A seemingly done deal to sell W magazine stands a chance of falling apart.
Although the Condé Nast glossy only a couple of weeks ago was said to be very near being sold to the operators of design-centric Surface magazine, with papers all but signed, the deal could now be materially different or even fall through, sources now tell WWD.
The hold up was initially thought to be the sale price, with Surface trying to drive down the purported price tag of between $7 million to $8 million. But since a WWD report on the deal and the parties involved, the professional history of Surface chief executive officer Marc Lotenberg and his purported financial backer Magna Entertainment are said to have become an issue for some staffers.
One such is W’s longtime editor in chief Stefano Tonchi, who initially supported the deal but is said to be no longer interested in going forward with a sale to Surface, which has turned off some of his higher-profile staff as well. Unwilling staffers might be welcome to a buyer under different circumstances, but for W, Tonchi in particular is important to the survival of the brand at its current status. He is the face of the magazine and generally well liked in the fashion community, pulling in ads and high-profile covers and contributors that an outlet like Surface would have a hard time garnering without him. Yes, they could certainly get someone else to do the job, but Surface would be hard pressed to get someone with Tonchi’s clout.
It’s entirely possible that Condé executives, said to be somewhat frustrated at how long it’s taken to sell W (Adrian Cheng’s C Ventures was a front-runner before Surface), end up selling the magazine to Surface anyway, without all of the staff on board. Some staffers are also thought to be more ambivalent about the potential sale and willing to stay on. Talks on that front are ongoing, as Surface continues to work on financing, but should most of W’s staff come out against the sale, it would very likely put the sale in real jeopardy. As it stands, W is operating as usual at Condé, already having gotten its yearly budget. Fall issues are thought well into production.
A Condé spokesman declined to comment and a representative of Surface could not be reached.
Until second thoughts came about, Surface, which is a quarterly print publication but has shifted online to focus on lists, e-commerce and travel (read: traffic drivers), was poised to create a new holding company for W and let it maintain a level of operational independence. But some people have become wary of going into business with Surface and even Magna Entertainment. Some staff worried about cuts and operations post-sale, even if they were to sign on as part of the deal. Surface has gained a less than glowing reputation in media circles in recent years as an operation with very high turnover (there were some cuts two weeks ago and nearly all of its editorial employees left last year with other cycles before that) and a difficult workplace culture purportedly led by Lotenberg. Industry chatter, as well as public workplace reviews online, have singled out the ceo for issues within the relatively small operation.
Lotenberg became the ceo of Surface in 2012, when it was sold by Sandow Media in an unannounced deal to Lotenberg and Eric Crown, who cofounded the business IT company Insight Enterprises and in 2014 the magazine was put under Surface Media LLC. Although Sandow only owned Surface for a year, it in 2017 took up a minority stake in the operation through another deal. Sandow had previous dealings with Lotenberg when it bought his first troubled media venture 944 out of bankruptcy, driven in part by a number of lawsuits.
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