Magazine Marketplace: A highly selective industry chronicle

Folio: The Magazine for Magazine Management, Nov 1, 2002

THE DEALS

M&A showed signs of a modest pickup in September and October, indicating that despite a tenuous economy and a shortage of big-ticket deals, the game must go on. Promisingly, preliminary deal-talk suggests that the pace in spring 2003 will be brisker. "Based on what we've seen in the pipeline, a lot of people are targeting next spring if they're interested in selling," says Reed Phillips, partner with media investment bank DeSilva & Phillips. "Right now, we're keeping our fingers crossed that current discussions will continue." - Sarah Gonser

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LexisNexis Group agrees to buy Anderson Publishing for $21 million Pending shareholder approval by the end of October, Reed Elsevier-owned LexisNexis Group says it will acquire Anderson through a shareholder buyout. All 77 employees of Cincinnati-based Anderson - a publisher of professional journals, criminal-justice publications, and law-school textbooks - are expected to retain their jobs. LexisNexis, which reported $1.4 billion in revenue last year, says the deal will provide a stronger foothold in the small law-firm market.

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Broadview Capital Partners will acquire Red Herring Communications for est. $10 million RHC Media Inc., majority-owned by venture capital investor Broadview Capital Partners, says it agreed to acquire Red Herring Communications, the San Francisco-based owner of the 325,000-circulation Red Herring magazine, related conferences, and Web site. Red Herring Communications had reportedly been struggling to meet its financial obligations toward its real estate investments. RHC Media was a majority investor in the company prior to the deal.

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The California Newspapers Partnership acquires The Original Apartment Magazine from Bill McCullough for est. $10 million plus The California Newspapers Partnership, controlled by MediaNews Group, acquired the semimonthly magazine The Original Apartment Magazine from Bill McCullough. Denver-based MediaNews Group operates eight daily newspapers, including the Daily News in Los Angeles and the Press-Telegram in Long Beach.

THE DEVELOPMENTS

ROSIE UNLEASHED

It appears that Rosie O'Donnell, former professional talk show host, has become Rosie O'Donnell, professional talk show guest. Last month, in a PR offensive presumably designed to counter the $300 million suit G J USA slapped her with - and to publicly counter what O'Donnell called G J's "leaks" to the press - O'Donnell stopped in at the "Today" show, CNN, "The O'Reilly Factor," "The View," Letterman, Leno, "Dateline," ... and the list goes on. To top things off, Rosie sat for the cover of People magazine's October 7 issue. (Remember when O'Donnell said that she didn't like to wear all that makeup for Rosie photo shoots?) So while G J has been tight-lipped since the suit was filed (G J spokeswoman Sue Geramian: "We're unable to comment on pending litigation; however, we are confident that we will prevail in court."), Rosie been has singing like a perturbed canary. One example, from the "Today" show: "Any and all profits I get in a settlement will go to charity. Any and all. Which means this is not about money to me. This is about integrity. And in America, you do not own someone's name, no matter how much you think you do, no matter what paper says you do." Ramblings like that reportedly led O'Donnell's PR and legal team to cancel her a scheduled appearance on "Larry King Live," and the one-time Queen of Nice has been quiet of late. OUR TAKE: At press time, O'Donnell and her high-profile attorney, Mary Jo White, had yet to file a countersuit. But with so much dirty laundry already flapping in the breeze, the contretemps may quiet down for a while. The fun will begin again once this mess gets to court. - GV

VALLEY OF THE DAMNED

In only one week's time, the last holdouts among New Economy magazines finally gave way to the new economic realities. Upside and Forbes ASAP were shuttered, while Red Herring pulled off some legal acrobatics that allowed it to shed the most onerous of its debts and retreat to more modest San Francisco offices. All three were born in Silicon Valley in the early '90s, before .com became just another annoying suffix. Upside, the oldest, suffered for 13 years without a major backer, but had survived the ups and down of its field like a cockroach in nuclear winter. One of its cofounders, Rich Karlgaard, left in 1992 to start Forbes ASAP, a supplement to the flagship; it had shriveled to a quarterly frequency by the end. Upside's other cofounder, Anthony Perkins, left a year later to cofound Red Herring, which, along with The Industry Standard, became one of the great publishing successes during the boom. Unlike the Standard or Upside, however, Red Herring has built a fairly steady circulation of 300,000-plus readers. The magazine has drastically cut staff, and it cut its costs through a complicated deal in which it sold itself to its major investors, dumping debts along the way. Perkins, who is still chairman, is naturally bullish about the next boom. "We're just as viable as we've always been," he says. "Will new Red Herring-like businesses come onto the scene? Given my optimism as a whole, I think we'll see another generation of magazines come along." OUR TAKE: The Internet was real, but the funny companies with too much money obviously were not. Red Herring will hibernate while technology markets slumber, but new-technology magazines first need a new technology to cover. - GL