Since the end of June there has been a steady stream of CEO changes at prominent magazine companies.
Behind the Wave of CEO Departures
In June, Russell Denson lost his job as CEO of Gruner + Jahr when that company was acquired by Meredith. In August, Stephen Kent left F+W Publications when it was sold to ABRY partners. In September, Gary Marshall left CMP Media and was replaced by Steve Weitzner. In October, Kelly Conlin left Primedia amid a rare display of public finger pointing. And last week, Jim Casella moved out of the top operating role at Reed Business, one of the country’s top two or three b-to-b media companies, taking on a new role as vice chairman for expansion into international markets.
While the circumstances behind each change are unique, it’s still a fact that the turnover rate in the last several months has been extremely high for publishing company CEOs. The question is why. And the answer tells a lot about the state of magazine publishing, and the challenges it faces.
The truth, many observers say, is that the magazine industry is a business undergoing profound change, and that managing the "legacy" side, where most of the revenue comes from, as well as the emerging media side, is extraordinarily tough.
"Magazines have not been able to benefit from the overall economy as much as people expected," says Tom Kemp, a managing director at Veronis Suhler Stevenson and former CEO at Penton Media, who left that company in 2004. "It’s still a very challenging environment and there are no easy answers."
One answer is new direction: "Changing markets need different managers," says William Pecover, CEO of Haymarket Media. "Everyone talks up magazines, but pages are flat across all markets in the 4th year of a recovery. New revenue streams sometimes need new direction."
Kemp;who knows from firsthand experience;says that CEOs themselves get tired from fighting what at best is a hold-even battle. "And then the shareholders or board of directors decides that they need to make a change at the top, because someone else may have a magic bullet."
Pecover concurs: "Investors should be nervous, because many of them have recently overpaid to take advantage of a rising tide that will no longer float all boats," he says. "The media market has changed dramatically, and many traditional companies can’t cope."
David Nussbaum, CEO of Penton Media, says that the wave of CEO turnover may suggest an evolutionary shift. "Of course there are CEOs suited to run a publishing business, and there are others suited to run a multi-platform, delivery neutral, community oriented business," he says. "B-to-b media companies are looking for the latter. There is no doubt that finding senior execs who are Internet savvy, and Web passionate, as well as those who understand the content and events business;is not easy, but that is likely the profile that many companies are searching for."
Others think b-to-b media has it easy by comparison. "Is CEO turnover really any higher than normal?" asks Ascend CEO Cam Bishop. "I would argue that it’s not. It only seems that way because a couple of high-profile changes occurred close together. I’ve seen Wall Street Journal stories that say the job life expectancy of major company CEOs is around three years. If that is true, I’d say b-to-b CEOs tend to survive much longer than broad American-company norms."