Everyone’s Selling, but Is Anyone Buying?
W may have a surprise buyer in the wings, but there are many more media brands in need of a savior.
Kali Hays
WHO WANTS TO BUY A MAGAZINE?: If there’s anyone out there who’s been dying to get into media, now’s the time. The market is awash with magazine brands to buy and it seems there’s something for almost any taste, from fashion to finance to sports.
This year alone, nearly 20 media web sites and magazines have been put up for sale, with no official sale deals as of yet. Freshly added to this group are Condé Nast titles W, Brides and Golf Digest, according to almost simultaneous Wednesday reports from The New York Times and the New York Post. Condé Nast, which in April flatly denied to WWD that anything was happening with W or Brides, declined comment Thursday.
It’s little surprise that those titles are being pushed out — talk of Condé cutting ties, in one way or another, with Brides and W have been
frequent. Just last month sources told WWD that one strategy being considered was the outright closure of W, while Condé is known to have wanted to get rid of the magazine for at least the last four years.
But it appears there’s at least one possible buyer of W lined up already: None other than Stefano Tonchi, the title’s editor in chief since 2010. He’s said to be talking with potential investors in an effort to buy the 47-year-old fashion magazine founded by the legendary John B. Fairchild and run it independently. Operating without the overhead that comes with simply being a Condé Nast title would surely free up a lot of W’s profit, which is said to be losing money but has received little to no investment from Condé in several years. One source noted that Condé, in recent years at least, picks only a few titles each year to actually invest in as part of its budgeting.
Another source said the sale of all three Condé titles could be wrapped up in as little as two or three months, possibly giving the company a year-end cash injection that’s likely much needed.
Small wonder that budgets are so tight, considering Condé’s revenue has been on the decline for years and it last year saw losses of $120 million, according to the Times report, on top of reported losses of $100 million in 2016. It seems like a sell-off of the titles is one of the few paths to cash the company has, as ad dollars continue to decline across the industry. According to the Association of Magazine Media, print ad spending among the 50 largest advertisers fell by nearly $420 million last year.
Yet another hurdle for Condé is that it’s got competition in the magazine sale race, which has some stronger titles on the block.
Meredith was first to go the sale route early this year with its decision to carve out Time, Sports Illustrated, Fortune and Money within a few months of closing its acquisition of Time Inc. While the sale of those titles is supposed to be winding its way to a
close by fall, forward motion seems to have slowed, with employees of those publications left wondering what will become of them. There’s been talk that
Meredith’s asking price for the titles is simply too high — initial reports bullishly predicted the publisher was seeking $100 million for each magazine — so negotiations could be taking longer than initially thought.
And it’s not only print magazines up for grabs. Last month came
Univision’s decision to try to off-load the 11 sites it acquired from the Gawker bankruptcy and redubbed Gizmodo Group, including popular sites like Deadspin, Jezebel and Lifehacker, along with The Onion and its sister site Clickhole, which are in their own division. The Gizmodo sites seemed an odd choice for
Univisionand some ended up a little
worse for the wear. Univision’s
trialswith its
digital media expansion were well-documented in a 7,000-word story in May from its own Special Projects Desk, also a part of Gizmodo and now for sale, that dove into the company’s private equity debt (deepened by the Gizmodo deal), executive departures and waves of staff cuts.
Univision seems eager to rid itself of the sites and refocus on its core assets of TV aimed at Hispanic audiences, with industry sources saying the company is willing to let go of the sites as a group or in pieces for less than the $135 million it paid for them in 2016.
The selling of all these magazine titles and web sites, which appear to have at least some value on the surface and could possibly be salvaged if invested in properly, is also a sign of how the media industry has changed. Boston Consulting Group for many months has been inside Condé, which had previously had a long consulting relationship with McKinsey & Co. (so long that executives at the profligate publisher would joke McKinsey had taken up permanent residence there) and title consolidation may be the consultant’s go-to strategy for strapped media companies. Univision, another BCG client, went the same route in deciding to sell Gizmodo.
One industry source noted that at one time, not too long ago, Condé was “a family business,” being owned and operated by the Newhouse family and also managed to be a preeminent magazine publisher with only one true rival in Hearst.
“Now it’s a corporate business,” the source added. “You start having BCG guys running around there, it’s a different place.”
Obviously, it’s a new era for media, and certainly one at Condé, where hardly a day goes by without another longtime senior editor
heading for the exit (voluntarily or not). Also notable is the seeming lack of front-facing marquee editors at the titles, which, save for a current few like Anna Wintour, David Remnick and Tonchi, have gone largely unmentioned, reinforcing a sense that operating a magazine is not what it used to be. Certainly, it is less lucrative for publishers and their once highly paid editors.
