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Dylan Stableford

Zell Memo on Tribune Bankruptcy: 'Perfect Storm' Crippled Company

Dylan Stableford M and A and Finance - 12/08/2008-17:05 PM

RELATED: Troubled Tribune Co. Files for Bankruptcy Protection

Nearly a year after real estate mogul Sam Zell took the Tribune Company private in a dramatic $8.2 billion buyout, the troubled company—which owns the Chicago Tribune, Los Angeles Times and Chicago Cubs baseball franchise, among other properties—has filed for bankruptcy protection. (The Cubs franchise is not part of the filing, the company said.)

Zell said a “perfect storm” of economic factors led the Chicago-based company to file for bankruptcy.

“A precipitous decline in revenue and a tough economy have coupled with a credit crisis, making it extremely difficult to support our debt,” Zell wrote in a memo to staffers. “All of our major advertising categories have been dramatically impacted.”

Here's Zell’s memo in full:

Partners,

We just announced that Tribune is restructuring its debt under Chapter 11 protection. I'm sure you saw the speculative coverage last night and this morning. I would have preferred everyone get the news from me first, but since our debt is publicly traded, we had to keep this decision confidential until we had a formal board decision. The Cubs franchise is not part of the filing.

Most importantly, I want to stress that we will continue to operate our business as usual. That includes meeting payroll and covering benefits (such as healthcare, disability and others), and paying vendors for all goods and services they provide to us going forward.

As is routine with Chapter 11 filings, we have filed "First-Day Motions" to get court approval on these and many other programs that are essential to continuing our businesses without disruption. We expect to get approval on these motions within the next few days.

You are also most likely wondering about the other aspects of your compensation. The 401(k) is unaffected by the filing, and in general, the existing benefits in the pension and cash balance plans are also unaffected by the filing. The ESOP is part of the ownership structure, so its value and role long-term will be determined in the restructuring. We believe the structure is a valuable asset to the company and that there are strong reasons to preserve it.

So, how did we get here? It has been, to say the least, the perfect storm. A precipitous decline in revenue and a tough economy have coupled with a credit crisis, making it extremely difficult to support our debt. All of our major advertising categories have been dramatically impacted.

By restructuring our debt, we will reduce the pressure on the company's operating businesses, enabling us to pursue our vision of creating a sustainable, cutting-edge media company that is valued by our readers, viewers, and advertisers, and that plays a vital role in the communities we serve.

This filing should not impact the way you do your jobs on a day-to-day basis. We will continue to operate responsibly in a challenging environment -- aggressively managing costs and maximizing revenue opportunities. These are all things we would do whether or not we were restructuring our debt.

Our challenges are consistent with those facing all media companies, and an increasing number of companies across a variety of industries today. The reality is that we -- along with the rest of the country -- have very little visibility on where the economy is headed and how our businesses will perform given the recession.

The good news is that we have great brands, and we produce great products every day. It's up to all of us to continue to focus on what it is we do best.

As your Chairman and CEO, I will continue to be actively engaged in the business and I remain committed to the company, to you and to our lenders. Randy, Gerry and the rest of the management team are equally dedicated to moving this company forward.

I'm sure you have a lot of questions that this email doesn't cover. I encourage you to visit TribLink where we've posted some anticipated Q&A, or call the toll-free number we've established -- 888-287-7568. We'll also have information posted on Tribune.com. But, recognize that there is quite a bit we don't know -- or that we cannot confirm -- at this point.

I am proud of the work we have done at Tribune in the last year. I've seen strong determination to take hold of this company and put it on a new course. As a result, we've reduced costs, gained market share, and laid the groundwork for creating a new business model out of traditional media. This restructuring will give us the time we need to build that model, to secure sustainable and growing cash flow, and to achieve the success the talented partners in this company deserve.

Sam

[PHOTO: Mediabistro]

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Dylan Stableford

Ralph Lauren’s Web Strategy Eclipsing the Magazines it Advertises In

Dylan Stableford Sales and Marketing - 12/05/2008-11:30 AM

At the lunch break of the WWD Media + Style summit at the Pierre Hotel Thursday, attendees—300 or so media and fashion executives, most of them female—were still talking about the morning’s flashy opening keynote presentation by David Lauren, son of Ralph and senior vice president of advertising, marketing and corporate communications for Polo Ralph Lauren, where he oversees $200 million in global advertising and marketing campaigns for the company’s 19 brands.

Lauren—cocky, unshaven, a wild, unbrushed mane of hair, looking like he rolled out of bed in a bespoke suit—has experience in print magazines, founding the now-defunct Swing, a general interest magazine for Generation X that was distributed by Hachette. (Which is why he made a point of assuring attendees that Polo’s print ad buys aren’t going away—“Magazine advertising is something we pioneered,” he said.)

But he also has experience online, launching Polo.com, a site that boasts an average of more than 3 million unique visitors a month, a full-on digital magazine and more flash content than most magazine Web sites. The company itself has “a couple hundred” employees on the digital side. (All of which begs the question, if your brand’s Web site is so successful, why bother advertising on magazine sites, whose traffic—and expertise—you dwarf?)

Lauren also wowed the crowd with a video of curb-side store touch-screen kiosk (which Lauren said he came up with after watching Minority Report) and a demo of Ralph Lauren’s Japanese print ads, which all include a bar code that Japanese consumers scan with their cellphones to buy via access Polo.com’s e-commerce site, and even more content, using QR technology.

Lauren seemed to be here to assure executives that print isn’t going away (“Print is more important than ever,” he said. “When you have [advertisers] pull out, people get behind a leader—it gives them hope.”)

His presentation, though, should give publishers pause, too. If an advertiser is so ahead of the game online, and as print fades, why should they care about your Web site?

[Photo: David Lauren and Lauren Bush at a recent Time 100 party]

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Dylan Stableford

ESPN The Magazine Story Made Prescient by Plaxico

Dylan Stableford Editorial - 12/05/2008-11:22 AM

A week and a half ago, ESPN The Magazine published a cover feature—“Living Scared”—on NFL security. (The story’s dek read: “A year after Sean Taylor's murder, NFL players still live in fear.”)

You can see the impact of Taylor's death in the body language of 315-pound Chiefs rookie Branden Albert as he leaves a club, checking and rechecking his rearview mirror to make sure he isn't being followed. It's in the nervous laughter of Steelers QB Ben Roethlisberger when he recalls the time a weapon was waved in his face. It compels Jaguars running back Fred Taylor to use the car with the less showy factory rims when he goes out at night.

Following the news that Plaxico Burress, the New York Giants wide receiver, accidentally shot himself at a Manhattan nightclub with a gun he allegedly didn’t have a license to carry, the magazine’s story is now prescient, Keith Clinkscales, ESPN’s SVP of content development, told executives during a panel at the WWD Media + Style Summit Thursday.

Of the story, he said, the magazine's editors “weren’t lucky—they were good.”

Now, no disputing the talent of ESPN’s editors. (Check out FOLIO:’s video interview with GM Gary Hoenig to get a better sense of how the editorial team is managed.)

But, c’mon Keith, of course there’s luck involved. You mean to tell me ESPN’s editor’s sensed a star wide receiver would carry a glock into a nightclub, accidentally shoot himself and allegedly try to cover up the incident, a week after this story was published?

As anyone who watched last year’s Super Bowl will tell you (Eli Manning to David Tyree, anyone?) you need a little luck to go along with that talent.

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Dylan Stableford

Hearst Prez: November Cosmo Sold 450,000 More Copies Than a Year Ago

Dylan Stableford Consumer - 12/05/2008-11:11 AM

During her keynote yesterday at the WWD Media + Style Summit, Cathie Black, president of Hearst Magazines, was not only refreshingly blunt ("I think we've all stopped lying to each other" she said of the state magazine business); she was refreshingly, if cautiously, optimistic about the future of print, telling the audience (the most attractive, sweetest smelling of any magazine conference I’ve ever attended, by the way) that the November issue of Cosmopolitan sold some 450,000 more copies than it did a year ago.

“Why the enormous bump?” I asked Black afterwards. “I don’t know,” she said. “We had Lauren Conrad—“L.C.”—on the cover [with the coverline “Bad Girl Sex”]. Someone told me during tough times, people want more sex, maybe?”

Perhaps. Although, as an astute FOLIO: reader points out, might it have something to do with all of those exiled CosmoGirl! readers?

About that, Black said: "It broke my heart to lay off 50 or 60 people" at CosmoGirl!, which closed in October. "Advertisers walked away from the teen market" in print, "and I think that's crazy."

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Dylan Stableford

Condé Nast's Flip Flops

Dylan Stableford emedia and Technology - 12/02/2008-17:20 PM

Flip.com, Condé Nast's expensive social network/virtual scrapbooking outpost for teen girls, has officially flopped. The site, which Condé acquired in 2007, will be shuttered in two weeks.

Like most publishers, Condé Nast has been scrutinizing its portfolio in recent months looking to cut costs—including some 5 percent of its overall staff, according to various reports. Unlike most publishers, though, the company has not been shy about cutting back on the online side (see: Portfolio.com et al).

Here's the note (via FishbowlNY) Flip's staff sent to members, dubbed, naturally, "flipsters":

Dear Flipster,

We are sorry to tell you that Flip will be closing on Tuesday, December 16.

If you have any flipbooks that you would like to save before this date, we suggest you print them. It's easy; go to the flipbook and click on the Print button just below it.

Thank you for your dedication to Flip and for making it an exceptionally creative community. Also, please visit our sister site, TeenVogue.com.

Flip Staff

In January, CondeNet announced that was shifting its focus away from Flip's destination URL toward popular social networking platforms like Facebook and MySpace.

It appears that approach didn't work, either.

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Dylan Stableford

Pregnancy Magazine Mimics Infamous ’93 Rolling Stone Janet Jackson Cover with Jan from ‘The Office’

Dylan Stableford Design and Production - 12/02/2008-15:55 PM

When it comes to rock-n-roll, some say imitation is the sincerest form of flattery (Have you ever heard or seen Mr. Brownstone, the Guns 'N’ Roses cover band? They’re awesome!). Others say kill your idols.

When it comes to magazine cover design, the best approach probably falls somewhere in between. Future US Inc.’s Pregnancy went for broke for its recent November issue cover, attempting a note-for-note “cover” of Rolling Stone’s infamous 1993 portrait of Janet Jackson featuring a pair of strategically placed hands. (Pregnancy swapped out Janet with Jan from NBC’s The Office.)

Designers are usually split on the issue. (Luke Hayman, for one, criticized Esquire for imitating itself.) I think magazines are better served by drawing inspiration from covers, rather than copping entire designs. Check out this recent, excellent Transworld Snowboarding cover, and the Esquire-pioneered, angled type treatment it borrows from.

I say all of this, of course, knowing I was pushing hard for FOLIO: to violate this approach entirely for our “green issue” cover with a blatant ripoff of a National Lampoon classic.

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Dylan Stableford

Does Ann Moore Deserve a Lifetime Achievement Award?

Dylan Stableford Consumer - 11/25/2008-17:05 PM

Ann Moore? Really? I mean, really?

I don't get terribly hung up on awards, especially in the publishing industry—a particularly self-congratulatory group that doles out a disproportionate amount of them. (It’s not that I don’t love the magazine industry—I love baseball, and baseball gives out an absurd amount of awards, too.)

Still, today’s announcement by the Magazine Publishers of America that Ann Moore, the chairman and chief executive of Time Inc., will receive the Henry Johnson Fisher Award for lifetime achievement alongside Martha Stewart in January struck me as a wee bit premature.

After all, Moore is currently in the process of executing a dramatic, sweeping reorganization—one that includes a reported 600 layoffs at the mega-publisher. (And layoffs that appear to be trickling out of Time Inc.’s hallowed halls at a prodigiously slow drip.)

Moore’s 30-year career at Time Inc. notwithstanding, in her tenure as CEO—since 2002—she really hasn’t had a defining moment, at least, not yet. (In fact, one could argue, her defining moment is the financial crisis all publishers—and the world at large—are currently grappling with.)

If she can steer Time Inc. through the economic storm, well, she would deserve a lifetime achievement award and to be inducted into the Magazine Hall of Fame. Hell, she’d deserve to be in the Baseball Hall of Fame.

Just not yet.

As for Stewart, I can admit I’ve had a what I consider a healthy crush on the diva of domesticity ever since I saw her gamely wash down a bacon double cheeseburger with a cold can of Budweiser on Late Night with Conan O’Brien a few years back.

My love was unfazed by the ImClone stock scandal and resulting five-month prison term; the post-penitentiary poncho actually made me fall for her more.

That Stewart was chosen to be in the Magazine Editors Hall of Fame, to me, is a no-brainer. She’s been in mine for a long time.

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Dylan Stableford

Explaining Scaling Back Print to Advertisers

Dylan Stableford Sales and Marketing - 11/24/2008-17:58 PM

On Friday, FOLIO: reported that Penton had decided to significantly scale back the print version of Remix from a monthly to a quarterly, positioning it as a "Web-first" brand.

Here's how publisher Joanne Zola described the shift in an e-mail to advertisers:

Dear Advertiser,

In January, Remix will shift 100% to a “Web first” property.

Remix will continue to serve the growing market of emerging music producers, engineers and artists, and the facilities and services that feed them. But we will now focus our content where this market consumes media: online and at our regional events. As a media company, our top priority is to deliver information to our readers in the most effective possible format.

In 1999, I helped launch Remix magazine to complete the EM and Mix portfolio. Our advertisers were looking for a way to reach the next generation of music producers, engineers and artists. The response was strong from both the manufacturer community and the readers. A brand was born. Today, Remix remains the only property in the industry addressing technology and music for that 20- to 35-year-old professional.

During the past eight years, growth of the Remix audience has been tied directly to the growth of the Internet. 50% of all Internet users are between the ages of 15 and 34 (500 million users overall), meaning one in two users on the Web is 100% in the Remix target demographic. In parallel, the Remix Website has been one of the top five fastest-growing Penton Websites six years running (Penton has over 160 sites), increasing traffic more than 25% year-over-year.

Our events business has also been on the growth fast track, with Remix Hotel attendance climbing 20% each year. Major technology companies like Apple, Microsoft, Intel, Avid and Sony have sponsored Remix Hotel events to reach the emerging artist pool and interact with them one-on-one. The live interviews, panels, product demonstrations and master classes at each Remix Hotel make these must-attend events for our audience.

With Remix’s evolution to a “Web first” brand, we will not only refocus our content to the Internet but also restructure the Emeryville editorial department to include a dedicated Web content team. Editorial emphasis will shift to an information exchange centered around a new online product database and expanded rich media content. This team will produce content specifically for the Web, leading the way with technology-focused editorial, video content, artist interviews, tutorials and product reviews. In addition, Remix will have the support of the full Penton new media team (70-plus employees) and a dedicated Web developer in the Emeryville office.

The print edition of Remix will live on in quarterly issues coinciding with Remix Hotels. Each issue will feature new technology, application pieces and artist interviews—as well as exclusive interviews with Remix Hotel special guests.

Remix is poised to be the premier source of news and information for the pro-audio and MI markets. We believe that the energized brand will offer the most complete marketing offerings to reach our readers—your customers—in print, online and events. But you are not alone in this new environment: Our sales and editorial teams are available to discuss your needs and help design a dynamic plan that suits your products and expands your customer base.

We thank you for your support these many years, and we look forward to working with you in 2009 and beyond.

Sincerely,

Joanne Zola

Group Publisher, Mix, EM, Remix
________________________________________

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Dylan Stableford

Reader’s Digest Considering Name Change

Dylan Stableford Consumer - 11/24/2008-16:19 PM

Along with its coverage of the Reader’s Digest Association’s mega deal with a mega church to produce a magazine and a social networking site RDA calls a “Facebook for Christians,” the New York Times reports that RDA CEO Mary Berner is “casting about” for a new name for the company.

We’ve heard rumblings about this since as early as September. It appears that even Berner—who has been somewhat of a lightning rod since coming over to Pleasantville from Condé Nast—is having a tough time deciding on one.

So, in the spirit of community, I thought it’d be fun—and useful!—to collectively brainstorm new names for Reader’s Digest. Here are some suggestions from the FOLIO: staff. Feel free to add yours in the comments section below.

  • Leader’s Digest
  • Reader’s Nast
  • Everyday, Inc.
  • The House that Rachael Built
  • Purpose Driven
  • Pleasantville Publishing
  • Escape From Condé Nast
  • Mary Berner Omnimedia
  • FDA
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Dylan Stableford

People’s Sexiest Man Alive Issue to Include ‘Scratch-n-Sniff’ Section

Dylan Stableford Consumer - 11/20/2008-15:04 PM

Ever wonder what Michael Phelps smells like?

People magazine, which has a history of experimenting with sensory advertising within its pages, is set to publish a “scratch-n-sniff” section in its Sexiest Man Alive issue.

The magazine, which hits newsstands on Friday, includes a section dubbed “Sexy Scents” with “scratch-n-sniff” photos of Gossip Girl actor Chace Crawford, film actor Taye Diggs, Law & Order star Chris Meloni and U.S. Olympic gold-medal swimmer Michael Phelps—each of whom “describe the fragrance that makes them feel their sexiest.” (Crawford chose freshly cut grass, telling the magazine he “grew up playing a lot of football and golf ... When I smell freshly cut grass I get this air of competition. It wakes me up, gets me going”; Diggs “loves vanilla, chocolate, sandalwood and musk essential oils.”)

In February, People ran an ad for Welch’s 100% grape juice which encourages readers to lick a taste strip in what the campaign touted as the final frontier of sensory marketing in magazines to be attempted by Madison Avenue.

Magazines have tried carrying all sorts of sensory ads—sight (remember those LEDs cropping up a few year ago?), sound (People once accepted an ad that played Elvis’ “Hound Dog” to annoying effect), touch and, of course, smell—but this is the first instance I can recall a magazine using "smell" in an editorial setting.

(Although how pure it is as an editorial play may be up for debate—Phelps, after all, chose "L’Homme YSL" as his favorite scent. I asked People whether or not Yves Saint-Laurent paid for placement. People says they did not.)

This is not, however, the first time People has used sensory technology in an editorial section. In 2006 the magazine put out a Kraft-sponsored, subscriber-only holiday issue, which featured sensory technology in both advertising and editorial sections.

At the time of the Welch’s ad, I suggested the magazines’ editorial teams embrace the available sensory technology. “What if you were reading a 29-page Vanity Fair article on, say, the war in Iraq in which you could open a flap and actually smell Baghdad? Or how about lathering Sports Illustrated’s Baseball Preview in pine tar?”

Seeing what People did with the technology here (Meloni’s favorite scent: "a day at the beach") I may have to rethink this. I still stand by the pine tar idea, though.

Through September, People’s ad pages were down 6.1 percent—better than the industry’s 9.4 percent average, according to the Publishers Information Bureau.

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Dylan Stableford

Did Scantily-Clad Cover Model’s Harley Ad Cross Edit Line?

Dylan Stableford Editorial - 11/19/2008-16:40 PM

Sid Holt, the American Society of Magazine Editor’s newly-appointed CEO, said recently that ASME is working on revamping its editorial guidelines to address the industry’s increasingly blurry church-state boundary between advertising and editorial. “They don’t seem to be current, so a lot of questions come up about them,” Holt, a former editorial director at Nielsen, told Mediaweek. “We’ve had situations where we’ve seen violations of the spirit of the guidelines but not the guidelines themselves.”

Perhaps this is one of those situations.

Complex magazine, one of the few men’s product-driven magazines still standing, featured Marisa Miller, the Sports Illustrated swimsuit model, on one of its November covers (the magazine publishes a front and back cover, usually one with a model, the other with a celebrity). The issue has a six-page feature on Miller; included within the feature is a gatefold advertisement for Harley Davidson’s V-Rod motorcycle, featuring Miller—from what appears to be the same photo shoot as the feature—in leather chaps straddling the two-wheeler.

Now, for starters, product-driven magazines—by definition—are not normally viewed as bastions of editorial integrity. And there’s nothing inherently wrong with placing an ad featuring an issue’s cover model in the same issue or even alongside the story. But when the ad creative appears to have been generated from the cover shoot—or vice versa—something doesn’t quite seem right.

I emailed Complex about this. Here’s their response:

It's a completely different photo and it just so happened that Marisa was on our cover and in Harley's new campaign around the same time.  It was a total coincidence, but we have been doing business with HD for a while now, so when we received the creative, it only made sense to run it in close proximity to the article. 

UPDATE: Apparently I wasn't the only one thinking Complex blurred the line. AdAge's Nat Ives asked Holt about the Complex kerfuffle. Here’s what Holt said:

"To put it really bluntly, it looks like they sold edit for advertising … I don't know if they did that, and it may have gone down the other way around. I don't know what happened here, but it's obviously preferable to avoid the appearance of conflict."

I agree with Holt, although if it’s only a couple of meddling media reporters who are thinking there might be a conflict—not Complex readers—then who cares?

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Dylan Stableford

'D' Editor: 'I'll be Writing and Illustrating Every Story in Our February Issue, for Starters'

Dylan Stableford Editorial - 11/18/2008-14:03 PM

Interesting quote in the story about layoffs at Dallas' D magazine, via executive editor Tim Rogers:

"What that means is I'll be writing and illustrating every story in our February issue, for starters."

Full text of Rogers' e-mail to FOLIO::

Here's what I can tell you about the cuts:

We've experienced explosive growth since I came to work for the company seven years ago. We assembled the best team of media professionals in North Texas -- if not the Milky Way. Every one of the 14 people we let go from the magazine division will be missed. It was a painful process.

The reason for the cuts? Ad revenue for us is down. More important, our projections indicate 2009 will be a lean year. We did what was necessary to keep our company profitable and healthy.

As for D Magazine proper, we did not lose a single edit or art person -- though we all took pay cuts. And we will be working with reduced freelance budgets. What that means is I'll be writing and illustrating every story in our February issue, for starters. Expect a magazine focused on every detail of my personal life. Should be a newsstand killer.

--
Tim Rogers
Executive Editor
D Magazine
4311 Oak Lawn, Suite 100
Dallas, TX 75219
[PHONE REDACTED]
www.dmagazine.com

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