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Jason Fell

UPDATE: Magazine-Related Debts Help Push Lenny Dykstra to Bankruptcy

Jason Fell M and A and Finance - 07/09/2009-11:32 AM

Managing one’s finances can be tough as nails in this crazy economy.

No one knows this better, now, than former baseball slugger-turned-car wash millionaire-turned-magazine publisher Lenny Dykstra [pictured]. The former New York Mets and Philadelphia Phillies outfielder—nicknamed “Nails”—filed for Chapter 11 protection in California this week.

In his petition, Dykstra claimed $50,000 in assets and between $10 million and $50 million in liabilities.

Some of Dykstra’s financial woes stem from the failed launch of the Player’s Club, a monthly magazine for professional athletes he published as part of a partnership with Doubledown Media—a publisher of magazines aimed at the Wall Street elite—which went out of business earlier this year. Before the title launched, Dykstra sued Doubledown claiming breach of contract. Doubledown filed a counterclaim alleging Dykstra owed the publisher more than a half million dollars.

Creel Printing also was listed as a creditor in Dykstra’s bankruptcy filing.

On top of his magazine-related troubles, foreclosure papers were issued in March on Dykstra’s $18.5 million mansion and his private jet was reportedly impounded after he failed to pay thousands of dollars in renovations.

I only hope Dykstra isn’t forced to auction off his 1986 World Series ring with the Mets.

UDATE: Dykstra told CNBC Thursday that despite the Chapter 11 filing, he’s getting ready to relaunch the Player’s Club. Dykstra also said the filing is about “reorganization, not bankruptcy. I’m not bankrupt.”

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Jason Fell

Wimbledon a Boon for Tennis.com

Jason Fell emedia and Technology - 07/08/2009-08:06 AM

Grass courts. Tennis whites. Big ratings.

I’m writing about Wimbledon, of course.

While NBC saw the marathon men’s final between Roger Federer and Andy Roddick draw the contest’s biggest TV ratings since 2000, other media outlets capitalized on the frenzy, too.

Tennis magazine’s Web site Tennis.com, for instance, saw 104,022 unique visitors and 994,250 page views during the four hour and 16 minute match. That’s up almost 25 percent and 55 percent from the epic Federer vs. Rafael Nadal final last year, the magazine said.

Over the two weeks Wimbledon took place, Tennis.com saw the number of unique visitors increase 25 percent and page views jump 34 percent over last year. Tennis.com editor James Martin attributed the surge to the “quality and quantity of our reporting. Amid our competitors, we’re the first to post on breaking news and big match results.”

Tennis.com better bulk up on bandwidth if Federer goes for his sixth straight U.S. Open championship this fall.

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Jason Fell

Black Man’s Head Photoshopped onto City Guide’s Cover

Jason Fell Design and Production - 06/24/2009-10:23 AM

We don’t write about city travel guides very often. In this case, though, I couldn’t resist.

The Canadian city of Toronto recently debuted its Spring/Summer 2009 “Fun Guide” featuring a smiling, ethnically diverse family on the cover. The problem? The face of the African-Canadian father was digitally imposed onto the face of the man in the original photo.

[Click here to see the comparison.]

A city of Toronto spokesperson told Canada’s National Post the original photo was doctored to better “depict the diversity of Toronto and its residents.”

I’m all for representing a city’s diversity, but imposing the head of a man of one race onto the shoulders of another man, is unacceptable. Not to mention this cover looks like a gag.
 
“Is that a joke?” asked one creative director I shared this story with. “That’s just horrible.”

And, the best part: the original photo is a stock image. The family is “not known” to be Toronto residents.

[Editor's note: This post reminds me of an old Onion headline—"Black Guy Photoshopped In"—but, unfortunately for the city of Toronto, this time it's not a joke.]

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Jason Fell

Ex-Interview Editorial Director Suggested Putting Magazine on the Block

Jason Fell M and A and Finance - 06/12/2009-15:42 PM

From layoffs to extravagant photo shoots to freelancers going unpaid, the rumor mill on the financial pitfalls at Brant Publications has been on overdrive for many months. The most significant move recently was the ouster this week of editorial director Glenn O’Brien, who was promptly replaced by former co-editorial director Fabien Baron, who—get this—left the company in February.

A Brant spokesperson did not return a FOLIO: phone call this week seeking comment on the changes happening at the company.

However, details emerged by way of Fashion Week Daily’s exclusive—if not a bit scorned—interview with O’Brien, during which he said the situation at Brant is “like a Greek tragedy. Like watching a company go insane, instead of a person.”

O’Brien pointed to the departure of group publisher Alan Katz and the elevation of owner Peter Brant’s son, Ryan Brant, to president as a major financial stressor on the company. Things got so bad, O’Brien said, he offered to help put Interview on the block. “I told Ryan Brant that if Peter’s situation is that bad, how about selling [the magazine]? I was prepared to go out and look for a team of buyers … I would have liked to get together a group to buy from Peter, but I never got an answer.”

While almost every magazine publisher is feeling the financial pinch in this recession, one thing is for sure: Things at Brant/Interview haven’t seemed the same since longtime editor-in-chief Ingrid Sischy, and former co-owner Sandra Brant, left the company in January 2008.

Besides Interview, Brant publishes the Magazine Antiques, Art in America and newly-launched Modern.

UPDATE: It appears Brant has fired back at O'Brien with a lawsuit alleging he breached his contract by speaking to the media.

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Jason Fell

Condé Nast, Hearst: Dream Factories Facing Declining Revenues

Jason Fell Consumer - 06/03/2009-21:56 PM

Condé Nast and Hearst, two heads on the Mt. Rushmore of the consumer publishing industry, were the subjects of lengthy profiles recently.

New York magazine contributing editor Steve Fishman this week wrote an intimate, detailed profile of Condé Nast chairman Si Newhouse, the publishing empire he created, and the players—including Vanity Fair editor-in-chief Graydon Carter and darling super-group publisher David Carey—who make the company what it is today.

The nearly 7,000-word cover story painted Newhouse as a man who romances the business of publishing magazines. The New Yorker editor-in-chief David Remnick told Fishman that Newhouse “loves magazines, meaning the whole and all of it, the variety of things published, the business details, the visions and actions and personalities of his editors, the problems, the problem-solving, the ink and paper … the all of it.”

While it takes a lot of passion (hopefully) to oversee a company like Condé Nast, the business, as the story points out, is about making money. For years, the privately-held company has seen cash cows like Glamour keeping sister titles often in the red, like the New Yorker, afloat.

However, the economic recession and the subsequent advertising pullback took an exceptionally dramatic toll on Condé Nast. Through the first three months, the company’s 22 magazines combined for an average 30.5 percent decline in ad pages—compared to the consumer-side average of -25.9 percent, according to PIB. The company’s drop-off was punctuated by big losses from Portfolio (-60.9 percent, and shuttered in April), Wired (-57.2) and Architectural Digest (-47.2). Even Glamour was down 22.3 percent.

Meanwhile, Hearst was the subject of a rather sympathetic profile in the New York Times. The publisher saw ad pages at its 14 titles—not including the Food Network magazine—fall an average of 20.87 percent during the first quarter.

To be fair, PIB figures don’t represent additional revenue streams, including online, data, events, etc. But Condé Nast has been slow in some of these areas, especially the move to the Web. As the New York story pointed out, the publisher has viewed the Internet mostly as a vehicle to sell magazine subscriptions, and not much else.

Even Remnick had a sober outlook on the future of its magazine portfolio: “Look, the economic climate is awful. There’s no reason anything in this world stays the same. Only a fool, and I don’t think there are any fools involved in this story, would assume that the picture, right at this moment, is going to stay the same.”

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Jason Fell

More Magazines Returning from the Dead

Jason Fell M and A and Finance - 05/26/2009-11:08 AM

The economic recession has put the traditional publishing model to the test, to put it mildly. With advertising dollars plummeting, publishers have been scrambling to find new revenue streams. Many magazines are on financial life support right now. Others, as we are all too aware, have folded.

But more and more of these grim stories have produced silver linings. Magazine publishers that either folded or were on the brink of bankruptcy have managed to secure outside financing to stay in business.

East West founder Anita Malik said she plans to relaunch the bi-monthly magazine targeting Asian Americans in September after more than a year-long hiatus. Although Malik is still looking for additional investors, she told FOLIO: she needs only $150,000 to $200,000 to get the print edition up and running.

This month, 35-year-old music title Relix returned from the dead. It was acquired by a group of investors—including a core group of the magazine’s employees—three months after being put on temporary hiatus by publisher Zenbu Media.

As of last week, Decatur, Georgia-based Paste raised $166,000 from readers as part of a campaign to save itself from bankruptcy.

I think these are just the tip of the iceberg. Garden & Gun, JPG and Natural Solutions magazine publisher InnoVisions Health Media all were on the brink of extinction, but managed recently to find financial lifelines.

For publishers and PE firms with capital to spare, now is proving to be a good time to make strategic acquisitions and/or investments in magazine products that—with some creative thinking on the business side—show potential to be profitable.

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Jason Fell

Can Great Content Really Save Magazines?

Jason Fell Editorial - 05/18/2009-14:14 PM

With the print magazine business model showing unprecedented weakness under the economic recession, top editors have been tasked with creating compelling, sometimes out-of-the-box content that will, in theory, not only keep their readers but keep them in print.

One magazine that has managed to do this pretty successfully is Wired. Editor-in-chief Chris Anderson has steered the Condé Nast tech title to several honors, including three National Magazine Awards (tying Backpacker, Esquire and the New Yorker for the most), for one measure of its editorial success.

However, as the New York Times points out, the magazine has suffered significant financial losses. Ad pages have plunged roughly 50 percent so far this year.  According to writer Stephanie Clifford, Anderson, during his eight years as top editor, hasn’t managed to come up with an idea big enough to “reinvigorate Wired’s business.”

But what consumer magazine has? The advertising fallout has hammered all magazines, not just Wired. Through the first quarter, consumer ad pages were down 25.9 percent, according to Publishers Information Bureau figures. Only 15 titles managed to post ad page gains during the period.

Even fellow top Ellie winners Esquire (-25.2 percent) and the New Yorker (-35.7) saw ad pages plunge. (PIB stopped tracking Backpacker’s ad pages after 2008).

In the Times story, Wired publisher Howard Mittman said the magazine hit “bottom” with the March issue, which featured only 38 ad pages. (Surprisingly, Mittman wasn’t mentioned or quoted until the 22nd paragraph.) To his credit, Mittman said he’s considering ideas such as tiered pricing models that offer subscribers different benefits.

Performance of 2009 'General Excellence' Ellie Winners

GROWTH AD PAGES Q109 CIRC '08
READER'S DIGEST -8.1 -12.4
FIELD & STREAM -24.8 -0.5
WIRED -57.2 -0.4
TEXAS MONTHLY -36.0 -0.5
FOREIGN POLICY N/A N/A
PRINT N/A N/A


SOURCES: ABC, PIB

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Jason Fell

A Domino Swag Tag Sale

Jason Fell Editorial - 05/07/2009-22:28 PM

Footed African platter: $40

French 18th-century three-legged farm stool: $90

Selling free swag collected while working at a home design magazine: Priceless

What do a pair of laid off Domino magazine staffers do after the magazine closes? Have a tag sale, of course.

Dara Caponigro, the magazine’s former style director, and Tom Delavan, who served as editor-at-large, rummaged through their New York City apartments to find that they had a combined 1,500 square feet of designer merchandise they amassed from photo shoots and other assignments.
 
From furniture to clothes to textiles, Caponigro and Delavan decided to sell off their assorted wares (cash only, of course) at a tag sale this weekend. The pair invited the magazine’s former contributors as well as editor-in-chief Deborah Needleman to contribute, too.

At its best, it’s an opportunity for cash-strapped aspiring home decorating stylistas to get steep discounts on designer duds. At its worst, it’s a bunch of former editors turning a profit on goods that weren’t intended to be sold publicly (check out their New York Times write-up here).

But, hey, here’s to making the best of being laid off. Former editors need to pay the bills, too, right?

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Jason Fell

Penton CEO: ‘We Are Not Showing Growth’

Jason Fell B2B - 04/28/2009-09:46 AM

RELATED: Penton Cuts Workweek, Reduces Pay

Penton Media CEO Sharon Rowlands announced a workweek reduction from five days to four days this summer and a corresponding reduction in salary pay.

In a memo to staffers, Rowlands said a number of the company’s properties during the first quarter reported financial results that were “significantly below” the same period last year and “well below budget.”

Here’s is Rowland’s entire memo:

Hello Everyone,

I wanted to provide a brief update on how we did in quarter one and share with you some important steps we are taking to further control our expenses going forward.

The first quarter was the toughest in my business career. Not only did many of our properties report results that were significantly below a year ago and well below budget, but while we were reorganizing along the lines of markets, we were forced to eliminate a number of positions across the company. This isn’t uncommon in the world today especially for companies in the media industry and ones that have a heavy debt burden. We squeaked through the first quarter thanks to all of your efforts - but the next couple of quarters aren’t looking easy.

So we have to balance short and long term decisions in times like these. Some of these are really the right decisions for the businesses - like resizing audiences and identifying more efficient ways of doing things. Others may seem counter to what we want to accomplish long-term - like dramatically reducing the sizes of magazines or the amount of content. After all, if our content is so valuable, wouldn’t our readers need MORE of it right now? Sure, but remember that one of our Achilles heels is that we are mostly supported by advertising which has collapsed.

Speaking of advertising, it has not only collapsed in print, but as a company, we haven’t shown the growth we should on the web. Penton is really tracking a long way behind the industry in terms of percent of revenue that is digital, and we are not showing growth. The good news is we have great focus on changing this picture and longer term I am bullish on what we can do here, but it won’t change overnight.

We have some tremendous exhibition franchises that on the whole pulled us through 2008 and contributed a lot of our growth last year. There will be pressure on these businesses as customers are forced to cut back all their marketing spends. Even some of our strongest shows will show negative growth this year.

Despite incredible pressure on our businesses, we achieved a great deal throughout the first few months of the year - we reorganized our business into a market-facing structure; we delivered our audit significantly ahead of prior year; a number of our businesses delivered great financial results given the economy; and in response to my request, Penton employees provided over 150 ideas to help reduce our expense base.

While we are proud of these achievements in quarter one, the stark reality is that our overall revenue picture continues to rapidly decline. This is not a reflection of our efforts but the result of the widespread financial erosion impacting almost every business and importantly the industries we serve. I wish I could wave a magic wand and change the momentum to a positive one quicker, but it’s not possible, and whilst I continue to believe we have tremendous opportunities ahead and we will see this business flourishing in the future, today we still have a tough road ahead for a few quarters.

As you well know, over the past several months, we have attempted to offset our revenue challenges with proactive cost saving measures – as I listed above. These actions, coupled with your contributions in scrutinizing every expense, have lessened the impact. However, with no clear indication that the economy will turn in the short-term and with our revenues continuing to decline, further action is required to ensure Penton remains fundamentally sound.

Please know that the senior management team and I have carefully weighed the need for the measures I am about to announce. We consider our employees our company’s greatest asset. We are committed to doing everything possible to keep our company on track and to provide you with stable and rewarding employment. With that said, in light of the current circumstances, I have made the very difficult decision to implement temporary measures that will impact each employee’s pay.

We are instituting a reduced work schedule during the summer months. From the week before Memorial Day through the week before Labor Day, the Company will reduce its operations from a 5-day work week to a 4-day work week. For many of our businesses this will involve closing our offices on Friday. Other businesses may need to take the reduction in blocks of days. The end result will be the same for every employee at every level however - it will equate to a four day work week and a corresponding reduction in pay to reflect this reduced work schedule.

Whilst the reduction in work week will be contained only to the summer months outlined above, we will spread the pay reduction in smaller increments throughout the end of the year to reduce the immediate financial stress on you and your families. Special rules may apply to employees in California and to non-exempt employees, and we will be reaching out to these employees and their managers with information and specific instructions.

This revised work schedule will not impact your benefits. In some states, you may be eligible for unemployment for the unpaid leave. If you are interested, please contact your local unemployment office. We have prepared a set of Frequently Asked Questions regarding this revised work schedule, which you can find posted on the Pulse. In the next few days, your local leadership will organize group meetings, and there will be follow-up communications from your HR reps giving you more detail.

I understand this is difficult news. Thank you for your understanding and continued dedication. I am confident that if we continue to keep our focus on our customers and commit fully to delivering solutions that drive results, we will not only overcome these short term challenges, we will be better positioned to achieve new levels of success in the years to come. I urge you to try and find some upside in this temporary change and use the extra time for yourself, your family, and your friends – time can be a gift. I don’t say this to belittle the financial impact – I know that this is a big deal. I also want to reinforce that I am determined we will come out of this recession strongly and will go on to do great things. We have some tremendous initiatives across the company that this note isn’t the right vehicle to discuss and plan to share my thoughts with you through a video communication that you will see in the next 10 days. If you have any questions, please do not hesitate to contact your manager, any member of our Human Resources Team, or me directly. And thank you again.

Regards,
Sharon

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Jason Fell

John Koten’s Unusual Departure

Jason Fell Consumer - 04/20/2009-16:22 PM

It’s a tough lesson others have learned before: Company-wide e-mails can be a career killer.

The news that John Koten [pictured] had stepped down as Mansueto Ventures CEO was confirmed Monday. But eyebrows were raised late last week when Web site Gawker posted a pair of bizarre memos he sent to staffers.

The first, dated last Thursday at 6:56 p.m., informed staffers that a crewmember on Planet Claire, Koten’s J/105—a one-design sport cruiser, offers private sailing lessons and can get employees into the Manhattan Sailing club for “800 bucks.” (Koten is said to keep Planet Claire tied up at the prestigious North Cove Marina, in the shadow of Mansueto’s offices at 7 World Trade Center.)

The e-mail is odd, at the very least oddly-timed, as Gawker pointed out, in light of two recent rounds of layoffs at Mansueto.

Then came Koten’s second mass e-mail, sent about five hours later at 11:49 p.m. In it, Koten pondered why none of his fellow Mansueto staffers bothered to ask him how he “succeeded in our business.”

“This surprises me for several reasons,” Koten wrote in the memo. “One, because I think I could give an interesting answer. Two, because it's the subject matter we are supposed to be presenting our readers. Three, because it would impress me and show some respect.”

Did these strange e-mails have anything to do with Koten’s departure? I can’t say for sure, but the timing is curious. Several e-mails from FOLIO: to Mansueto Ventures owner Joe Mansueto were not returned over the weekend. A phone call to Koten this morning was not returned.

I guess Mansueto staffers now will have to wait to see Koten on the high seas to show him the respect he thought he deserved.

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Jason Fell

Reducing Paper … With Paper?

Jason Fell Consumer - 04/13/2009-13:01 PM

Supermarkets across the country are calling on shoppers to be more green. They say we should buy environmentally-friendly products. We should buy reusable bags to carry our groceries. Some are even charging fees for their paper or plastic bags.

In the Northeast, the Big Y supermarket is no different. In fact, it has gone ahead and launched Going Green, a free magazine it says will help shoppers “make lifestyle choices that will benefit the environment and themselves.” Distributed at all of Big Y’s 56 locations throughout Massachusetts and Connecticut, the 37-page print magazine will feature money saving tips to help save the planet, a guide to eco-friendly purchases and information on reusing and recycling.

Isn’t it a bit ironic for Big Y to promote green practices by producing a printed magazine? Could they have printed “green tips” on their paper bags instead?

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Jason Fell

Magazine Bailouts, Canada-Style

Jason Fell M and A and Finance - 04/10/2009-10:44 AM

The U.S. government has injected billions of dollars into our banking and auto industries. So, what about magazines? Where’s our lifeline?

While American magazines can hold their breath waiting for a government bailout, our counterparts to the north don’t have to wait as long. Canada’s government, through its Canada Magazine Fund, has so far provided nearly $40,000 (Canadian) in funds to magazines across the country. In February, it announced the planned creation of the Canada Periodical Fund, a streamlined program to benefit magazines as well as community newspapers, eventually replacing the Magazine Fund and its Publications Assistance Program.

The Canadian government said it has budgeted $30 million over the next two years to help out the country’s periodicals.

The latest beneficiary: The Canadian Fly Fisher Magazine. "This financial support is an important contribution to the preservation of Canada's heritage; it allows us, for example, to promote one of the great outdoors activities for which Canada is famous," the magazine's editor and publisher, Christopher Marshall, said in a statement. "It is also an investment in our economy, as magazines create jobs and provide work to various suppliers."

Sure, it seems a bit socialist, but how is it any different than what the U.S. has done for the auto and financial industries?

Canada’s magazine funds are no magic solution, though. I assume that as the global economies suffer, the monies budgeted for these grants have been diminished. Canada has seen its own share of magazines go out of business in the last few months—Canada’s edition of Time, for instance. Even Masthead, the country’s version of FOLIO:, ceased publishing its print edition late last year.

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