Condé Nast is at last becoming one global company — and Jonathan Newhouse will be its chairman. As part of the process, the shrinking publishing company is on the hunt for a global chief executive officer — and it plans to push out current Condé Nast ceo Bob Sauerberg to help clear the way.
Newhouse currently is ceo and chairman of Condé Nast International. He will give up the ceo’s title at CNI to become global chairman of the entire group, to operate as Condé Nast, and the publisher said it is looking outside the company for a ceo with “global experience.” Both Newhouse and Sauerberg will continue in their current roles until a new ceo is found, according to an internal memo from the board. Sauerberg will even continue to have a seat on the board of Reddit, which is owned by Condé parent Advance Media.
Wolfgang Blau, president of CNI, is also remaining in his position, and the company on the whole is planning, for now, to continue being headquartered in New York and London — where Newhouse is based. The search for a new ceo to lead a newly combined company is expected to take three to six months, but it’s unclear if anyone has been approached yet. Sauerberg and Newhouse could not be reached for comment. Blau took to Twitter to get in front of any talk that he could move up from his seat as president, writing: “I will not move to New York and will not apply for the global ceo role. I am happy with what I am doing here and thankful for the opportunity to support our global growth and the future global ceo from here in London.”
In the memo, Newhouse noted Sauerberg’s work over the years has included the launch of Condé Nast Entertainment, a digital production studio that just got a new president after a six-month search, and said he “helped steer Condé Nast through a time of enormous transformation in his distinguished 18-year career at the company,” which included five Pulitzer Prize wins and a number of other awards and nominations. Sauerberg also oversaw the recent addition of OTT channels for Condé brands and the purchase of CitizenNet, a data science company, which took a bite out of revenue for the year. The fourth quarter is said to be on the way to exceeding a set goal and the year may end up with the company profitable again after several years of deep losses, but the fiscal year doesn’t end until January and clearly, a combination of CNI and Condé U.S. will see a reduction in costs going forward.
The two halves of Condé being combined officially into one entity is something the company has slowly been moving toward this year. But the exit of Sauerberg seems likely tied to an inability to get Condé on steady ground over the last few years; the company may break even this year, but it’s lost about $250 million over the previous two. Sauerberg became president a few years after the 2008 recession and then ceo a few years after that. Unfortunately for him, his eight years at the helm of what was once the most glamorous magazine publisher in the world saw even more changes as digital and social took over reader habits. Condé was slow on the uptake — choosing to drastically cut costs by eliminating staff, closing a few titles and selling others — including WWD to current parent Penske Media Corp. — without a clear strategy as to how to overhaul the company’s revenue streams into that of a digital publisher, not the print one it’s been for a century. (It was still cheering on print ad revenue as late as 2014.)
Cuts to staff and operations are all but certain to continue with the Condé combination under way, although none have been formally outlined and plans will depend on the new ceo. Employee losses already number in the low- to mid-hundreds, according to an estimate based on WWD reporting over the years and even the previously untouchable Vogue has this year been forced to slim down and reduce its budget by putting high-profile and longtime staffers on contract instead of on salary. It’s only the latest to have the hammer lowered. Creative, copy and research teams have been combined and shrunk across the company, while big-time and well-paid editors like Keija Minor of Brides, Graydon Carter of Vanity Fair and Cindi Leive of Glamour all resigned last year, and were succeeded by younger, and much lower-paid, ones. There has been hiring in other areas, like back-end operations and video, but the roughly 3,000 employees Condé employs is likely to shrink.
Sauerberg tried a few months ago to publicly shift away from the company’s apparent strategy being little more than cuts when he outlined in an August staff memo and briefly to the Wall Street Journal his plan to get the publisher profitable by 2020 and add $600 million in new revenue. Chief among his plans was to reduce Condé’s reliance on advertising as a revenue stream — something other publishers have been doing in earnest for many years and that Condé was supposed to have been pursuing since the Great Recession, when ad pages shrunk drastically for it and everyone else.
There were some subsequent peaks that made maintaining the status quo possible, but when Sauerberg in 2010 became Condé’s president, then-ceo Charles Townsend said he was being charged with “leading the company in the creation of a new business model,” as a shift by readers and advertisers from print to digital was becoming the norm.
When Sauerberg became ceo in 2015, he said he’d “never been more optimistic about our company and business” — but more declines came, with more than a dozen magazines shuttered and several taken out of print entirely, most recently Glamour, once known within Condé as the company’s “cash cow” given its lock on beauty ads and placements.
Although Sauerberg said in August that his goal was to bring advertising down to 50 percent of revenue from its current 70 percent share through investments being made in “a data platform, an events business” and a scale-up of its digital business to make up the difference, these, too, are largely plans that have been under way for several years, with slow returns.
Now it will be up to Newhouse to drive Condé’s strategy — along with whomever is selected as global ceo. (The company did not say whether that would be a position based in London or New York.) A few other things became clearer in the changes the company revealed Tuesday. First, Pamela Drucker Mann, the publisher’s current chief revenue and marketing officer who insiders speculated in recent weeks had been angling for a big promotion, won’t be getting the number-one or number-two spot, since Blau is staying on and the company specified the need for global experience. Secondly, Condé has at last done what had long been expected: tapping Jonathan Newhouse to take on the role that had been made legendary by the late S.I. Newhouse Jr., who died in 2017. There are still plenty of other Newhouses helping as well: Jonathan’s cousin, Stephen, is copresident of Condé parent Advance Publications, along with Stephen’s father, Donald. It is still unclear to whom Jonathan will report to in his new role as chairman of a global Condé Nast.
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