of the media industry.

Bill Mickey

Time Warner’s Break-Up Man?

Bill Mickey M and A and Finance - 12/17/2007-17:20 PM

The New York Times reports that Jeffrey Bewkes [right], who takes over as Time Warner CEO in January, has "quietly" hired Douglas Shapiro to head up investor relations. Shapiro was formerly an MD and research analyst for Banc of America Securities and joined Time Warner a month ago.

Coincidentally or not, a February report by Shapiro on Time Warner had a buy recommendation on the stock at $25 a share because "we think there is a chance it pursues a restructuring eventually, including possibly divesting publishing or AOL, or even a full breakup of the company into its four logical components." That would include Time Inc., presumably.

If Bewkes eventually does take Shapiro's advice, here's what a spun-off Time Inc. might look like.

Bill Mickey

PGA Deal ‘A Fabulous Buy,’ Says Observer

Bill Mickey M and A and Finance - 12/13/2007-10:05 AM

An e-mail from an "industry observer" on yesterday's purchase of Publishing Group of America by Bain Capital Partners and Shamrock Capital Growth Fund:

"I think this is potentially a fabulous buy for these two investor groups. PGA is a group that has successfully launched two huge winners. Controlled circ so the inserts are force fed. Originally designed as the "Parade Magazine" for the weekly and small daily newspaper industry. Good editorial products. And with their circ base, a strong buy for national advertisers-especially those who want to penetrate the rural and semi-suburban markets. This is not an Internet play and probably never will be. Makes me wonder why folks like Meredith have not tried to duplicate this by teaming up with the major newspaper companies, like Gannett, MediaNews, Gatehouse, etc. to produce special interest magazine inserts. These vehicles do not lend themselves to selling local ads but they do enhance the editorial quality of the local newspaper and do provide a higher level content than most local papers can afford to produce. I have not read what they paid. I would guess a pretty penny."

Bill Mickey

Dennis Turned Down ‘Hundreds of Millions’ for The Week

Bill Mickey M and A and Finance - 11/30/2007-14:57 PM

Felix Dennis has a little more work to do yet on his weekly news compilation The Week. He tells David Carr that he'll be expanding the magazine into more markets and has fended off some significant offers. "Cross my heart and hope to die, I have already been offered hundreds of millions of dollars for it."

Even after selling off Maxim, Stuff and music magazine Blender to Quadrangle-backed Kent Brownridge in mid-2007, Dennis declined to sell his one remaining U.S. title, noting that he expects it to become a sizable franchise. "I will throw The Week onto no pile until it becomes a half a billion or billion-dollar franchise. The Week is my baby," he says.

The North American version of the magazine has a circulation of about 500,000; the British version is the original; and Carr writes that an eastern version of the magazine will soon be released, supported by a five-person edit team in Australia and one-man bureaus in Hong Kong, Singapore and New Zealand.

Just as The Week is Dennis' across-the-bow shot at the sagging newsweekly market, the magazine's lean staff structure is his answer to bulging mastheads. "The American magazine industry has been massively overstaffed for years and years. It is one of the most inefficient businesses in the history of the world. And you know what? The chickens are coming home to roost."