NEW YORK — Two-and-a-half years after purchasing Internet media company About Inc. for $690 million in stock, Primedia said on Thursday that it would “part ways” with its chairman ceo, Tom Rogers. In his place, the company named Charles McCurdy interim ceo and Dean Nelson interim chairman.
This story first appeared in the April 18, 2003 issue of WWD. Subscribe Today.
Rogers is the latest in a string of executives at public “old media” companies who have taken the fall for buying into the dot-com market shortly before the bubble burst and the recession hit.
Primedia had long argued that purchasing About Inc. was a solid business decision. Besides owning large consumer magazines like New York and Seventeen, Primedia owns hundreds of special interest and B2B titles. About.com had made its name doing “topic-specific guide sites” that were aimed at singular — and often quirky — interests, leading the company to think they would be a good match to integrate.
But while About.com had been one of the most heavily trafficked search engines at the beginning of the millennium, it never found an advertising model and the purchase sent Primedia into financial disarray. A $500 million purchase of Emap USA’s magazine portfolio made the cash situation even worse.
The stock went through the floor and the company found itself furiously unloading assets as a way to pare down its $2.5 billion debt. In 2001, the company sold its Bridal magazines to Condé Nast, Chicago magazine to the Tribune Company and its American Baby Group to the Meredith Corp..
Seventeen, its largest consumer title, is currently in the middle of a very public auction, which sources at the company and in the buyers circle have described as disappointing. The company’s unofficial asking price was believed to be about $200 million, but potential buyers said bidding was unlikely to exceed $125 million.
As the company’s stock plummeted in late 2001 and 2002, Rogers’ relationship with the board began to deteriorate. When his contract came up for renewal this week, the board decided it was time for a change.
While there was a sense of relief among company editorial staffers who found Rogers meddlesome (particularly at New York magazine) there was also a feeling that owner Kohlberg Kravis Roberts & Co. was also responsible for Primedia’s wrong turn. About and other the disasters, they argued, were the results, in part, of KKR’s instructions.
“[KKR] is the one who pissed away $2.5 billion,” said one former executive at the company close to Rogers. “KKR was working on the company at the same time Rogers was.”
“He was hired [by KKR] because he was gung ho about synergy between old media and new media,” said one high-level editor in the company’s magazine division.
The interim ceo, Charles McCurdy, helped found Primedia and had been president before replacing Rogers. A Primedia spokesman said an executive search firm had already been hired to recruit a permanent successor. The interim chairman, Dean Nelson, is the ceo of Capstone Consulting, an outside firm that works exclusively with KKR.
Primedia’s stock closed up 5 cents Thursday at $2.85. Its high in early 2000, shortly before the purchases of About and Emap, was $34.88.