Private Equity’s Impact
How has private equity changed the magazine industry? Plenty. Here are some of the things I’ve seen. ﾕ Anyone who’s attended American Business Media spring meetings knows one way. Ten years ago, the meetings were dominated by guys with their last names on their companies. They were alpha-male types: engaging, opinionated, smart, and they stayed all night at the Tuesday evening social, and smoked cigars after the band stopped. Now, ABM spring meetings are half publishing operators and half bankers. They focus on business, not socializing. The sessions are half full as the real action occurs in the small clusters of intense people in the hallways and bars. That’s neither good nor bad, just different. ﾕ Another interesting PE-related development is the phenomenon of second chapters, of both careers and companies. I can think of a half dozen people immediately whose careers took new and interesting directions because of private equity. Roscoe Smith at Agent Media and Charlie McCurdy at Apprise Media come to mind. ﾕ Private equity proponents can say what they want about stability, but at the staff levels, all this buying and selling freaks people out. Even if there were no staff and management changes after a transaction;and there always are;you lose six months to a year of productivity because organizations are paralyzed by uncertainty. You can’t do anything major during the sale process and you need six months afterward until a new (or existing) direction can be implemented. ﾕ Private equity is an avenue for wealth among publishing operators. I have friends, people who once were close to being peers, who hooked up with PE, their companies did well and now they possess more money than perhaps they themselves ever thought they would. ﾕ Private-equity means measurement. I’m not sure what it was like being a sales manager before the age of private equity. Maybe the importance of ﾑmaking the number’ was just as intense. I can tell you that now, from what I see and hear (my company is not involved with private equity), it is relentless. Your day-to-day world is nearly consumed by analyzing numbers, and if you miss, it gets ugly. ﾕ Another private equity fact: Companies that are flipped often, and have poor management, can rot. I’ve seen it. First they get paralyzed. Then they get downsized. Then key people are let go or leave. And what’s left is an empty shell where only the weakest performers remain at hollowed out brands. But it would be wrong to say that PE alone causes that. PE is not necessarily good or bad for the magazine industry. Just different.