Condé Nast is effectively at a standstill until it finds a new chief executive officer to run its troubled publishing business, but there are at most a handful of executives around who can meet all of its current needs.
The combined list of characteristics and experience that industry and executive search experts said is required of whoever is to replace Bob Sauerberg — who is being forced out amid Condé’s long-coming decision to dissolve the boundary between its U.S. and international operations and further cut costs — is extremely long. Almost as long as the list of Condé’s own problems.
Condé’s days of being able to spend big on the best talent and let them do their thing seem long ago — the last 10 years it’s been in decline, but the last five have been a true spiral. “Anger. Denial. Chaos,” is how one source succinctly described the company over the last decade and its response to the digital wave that overtook it.
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Sure, it will be willing to spend on a salary for whoever comes in to lead, but the company needs and wants someone relatively young (sources speculated people in their late forties at the oldest are on the emerging long list) which lends itself to a cheaper hire, compared to Sauerberg, whose base was in at least the seven figures.
“Candidates may not be on everybody’s radar,” explained Ginger Puglia, an executive recruiter for media and fashion companies here and in Europe. “But they need to be on the younger side because they’re going to be digitally savvy and open, more nimble.” She also noted that possible ceo’s don’t necessarily need to come from a media or advertising background. Someone could cross industries and be able to shift Condé in a direction that will steady it, bringing an entirely new perspective to its business.
“Look at success stories like Angela Ahrendts [the ceo of Burberry until 2014 when she became head of retail at Apple] — you don’t have to go with the usual protocol here,” Puglia said. “The thing to do is to think about who has had tremendous success? Who do people listen to? Who do people follow?”
While Jonathan and Steven Newhouse were clear in a staff memo that the ceo search is for someone outside the company, a first in its 110 years, with “global experience,” they were otherwise vague. Maybe because Sauerberg’s ouster was sudden and they actually have no one in mind as of yet. A source noted that the executive actually wasn’t expecting to be replaced and he was shocked when the day came, as were many Condé staffers. But the source admitted to hearing over the last year market chatter about how much time Sauerberg could possibly have left given that Condé has lost an estimated $250 million over the last two years.
Matt Rizzetta, ceo of North 6th Agency, said the most important thing for Condé right now is to get a leader with a history of entrepreneurship and innovation, in any industry, acknowledging that the market for some time has seen the publisher as “set in its ways.”
“It’s really just as much of a p.r. move as an h.r. move,” Rizzetta said. “It’s important that they get this hire right, so they can send a statement to the industry that they’re not only a legacy brand, they’re a pioneer.”
He noted that there are at most 20 people out there who fit the list of experiences Condé needs, which he agreed includes relative youth and experience running a global operation, but also the ability to connect with Millennial audiences, a deep understanding of the reemerging subscription economy, while sitting “on the cutting edge” of the ad industry.
“At the purest, most basic level, companies fail or succeed based on the strength of their leadership team,” Rizzetta added. “If they hire a great leader, does it guarantee Condé as a global brand? No. But if they don’t, it’s a guaranteed recipe for failure.”
While the entrepreneurial ceo personality lends itself to an ego that sees a pressurized, even desperate, situation like the one at Condé as bait (helming a major turnaround guarantees a lifetime of bragging rights and a seven-figure income), that same personality may not jibe with the family-run nature of the business — likely why the company has never had a ceo who wasn’t a Newhouse or groomed for many years by one.
One source noted that the Newhouse family “has to take at least some of the blame” for how things have gone in the wake of the Internet. Sauerberg, and his predecessor Charles Townsend, didn’t make decisions in a vacuum — the board of Condé parent Advance Media is small and contains many Newhouses, as it always has been. They ultimately call the shots.
In recent years, the source said that call has been simply: “Stop losing money.” But that’s hard because internal projections see the company not reaching a point of stasis with regard to print sales declines for at least another two years. And if that’s the directive, but you don’t have the freedom to enact fundamental business changes, there’s little left to do but enact layoffs and consolidate operations.
“The family gives you fewer and fewer good choices and at a certain point, you spend your day thinking how to cut costs,” the source said. “Your entire day.”
While there were new elements added to Condé, like Condé Nast Entertainment, its video studio that just got a new president; Spire, an audience-targeting platform now widely used by advertisers and marketers, and its branding studio, which was recently expanded, the company lost a lot of ground toward the end of the S.I. Newhouse Jr. era. Although he led the company through decades of a golden age when it became admired and envied throughout the publishing world for its quality publications, allowing it to charge the most and pay the most to its “star system” of editors and publishers, Newhouse was wary of becoming a new type of company: one that made videos and directly sold consumer products and competed with advertisers — which all magazines do now. “That’s not what we do” was a refrain, the source said. “Sell more ads” was another, but that came from nearly all members of top leadership over recent years whenever there was need for revenue.
All the while, rival Hearst Magazines was quietly doing everything Condé wasn’t and it’s now come out on top — with the help of a few key executives that came over from Condé (such as former magazines president David Carey and marketing and publishing director Michael Clinton) who knew where to fill in. Hearst is experiencing its own upheaval under Carey’s replacement Troy Young, who is said to be wholly uninterested in editors who show no talent for making the most of digital, but its evolution is well ahead of Condé at this point.
Now, whoever comes in to lead Condé will have to keep pushing on with a late evolution of the business and need to decide what to do with the company’s remaining print titles. Close? Digital-only? Sell? Three titles are already waiting for a buyer, and so many have already closed in recent years that Vogue, The New Yorker and Vanity Fair are the only real jewels left. GQ and Glamour, once veritable cash machines, have for years been hemorrhaging ad pages. Glamour not so long ago brought in enough revenue to float it and most other Condé magazines, but just shuttered print under a digital editor after 80 years to stem the losses.
While rumors and casual internal talk of a sale of Condé as a whole have been going on for at least two years, according to a source, either the company missed its window or lost its appetite. The publisher has since received unsolicited interest from separate buyers for The New Yorker (the only Condé title with a real subscription model anymore) and Vanity Fair (treading water under Graydon Carter replacement Radhika Jones), but rejected both, the source said.
As for what’s to become of artistic director Anna Wintour, the last vestige of the S.I. “star system,” along with the New Yorker’s David Remnick, the countdown game to her exit has begun again. Although sources noted she has no immediate plans, and Condé maintains she’s staying put, they generally agreed the likelihood of her sticking around to work for a new, likely much younger, ceo is slim. Perhaps just as slim, the likelihood that any new young gun could justify her total compensation (speculated to be in the eight-figure range), especially in light of some questionable executive decisions, like bringing in Jones at Vanity Fair, championing Teen Vogue and LQTBQ site Them, and not being able to save Self even during an ongoing wellness craze.
Lastly, the prospect of a Condé buyout from Apple, something mumbled about for many months, is also said to be empty, especially now that the consumer tech company seems to have its magazine app Texture figured out and gaining traction, along with Apple News.
“They don’t need them,” a source said. “I just don’t see a white knight coming in.”
Condé may still be hoping there is — its yet-to-be-found global ceo.
For More, See:
Two Become One: Condé Nast to Combine Operations; CEO to Exit
Condé Nast Top Digital Exec Out Amid More International Consolidation