Look Back 2006: Month by Month Highlights of the Year’s Biggest Stories
From new product launches to magazine closings, buying to selling, hiring to layoffs, Folio: Alert takes a month-by-month look back at some of the highs and lows that shaped the publishing industry in 2006.
Week of Jan. 1 – McGraw-Hill cuts 500 jobs and consolidates its back-end operations. For its efforts, the company will take a $23.2 million pre-tax restructuring hit;the bulk of which accounts for severance deals.
Week of Jan. 8 – The magazine industry’s two most powerful associations;The Magazine Publishers of America and American Business Media – reveal that together they spend close to $800,000 a year on lobbying efforts. The news stems from an article in The New York Times that uncovered that the MPA paid at least $1.4 million to scandalized-lobbyist Jack Abramoff’s firm, Preston Gates Ellis & Rouvelas Meeds, primarily to lobby against postal-rate increases.
Also, Time Inc. lays off 100.
Week of Feb. 5 – Participants at the sold-out DeSilva + Philips Media Dealmakers 2006 Summit declare that private equity will continue to dominate the M&A market throughout 2006. Prediction holds true as private equity firms snap up VNU, Penton Media, Highline Media, Pfingsten Publishing, Reader’s Digest Association and other publishing companies in 2006.
Week of Feb. 12 – Spin magazine is sold to San Francisco-based Hartle Media for about $5 million, according to sources familiar with the deal. The deal is shocking for a magazine that once sold for $42 million and illustrates another drastic devaluation of a once-revered print brand.
Also, New Track Media, the company media founded late last year by ex-F+W CEO Stephen Kent through a partnership with Boston Ventures, completes its first acquisition, buying Sky Publishing. Terms of the deal were not disclosed.
Week of Feb. 19 – The estimated sales of ABC and BPA audited publications made a slight decline in the second half of 2005. Unit sales were down 0.9 percent to $479 million and retail revenue of $1.64 billion was off 0.7 percent.
Week of March 12 – The announcement of a planned April launch of CMP Media’s new and improved Dr. Dobb’s Journal, also means the shuttering of Software Development, a fact played down in a news release from CMP. Software Development is the fourth magazine closed at CMP in a year. The effort is part of purge made by CMP CEO Steve Weitzner, who took the reins in September 2005 and is heavily focused on expanding the company’s Internet and event offerings.
Also, ABC introduces Rapid Report, a free and optional Web-based service that gives member magazines the option to electronically report circulation by issue within weeks of its on sale date. It also debuts Agent Compliance Evaluation, which will allow the bureau to evaluate the abilities of its member subscription sales agents to support the audit process; and finalizes the criteria for its new and controversial "verified" circulation category.
Week of March 19 – Time Inc. agrees to settle with the attorneys general of 23 states in a case brought against it for automatically renewing the subscriptions of 108,000 of its readers in what was alleged to be a misleading context. Time will pay $4.5 million to cover investigative costs, which will be divided by the 23 states, and anticipates having to pay up to $4.3 million in customer claims.
Week of March 26 – Michael Pashby, the high-profile general manager of Magazine Publishers of America, leaves MPA to seek a job at a publishing company. His position will not be filled, MPA CEO Nina Link said in an e-mail message.
Also, Conde Nast says it’s shutting down the short-lived men’s shopping mag, Cargo. Conde Nast says Cargo, like Fairchild Publication’s Vitals last year, will head to the men’s shopping magazine graveyard following its May issue.
Week April 2 – Post Newsweek Tech Media president David Greene leaves the company after a five-year run. He is replaced by a three-person management team.
Also, the sale of 101communications to newly formed 1105 Media for $75 million clears review by the Federal Trade Commission.
And, Time Inc. slashes 250 jobs.
Week of April 9 – 1105 Media acquires a second company, Dallas-based Stevens Publishing, a seven-title publisher specializing in the health and safety markets. The sale price was not disclosed, but a knowledgable M&A source said it was about $30 million for a company whose revenue is about $20 million.
Week of April 16 – ABC and Laptop magazine are sued by Teletype Co. Inc. for their alleged involvement in a check-swappig scheme that supposedly inflated circulation numbers for Laptop. ABC and Laptop say they’re not guilty.
Also, Time Inc. lays off 26 union workers and closes its Canadian office. The cuts follow a series of staff reductions that began in December when 105 positions were slashed. Another 100 employees were let go in January.
Week of April 26 – Teletype Co. sues PC Magazine accusing it of inflating its circulation numbers. Like the suit it previously filed against Laptop magazine, ABC is once again named as a conspirator in the complaint.
May 1-6 – U.S. Postal Service proposes a postal rate increase that would impact magazine publishers an average of 11.7 percent. The proposal, which is still pending before the Postal Rate Commission, comes on the heels of 2005’s 5.4 percent increase.
Also, Dowden Health Media founder Carroll Dowden agrees to buy back the consumer magazine division of Dowden Health Media from New York-based retail and healthcare publisher Lebhar-Friedman. Dowden sold the magazines to Lebhar-Friedman in the spring of 2005.
Week of May 7 – With observers speculating that Ziff Davis Media may be on the block, the company releases a gloomy first quarter earnings report showing revenue and EBITDA down and an increase in net loss, attributed in large part to the closure of several print magazines and an overall drop in print advertising revenue.
Week of May 21 – Prism Business Media restructures its properties into four divisions and, in the process, eliminated the position of senior vice president Jeff Reinhardt, who had been associated with the company’s marketing and other properties through an 18-year tenure spanning four owners.
Also, Haarlem, Netherlands-based VNU NV is purchased by a consortium of private equity firms for $9.7 billion.
Week of June 11 – VNU replaces all but one member of its Board of Directors with executives from the private equity firms that purchased the company, and said good bye to its CEO at an annual meeting.
Week of June 11 – Debt-heavy American Media Inc., the publisher of the National Enquirer and Star, says it plans to sell off five of special interest titles as part of a strategy to refocus the company on its core brands. The titles for sale include Muscle & Fitness, Flex, Muscle & Fitness Hers, Country Weekly, and Mira!
Week of June 16 – Hachette-Fillipachi’s gory photo magazine, Shock! is yanked from the newsstands of drug stores Brooks Eckerd and Rite Aid just one month after it arrived in stores. The chains say they pulled the magazine following complaints from their customers.
The mag also is being sued for the usage of the cover photograph image which belongs to blogger Michael Yon, who claims he did not give the magazine permission to publish the photo.
Week of July 9 – Penton Media’s stock nearly doubles, jumping more than 65 percent from a close of 26 cents on Tuesday to 43 cents as of mid-afternoon on Wednesday, following the company’s announcement that it is looking for a buyer.
Also, Vibe is Sold; DoubleClick Acquires Klipmart. The new owner has fired much Vibe’s editorial staff as part of the acquisition.
And, Wired News says it has been sold to Condé Nast Publications for $25 million. Wired News was previously owned by Lycos. The deal brings Wired.com and Wired magazine under the same owner after an eight-year separation.
Week of July 16 – In what’s shaping up to be a busy year for M&A activity, two more b-to-b publishing companies, Highline Media and Pfingsten Publishing, are put on the block.
Week of July 23 – Following in the footsteps of rival Elle Girl, Teen People says it will cease publication with its September issue, but continue to maintain its Web presence.
Also, while many publishers continue to shift their emphasis from print to Web, Martha Stewart Living Omnimedia reported a 47 percent increase to $67.4 million in revenue in the second quarter of 2006, driven primarily by growth in the company’s publishing segment.
Week of July 30 – Ziff Davis says it is exploring strategic alternatives, including a possible sale of the company.
Week of Aug. 6 – Former Advanstar CEO Robert Krakoff is named CEO of VNU Business Media. Krakoff takes over for VNU Business Media CEO Michael Marchesano, who was moved to the newly created position of executive vice president and chief transformation officer of the company’s Project Forward.
Also, Cygnus Business Media announces it is no longer on block and that is replacing long-time CEO Paul Mackler with two co-CEOs.
Week of Aug. 20 – Fifty-four percent or 348 of the 654 consumer magazines that report their total paid, verified and analyzed non-paid circulation numbers to the Audit Bureau of Circulation reported decreases for the first six months of this year.
Also, David Calhoun, a 27-year veteran and executive at General Electric Company, is named chairman of the executive board and CEO of VNU.
Week of Aug. 27 – Karlene Lukovitz, vice president of communications for BPA Worldwide since 2003, says she is leaving that agency to set up an editorial and consulting firm for print and electronic media companies.
Week of Sept. 10 – Time Inc. announces it will sell 18 of its magazines from its Parenting and Time4Media groups. The move is part of a greater effort by the publisher to focus on its core brands and digital media offerings.
Prism Business Media, the New York-based b-to-b publisher, eliminates five positions in its Stamford, Connecticut, marketing department, including the position of director, held by Cheryl Richter, according to a staff memo obtained by Folio: Alert Thursday.
United Business Media sells a portfolio of non-core, consumer and enthusiast media assets, including Guitar Player, Bass Player, Pro Sound News and Systems Contractor News, from its U.S.-based subsidiary CMP Technology to The Wicks Group of Companies LLC for $47 million. The portfolio is comprised of titles that derived 85 percent of their 2005 revenues from print.
Week of Sept. 20 – Banta Corporation says it plans to eliminate 500 jobs by consolidating its five printing divisions into two and selling or closing five of its printing facilities. It also plans to borrow money to pay a special dividend on November 21 of $16 per share to shareholders of record on November 10. The moves come one month after Banta rejected a $1.1 billion unsolicited bid made by Stamford, Connecticut-based printer, Cenveo Inc.
Week of Oct. 1 – Bruce Morris, longtime president of Source Media and its predecessor company, Thomson, leaves the company in an apparent restructuring. An industry source told Folio: Alert this week that Morris’ contract was not renewed.
Week of Oct. 8 – CurtCo owner Bill Curtis says he’s taken his company off the block because it failed to garner any bids above 12X-EBITDA. Curtis had been seeking a $500 million sale price on his company, which has annual revenues of roughly $100 million and EBITDA of a reported $20 million.
Week of Oct. 22 – The 32nd annual Folio: Show opens in New York with more than 2,200 media executives and professionals expected to descend on the New York Hilton for the event. Attendance is about 33 percent over last year’s event, which itself boasted a 27 percent increase in attendance. The number of exhibitors is up 20 percent.
Also, American Media Inc. says it will one again be unable to meet a financial restatement deadline set by the company’s note holders. AMI was to file a restatement on its third quarter 2006 financial statements and a 10-K document Oct. 31. The deadline has been put off twice already this year. AMI asked its note holders to extend the deadlines on both the third quarter financials and the 10-K filing to February 15.
Nov. 2 – Penton Media, the once troubled trade publisher, is sold to Wasserstein & Co., and will be merged with Prism Business Media, creating a new b-to-b giant, with revenue nearing $500 million.
Also, less than a month after rejecting a $1.2 billion buyout offer from Stamford, Connecticut-based Cenveo Inc., Banta Corp. agrees to be acquired by RR Donnelley & Sons for $1.3 billion or $36.50 per share after the special $16 per share dividend declared last month by Banta.
Week of Nov. 5 – Wind Point Partners of Chicago acquires both Highline Media and Pfingsten Publishing for about $90 million and $100 million, respectively.
Also, VNU Business Media says it plans to restructure its company into "market-focused" groups. Under the plan, the company will now be broken into six operating groups and brands to be overseen by five senior vice presidents. The changes will take effect January 1.
And, Kable Media Services Inc. unit of Amrep Corp. says it will buy Palm Coast Data Holdco Inc. for about $92 million. Kable and Palm Coast clients received the news about the acquisition in the form of an email.
Week of Nov. 12 – In the biggest consumer deal of the year, Reader’s Digest Association agrees to be bought for $1.61 billion or $17 a share by an investment group led by private equity firm Ripplewood Holdings LLC.
Also, Ziff Davis says its game group will discontinue the publication of Official U.S. Playstation Magazine following its January issue. The company said the print-only property no longer fits into its "strategic vision" for an "integrated media network" heavily focused on digital platforms.
Week of Nov. 19 – Red 7 Media announces the launch of Magazine Event Strategies, a paid-newsletter providing information to marketers, publishers and top management at consumer, business, association, and special-interest publishing companies that use live events as revenue-generating initiatives. Red 7 Media is the parent company of Folio: and Folio: Alert.
Week of Dec. 3 – 1105 Media purchases Post Newsweek Tech Media from The Washington Post Co. The sale includes the Post Newsweek’s four magazines Government Computer News, Defense Systems, Washington Technology and Government Leader, as well as its online products and FOSE trade show. Terms of the transaction were not disclosed.
Week of Dec. 10 – A federal grand jury in Connecticut indicts magazine paper producer Stora Enso North America for allegedly participating in a price-fixing conspiracy involving the sale of magazine paper in the U.S. between August 2002 and June 2003. Stora Enso is the second-largest magazine paper producer in the world.
Also, postal reform passes, finally.
Week of Dec. 17 – Time Inc., VNU announce layoffs as both continue to refocus their brands.
Also, Primedia says it will classify its education segment, home to the struggling Channel One Network, as a "discontinued operation" in the fourth quarter while it explores strategic options for the assets of the segment. The company did not say what the strategic options would entail, but speculation is that it is looking to sell the segment.
And, on the heels of its $1.3 billion acquisition of Menasha, Wisconsin-based Banta Corp., R.R. Donnelley & Sons says it has agreed to acquire another Wisconsin-based printer, Perry Judd’s Holdings Inc., for $176 million.
Week of Dec. 24 – Stamford, Connecticut-based printer Cenveo Inc. says it plans to purchase and merge with Cadmus Communications in a $430 million deal.