Merger of two glossy magazine printers adds to media upheaval
The executive upheavals that dominated magazines in 2018 are likely to simmer down in 2019 — even if the changes whipsawing the industry will continue unabated.
Adding to the woes next year will be the pending merger of two giant printers. Quad/Graphics is planning a $1.4 billion acquisition of LSC Communications, combining the two biggest printers of glossy magazine stock.
Changes in the executive suite unfolded with dizzying speed this year.
As recently as February 2016, a panel at the American Magazine Conference in New York featured the top executives from five of the then-most dominant companies in the business: Joe Ripp at Time Inc., Bob Sauerberg at Condé Nast, David Carey at Hearst Magazines, Maria Rodale at Rodale and Steve Lacy at Meredith. It took slightly longer than two years, but not one of the five is in the same job today.
Two of the companies on that panel have disappeared entirely: Time was absorbed into Meredith and Rodale was absorbed into Hearst — both deals being completed within weeks of each other in January.
Condé survives but, had the family not sold its Bright House Holdings in 2016 for $11.4 billion to Charter (now known as Spectrum), there might be even more pressure on Condé to fix things immediately — or be sold. Even billionaire families don’t like to lose money indefinitely.
In the change that saw the ouster of Sauerberg at domestic Condé Nast just last month, Jonathan Newhouse from the London-based international division was tapped as the chairman of a new version that combines domestic and international.
A search is underway for a CEO to oversee the merged operations but, when found, that person will not report directly to Jonathan Newhouse. The new CEO will answer to a family-controlled board of directors instead. Steven Newhouse, son of family patriarch Donald Newhouse, is seen as wielding considerable behind-the-scenes influence, even if it was Jonathan, the first cousin of Donald, who was given the chairman’s title for the new Condé Nast.
Losses estimated at $120 million last year in domestic Condé were to be cut in half this year — but as the red ink continued to flow, the five-year overhaul plan was scrapped after one year and Sauerberg was sent packing.
It probably did not help that one of Condé’s big money earners, Vanity Fair, tapped Radhika Jones from the New York Times to take over. So far, her arrival has been a buzzkill with declining newsstand sales and slumping ad sales.
(Although in fairness, after taking over from Tina Brown in the early 1990s, Graydon Carter saw ad pages and circulation drop dramatically before he hit his stride and emerged as a legendary editor.)
Jones actually may be vying with newish Glamour Editor-in-Chief Samantha Barry for bumpiest start of a new editor regime. Barry recently oversaw the closing of the monthly print edition of Glamour, which in the 1990s was still the most profitable magazine in the stable, outselling even Vogue.
In contrast to the red ink at Condé, Hearst Magazines — publisher of Cosmopolitan, Esquire Harper’s Bazaar and Elle — is expected to make about $265 million this year, down from the estimated $275 million in profit a year ago.
Digital is booming for Hearst, which was why Troy Young, the digital chief, was tapped to replace David Carey, who is going off to Harvard to study new philanthropic ideas. He will keep a connection, with the title of chairman of the magazines group.
Challenges abound. Skeptics point out that, when Young’s past company, Say Media, tried to transform from a tech software outfit into a digital media one, it flopped. Maybe he learned what does not work.
Meredith’s Lacy, also on the ill-fated 2016 panel, has since moved up the ladder to CEO of the whole Meredith operation, which includes local TV stations. Tom Harty took over the magazine unit and then became president and chief operating officer — Lacy’s No. 2.
After buying Time Inc. for $1.8 billion in cash and the assumption of $1 billion in debt, Meredith surprised most observers by raising $340 million from the selloff of Time and Fortune this year.
Less certain is the outcome of Sports Illustrated. Former NBA star Junior Bridgeman has been flagged as the front-runner to acquire it, but he has so far been unable to close the deal with the $150 million in cash Meredith wants as it strives to raise $500 million by selling the orphans. Money, also on the block, is expected to fetch only about $10 million, sources say.