David Levin’s Gamble
The UBM chief executive's radical plan for the former CMP.
“The company that was CMP is now gone.”
London-based United Business Media chief executive David Levin told
FOLIO: in late February when the company announced the restructuring of
CMP Technology into four separate businesses that will be led by four
co-CEOs. The impetus for the restructuring came after months of market
analysis, Levin said, during which UBM determined that the company was
working in “very different markets,” and split into four businesses to
better align CMP’s products with its customers. UBM also decided to
drop the CMP brand altogether.
The Four-Way Split
CMP’s new businesses are: TechWeb (with pro forma 2007 revenue
of $148 million), a technology market business of Web sites such as
InformationWeek.com and Light Reading, and events including Interop and
VoiceCon; the Everything Channel (pro forma 2007 revenue of $73
million), which formerly was the CMP Channel; TechInsights (pro forma
2007 revenue of $83 million), which formerly was CMP’s Electronics
Group; and Think Services (pro forma 2007 revenue of $61 million),
CMP’s former Game, Dr. Dobb’s and International Customer Management
The respective CEOs are Business Technology Group
president Tony Uphoff (who takes over TechWeb), CMP Channel president
Robert Faletra (who will run the Everything Channel), Electronics Group
president Paul Miller (who takes over TechInsights) and CMP Game,
Dobb’s, and Customer Management groups president Philip Chapnick (who
will run Think Services).
The four new businesses share
support functions like finance, IT services, legal and global account
and sales management, UBM says. Accounts payable and receivable are
part of the centralized shared services. Human resources and audience
development roles will be handled on the divisional level.
said the restructuring is not a sign that UBM may be looking to divest
one or more of the businesses. UBM reported CMP’s 2007 revenues were
more than $300 million and profits touched $50 million, up 30 percent.
In 2007, the company generated 38.3 percent of revenue from print, 34.2
percent from events, 20.2 percent from online products and 7.3 percent
from workflow tools and business information services. Last year was
the first since 2001 that CMP realized underlying revenue growth, Levin
CMP had a dramatic reorganization last June, laying off more
than 200 people and closing three magazines in an effort to refocus
online. In January, former CEO Steve Weitzner bolted for competitor
Ziff Davis Enterprise. Word came that UBM approached at least two
different prominent former U.S. b-to-b publishing executives to replace
Weitzner before splitting up the company.
observers, the move is less about making the company nimble and more
about Levin exerting control. One comment to FOLIOmag.com said,
“Basically what this is all about is David Levin taking over as the
real CEO, with Scott Mozarsky as his on-site COO to keep an eye on the
new ‘CEOs,’ operations and finances. I presume that the great CMP brand
will descend into the UBM corporate netherworld along with that other
great corporate brand: Miller Freeman.”
FOLIO: spoke with
Levin about the thinking behind the move, how both the market and
employees have responded and what this move needs to succeed.
FOLIO:: How did the idea for this reorganization originate? What is the purpose of the move?
David Levin: It’s a progression. CMP was a fantastic magazine
company and over the last three years we’ve worked hard to change the
shape of the business rapidly. In 2004, almost three-quarters of the
revenue was from magazines. Looking into 2008, we’ve said it’s going to
be less than a quarter [of the total revenue].
The shift happened
through a series of acquisitions worth more than $200 million since
2005. Through that period, we’ve progressively increased the autonomy
of the structured units within CMP. Last June, there was a major
downsizing of the print side. Print economics require centralization
whereas other operations—particularly the event businesses and online
businesses—don’t require that same type of centralization. On the
contrary, to thrive, those businesses require a lot of local autonomy
and fast decision-making.
The restructuring freed us up and moved the business post-print.
When Steve left us in the autumn, we ran this parallel process where we
had to make a choice, do we take the decentralization forward or do we
re-appoint a CEO. We pressure-tested that decentralization against a
top crop of external executive candidates in the U.S., as well as our
own internal candidates. What emerged from the feedback from customers
and the movement in our product groups was that however talented the
appointment we can make, it was going to be less effective than
sticking to our belief in agile decision-making.
FOLIO:: We understand you spoke with at least two former
U.S. b-to-b executives about taking over CMP. Was the reorganization
Plan B after those offers didn’t work out?
Levin: Absolutely not. We were at a position where we could have
appointed a number of talented individuals. This was an active choice
on our part. And I’m kicking myself for not doing it sooner.
FOLIO:: What’s been the response internally at CMP? How do you get the employees to buy into this new plan?
Levin: I do a regular set of town hall meetings and it’s evident
from the flow of people coming up to me that they are happy. It’s
evident from the flow of business statistics that sales are up. We are
attracting people to the business. Those are the metrics we have to
FOLIO:: Please describe the management structure going forward.
How will you coordinate between U.K. and U.S.-based executives? Who is
in charge of what, not just in terms of the new U.S. divisions but on
the UBM side as well?
Levin: The company is structured in a highly decentralized
manner. We have multiple operating units worldwide and we have a
horizontal structure in addition to the four CEOs. In North America,
there are six direct reports. Elsewhere, CMP Asia reports to me and CMP
Medica reports to me. Where UBM adds value is the allocation of capital
and ensuring and sharing best practices. Third, UBM adds value as an
engine of people development. We invest heavily in developing a cadre
of leaders. Our Business Leaders program is graduating 20 to 25 people.
We like to feel there’s maximum decentralization and autonomy at this
We have structured for each one of them a board—more in the
European sense than in the North American sense—in that it’s a forum
for business needs rather than vehicle for the chief executive to drive
his will into the business.
FOLIO:: Tell us about some of those business needs?
Levin: The move we’ve been making is how to change from a
defensive-posture magazine company to a front-foot forward marketing
services company. That involves moving the culture quite a long way. We
had very strong financial results last year and that trend is
That rebalancing is quite subtle, from control
systems where you think about page counts first to the real
question—depending on which business you’re talking about—what do
registrations look like? What do advance bookings look like? Asking
about advertising is something to ask someone who runs a magazine
business. Three-quarters of our audience is not about advertising,
they’re attending events, they’re buying our services, they’re buying
our intellectual properties.
That’s a profound shift. There is a challenge of communicating
that internally but it’s a lot easier doing that across the four
focused businesses than it was when we were under one umbrella. It’s
easier to do that under guise of new names and new identities.
FOLIO:: With that in mind, what was the motivation for dropping the CMP brand? How does this benefit the new operation going forward?
Levin: To my mind, a brand is something that means something to
its audience. Our audience, in the old CMP world, related to
“InformationWeek.” Our audience related to “EE Times.” Our audience at
no point related to the word “CMP.” Advertisers at some point may have
related to CMP but it was not a brand as far as the audience was
concerned, it was a corporate name that had resonance to the
advertising community. As we have extended the nature of our
relationships, we have kept key relationships with the audience through
powerful brands that are in the market. That could be Black Hat, that
could be Game Developer. They are unchanged.
Now, our approach to
providers and exhibitors is much more tailored around whether they’re
focused on a specific aspect that can be dealt with by a focused-name
company. Or if they have a wider set of needs, those customers can buy
across a wider UBM environment.
We have run a number of assets outside of the old “CMP Tech” and
we’re getting great traction among the major tech companies where
previously we wouldn’t have because of the structure.
When I presented this to customers they said, ‘Great, we like
having a large media partner called UBM, we like the scale, we like to
the combination of scale and focus.’ No other group has the same sort
of structure. Asia is a clear geography and in the largest
market—China—the products carry a local name. We’re all clusters of
products where the infrastructure carries the CMP name and there are no
plans to change that there.
When we changed the cost structure in
June 2007, we gave ourselves the opportunity to take the
decentralization further. That’s not the case with the other examples.
FOLIO: What are some of the logistical issues involved
with positioning the four new units? How much effort and expense is
involved in scrubbing the CMP brand from items such as cards and
Levin: We’ve got a judicious blend of progressive
decentralization. If it can be done locally, it should be. If it should
be done centrally, it will be. With the IT infrastructure—there is no
value in decentralizing that because it just replicates the support and
service costs without any value. With HR, there are some benefits areas
that should remain centralized.
FOLIO:: What are the costs associated with this transition?
Levin: We’ve not quantified it. We’ve been mindful that if you
allow four different groups to do development independently, you may
get additional development costs creeping in. The driver for this was
never the short-term reduction in costs. The trivial costs of
re-branding, business cards, that’s just something we’ve eaten. The
real issue is to drive toward more aggressive and faster revenue
FOLIO:: What are your short-term and long-term goals for this new
structure? What type of financial performance do you see from each
division now and what would you like to see by the end of the year?
Where do you see growth coming from?
Levin: We never laid external goals. It’s worth saying the
profitability of the actual business improved over 50 percent in 2007
and 2006. It had its first underlying revenue growth in years in 2007
compared to 2006 and looking forward we see that stepping up.
group as a whole achieved 5 percent underlying revenue growth last
year. I think the technology market should be faster growing than
average. What is exciting, suddenly we’re getting out of each one of
them a clear agenda of growth and development.
FOLIO:: What is that agenda for each business group?
Levin: It’s quite distinct by group. Each one is coming up with
a set of plans. Look at the first acquisitions—Everything Channel has
completed the acquisition of the former Vision Events business out of
Gartner. In a stroke that has changed that group. The TechInsights
Group has been very fast and ambitious in the way they drove the
business. They will run four or five events in India this year, growing
very quickly out of the box from one event last year.
FOLIO:: What are the specific challenges facing each group?
Levin: Each leader is having to step up to the difference of
being a group president, a group CEO. There is a huge jump in terms of
personal accountability and ambition. With the process of appointing
them we took each one through the opportunity to lay out their
ambitions and their plans for those businesses in a systematic way.
FOLIO:: You’ve denied that this move was in preparation for
selling off the company. However, many observers still say a sale makes
the most sense. What is your response to that?
Levin: It’s no longer a question anyone inside the business asks. I don’t think our customers are asking that.
The right way of looking at it is we’re trying to create a platform for
growth and development of these businesses. We’ve put more than $200
million to work in a series of acquisitions and we continue to look for
acquisitions. At a personal level, as a former CEO of both hardware and
software companies, technology is pretty central to how I think about
the publishing world. When businesses are growing and prospering that’s
a good time to say, where do you need more resources, not how do you
get out of them.
FOLIO:: A year from now, what do you want to see?
Levin: Stepped up, accelerated organic growth with very clear
emergent cultures. I want to see all four groups growing faster but
being ever closer to their customers.
FOLIO:: Do you have a set goal for the next year?
Levin: No. Out of each of the four businesses, we’re getting
much more ambitious, exciting plans. One context for this: inside of
UBM, we’ve done 54 acquisitions worldwide. Not just CMP Tech, which
accounts for just under one-third of that. We’ve got a variety of
different models that serve a specific purpose.
Previously, I led
the acquisition of Institutional Investor for Euromoney, I led the
acquisition of Internet Securities Inc., and common themes keep coming
back. What you want out of these groups is intellectual property.
If you look at Commonwealth Business Media, itself an
acquisiton, it has transformed itself in a very similar way by the
acquisition of OAG Holdings. That business has moved on remarkably
since we picked it up. That’s what we do.
SIDEBAR: What’s in a Name?