IT COULD HAVE BEEN THURSDAY AT 5 P.M.: A major holiday weekend is approaching and that usually means one thing: American Media Inc. uses the moment to issue its latest financial results. The publishing company did so on Monday, and also shed a bit more light on former executive vice president and chief editorial director Bonnie Fuller’s pay package. As of March 31, AMI had total operating revenues of $490.8 million, up from $470.9 million a year ago. The company said the increase was primarily due to “favorable results in advertising revenue.” Meanwhile after two straight years of operating losses, the company had operating income of $67 million, compared with last year’s $253.7 million operating loss. The turnaround is also due to growth in ad revenue, as well as cost reductions implemented by the company. Net losses also narrowed, to $61.9 million from $343.8 million.
But not everything is rosy: the financial statement reiterates that if AMI does not refinance its 2009 notes on or prior to Feb. 1, the company may be required to liquidate assets, seek protection from creditors or it may be unable to continue as a going concern. In addition, as of March 2008, the company was carrying $1.1 billion in outstanding debt.
This story first appeared in the July 1, 2008 issue of WWD. Subscribe Today.
Fuller, who left AMI in May and was one of its highest-paid executives, had total compensation for the 2008 fiscal year of $2.4 million, compared with $2.1 million in 2007. She made substantially more than chairman and chief executive officer David Pecker, who had total compensation in 2008 of $1.6 million, down slightly from $1.66 million a year earlier. His contract is up in April 17, 2009, although it could be extended.
Upon her departure, Fuller agreed to serve as editor at large of Star and as a consultant to AMI. The report said that assuming a termination date of March 31, she would have received a $2 million severance package and approximately $17,400 in reimbursements. But what did she actually get? Well, since Fuller didn’t resign until May, it looks like the company might be off the hook in revealing her actual severance for at least another reporting period. — Amy Wicks
NO HOME: Blame the housing market crisis, the dip in advertising impacting every magazine or any one of myriad reasons, but Vogue Living will not publish a scheduled second issue this year. The Vogue shelter spin-off published a spring issue and had planned to produce a fall one, but a Vogue spokesman confirmed Monday that the fall issue has been nixed. “We decided earlier in the year that, given the current ad climate, this wasn’t the time to roll out a second issue,” he explained. However, said the spokesman, a spring 2009 issue is still under consideration. In all, Vogue Living, which executives have insisted since its inception was not a launch title, has had three issues. The magazine had a 500,000 rate base, including 300,000 copies that were polybagged to Vogue subscribers with household incomes over $100,000, or a net worth of over $1 million, or a home valued at more than $500,000. The first issue in November 2006 had 134 ad pages; its second, a year later, carried 34 percent fewer, at 85 pages. The latest issue, in April, carried 48 pages. But Vogue Living, published by WWD parent company Condé Nast, hasn’t been alone: according to Mediaweek, the shelter category has slid 5 percent in ad pages through July of this year. — Stephanie D. Smith
THEY USE THE WEB OVERSEAS TOO: Wired magazine is on its way back to London. After being published for two years in the mid-Nineties by The Guardian newspaper as a supplement — before Condé Nast bought the West Coast magazine — Wired is making a fresh start under Condé Nast International, which is planning to launch a U.K. edition during the first half of 2009. The company is also launching the magazine (and Web site) in Italy next year. Riccardo Luna, editor in chief of Il Romanista, has been tapped as editor of the Italian edition and David Rowan, formerly editor of the Jewish Chronicle, will be editor of Wired in London. — A.W.
LET’S MAKE A DEAL: Whether or not Condé Nast is buying Rolling Stone or Us Weekly — depending on whether you watch “Charlie Rose” or read The New York Post, respectively — one thing is clear: Jann Wenner has been shopping his titles around town, and has been for a while.
But the media mogul is likely to hold onto his baby, Rolling Stone, and it’s in the middle of a multimillion-dollar lawsuit against R.J. Reynolds about an ad for Camel cigarettes in the magazine last November, hardly appealing to a buyer. So the two most likely titles on the block are Us Weekly and Men’s Journal, observers said, just before warning they hadn’t heard of any deal in the works and that it’s not the best time to try to sell two magazines for northwards of $700 million. First, the shrinking economy is crunching most publishers’ bottom lines as advertising declines, so gathering up the cash for acquisitions may not be a firm’s top priority. And if a publisher wanted to borrow money to buy Wenner’s magazines, good luck — the credit markets have all but dried up.
But say there was an interested buyer willing to spend $700 million-plus for the titles. What would they be getting? Well, two magazines that face significant challenges. Us Weekly has had a remarkable run in the past few years, growing in circulation to 1.9 million and regularly selling over 1 million copies on newsstands a week through 2007. But its popularity may have peaked: though paid and verified circulation between July and December 2007 grew by 10 percent, the title missed rate base on more than half of its issues for this year through May 12, and single copy sales have settled to around 875,000, according to Audit Bureau of Circulation figures. Ad pages for the title are also getting squeezed, down nearly 10 percent to 916 through June 30, according to Media Industry Newsletter. Men’s Journal, meanwhile, teeters on profitability from year to year, and while ad pages are up 10 percent through July, the magazine, as do others in the business, often discounts its pages.
High-level executives at Condé Nast remained skeptical about a potential deal between Wenner and 4 Times Square, some speculating the chatter was put out by Wenner to drum up interest in a potential deal. The mass market, celebrity gossip-driven Us Weekly is an unlikely fit into the upscale Condé Nast portfolio, observers said, and Men’s Journal would be the fourth men’s magazine after GQ, Details and Men’s Vogue.
Nevertheless, many believe Wenner is keen to make a deal — for the right price. Several sources familiar with Us Weekly’s financials believe the price tag of $750 million is lofty, but that anything over $600 million is feasible. Sources close to Wenner said he’s been meeting with his financial advisers to discuss a sale. Last year, he reportedly had talks with Hearst Magazines to divest Us Weekly and Men’s Journal, but a deal never came to fruition.
“This [shopping around the titles] is not a new idea. It dates back a couple of years,” said a source close to Wenner. “He’s as much in awe over the huge success of Us Weekly as outsiders are. It’s not really his world, not like Rolling Stone, a world he instinctually understands. He’s always been suspicious of Us Weekly’s success, and wondering how long it will last.”
As for now, the official word from spokespersons for Wenner and Condé Nast is that the rumors of a sale is just that. A spokesman for Wenner said, “Wenner Media and its properties are not for sale,” and, speaking generally, said, “There have been no talks.” A spokeswoman for Condé Nast said, “We do not comment on the subjects of acquisition. We have no comment.” — Irin Carmon and S.D.S.
ALL ONE HAPPY FAMILY: Vanity Fair is adding two names to its prodigious number of contributing editors, both from New York magazine: Vanessa Grigoriadis, who won a National Magazine Award in 2007 for a profile of Karl Lagerfeld in New York, and Joe Hagan, who wrote high-profile stories on media and finance. Both are expected to keep writing for New York, though it couldn’t be learned by press time whether Grigoriadis will shed her Rolling Stone contributing editor gig. — I.C.