W magazine is on the cusp of getting a new lease on life in media with its acquisition said to be imminent, but what it will look like under new ownership is in question.
After being on the market for almost a year, one of three titles Condé Nast decided to sell off, a deal fronted by design-centric Surface magazine is said to be close. The price is thought to still be around $8 million, as first reported by WWD, but details are still being negotiated, meaning any terms of a contract could change, including the price. Buyers for Golf Digest and Brides have also been found in recent weeks.
The shape of W post-Condé Nast is likely to be much different, however, should the deal come to fruition. First, W (founded by the legendary John B. Fairchild as a sister publication to WWD) is expected to be part of an entirely new holding company and operate more as an independent outlet than as a direct subsidiary of Surface. W’s current editor in chief Stefano Tonchi, who’s been leading the magazine since 2010, is expected to continue with the title, possibly in an expanded role that will include leadership of W’s expansion in digital media. Although Surface magazine is on a quarterly print schedule, it’s thought that W will remain on its current print schedule of eight issues a year.
While W’s full-time editorial staff of roughly 20 is expected to come as part of the deal, there is worry that the purchase will mean more cuts. Some higher profile staffers like Sara Moonves, daughter of former CBS chief executive officer Les Moonves, and contract contributors like Lynn Hirschberg are thought to be negotiating their employment anew with Surface ceo Marc Lotenberg. Meanwhile, Rickie de Sole, W’s fashion director and daughter of industry executive Domenico de Sole, is said to be staying on at Condé in her relatively new position at Vogue. A few other staffers left at the end of last year.
A Condé spokesman declined to comment and Lotenberg could not be reached.
Although Surface is the name attached to the purchaser, funds for the acquisition are said to be coming from a small consortium of investors, as Surface does not have the money itself to pay for the acquisition. The magazine just last year got $2 million in a seed funding round from Magna Entertainment, thought to be one party behind the W deal. Magna is a New York holding and investment company owned by Joshua Sason, who was sued in February by the Securities and Exchange Commission for “microcap fraud” that took place between 2012 and 2013, based on Magna’s alleged scheme of obtaining fake promissory notes to short penny stocks.
C Ventures, the media investor run by Adrian Chang who was until recently in the lead to buy W, as first reported by WWD, is no longer a part of any deal. Negotiations for the purchase fell apart for reasons that could not be confirmed.
But independent operations may be crucial for the survival of W, as Surface ceo Lotenberg does not have a stellar history as a media operator.
His first media venture, 944 magazine (named for a Florida zip code despite its founding in Arizona), went bankrupt in 2010. Court documents show that the company was over its head in debt and owed more than $10 million to creditors, including his father and scores of staff and freelancers, many of whom were never paid for their work. The company was also sued in local Los Angeles court a dozen times between 2007 and 2009 over accusations including harassment, wrongful termination, discrimination and breach of contract. One of the lawsuits, filed by a small group of 944 employees, was removed to federal court and sought $1.6 million for allegations including gender discrimination, hostile work environment and intentional infliction of emotional distress. That case appears to have been settled out of court.
The magazine was eventually purchased in 2011 by Sandow Media, which now publishes magazines NewBeauty and Interior Design. Although Sandow paid $1.3 million for the bankrupt entity and its assets, according to court records, it quickly shut the magazine down.
While 944 was winding down through bankruptcy, Lotenberg got ceo positions at two New York marketing firms, Gen Art and Wonder, and in 2012 became ceo of Surface. Sandow, led by founder and ceo Adam Sandow, in 2011 purchased Surface. The following year, Surface was sold in an unannounced deal to Lotenberg and Eric Crown, who co-founded the business IT company Insight Enterprises and in 2014 the magazine was put under Surface Media LLC. Crown was also an investor in Lotenberg’s 944 magazine and is thought to be part of the W deal. In 2017, Sandow again took a minority stake in Surface through its merger with Culture + Commerce, an agency Sandow owned and wanted to divest. Although Sandow’s interest in Surface had sources saying the company was also involved in the W deal, Sandow says is it not involved in any way. Sandow also stressed that it’s not at all involved in the management or operations of Surface.
Surface has gained its own reputation in media circles as an operation with very high turnover (nearly all of its editorial employees left last year and there were 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.
Considering the W deal is thought to include most of the magazine’s current staff and Tonchi, a passionate booster of art, fashion and his magazine, here’s hoping he can establish a professional culture of his own as an independent operator.
Editor’s Note: This story was amended after its initial publication to accurately reflect Sandow’s position.
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