The next big deal: Which magazine properties are next on the block? Industry executive offer their best guesses

Folio: The Magazine for Magazine Management, Jan, 2002 by Frank Anton, Alan Douglas

The big deal of 2002 will be Primedia selling off the old Intertec division. Instead of just picking it apart, trying to sell $250 million worth of properties, they'll sell the whole thing. They'll package the whole thing and sell it and just concentrate on the consumer side of the business. That doesn't seem far-fetched to me.

DAN BREWSTER, PRESIDENT AND CEO, C:J USA PUBLISHING

There are certainly some distressed assets out there. There's nothing for the first half of 2002 that indicates there's much relief. Primedia is trading at 81 percent off the high. It has the resources to weather the storm but the question is is the value there? Is it worth more in pieces than it is in whole?

PETER SHEA, CHAIRMAN AND CEO, ENTRBRUENER MEDIA

G J USA might be sold. Another European player looking to get into the U.S., or a financial player in the U.S., might be interested.

EDWARD KOLLER PRESIDENT & CEO, THE HOWABO-SLOAN-KOLLER GROUP

In my opinion, CMP could, bay Ziff Davis Media. Two technology companies one of which is doing lousy while the other is doing okay. CMP's got a big parent over in the U.K. And Ziff Davis may not make its debt payments so who knows if they have to file for Chapter 11? Maybe there are a lot of economies of scale.

TOM ROGERS CHAIRMAN AND CEO, PRIMEDIA

It will be very tough for smaller players going forward. I imagine there will be an awful lot of consolidation activity. I don't see anything monumental on the horizon near-term. I don't think, for the most part--except for very selective acquiring-that a down market is one where you'll see really monumental transactions happening. It's not the best environment for people to do that.

ALAN DOUG AS, PRESIDENT, DOUGLAS PUBLICATION

The clock is ticking on exit strategies for some of the VC-backed publishers, and it's ticking on loan agreements. In some cases, they stopped the clock because of low multiples but the smart play is to see where sales are actually scheduled and where they're overdue.

GEORGE HIRSCH WORLDWIDE PUBLISHERS INNER'S WORLD

Primedia, and what happens to it, could be a deal-or a number of deals-or none! But I would get active. Begin with the big names. Seventeen, New York and Modern Bride, and yot can almost pick your places. (Primedia is now shopping Modern Bride, according to the Wall Street Journal.) if they start spinning them off individually they might get some good bidding. But the problem is if you take the best values and sell them individually or in small groups, lesser titles could get lost in a sale. Conde Nast might be interested in New York.

ERIC BECKSON, EXECUTIVE VICE PRESIDENT, TURNSTILE PUBLISHING COMPANY

I expect the next major deal will be Primedia selting magazines to raise cash to an investo group and/or private publishing companies.

GUY WENDEE PRESIDENT AND CEO STAMATS COMMUNICATIONS

I foresee more than any great big deals in 2002, a continuation of properties that aren't part of a core group being spun off. That's part of a healthy cycle. You go through a cycle of accumulation and consolidation and this is a period of digestion where parts that don't fit are spun off to others.

STEPHEN COLVIN, PRESIDENT DENNIS PUBLISHING US.

A few people might make a bid for G J--Bertelsmann might be disposed to such an offer. Who would be interested? My response to that is always. Time Inc.

GARY THOSE, PRESIDENT EMMIS PUBLISHING

My long-shot deal is the break-up of AOL Time Warner--the thinking being that what they thought would work isn't going to work. But, again, that's a long shot. I think that you're going to see al lot of private equity companies come in and take pieces of companies--so there's actually going to be a contraction instead of a consolidation.

MARTIN WALKEN, CHAIRMAN WALKER COMMUNICATIONS

Look for Primedia offloading some of its consumer titles, despite what they say. They're going to sell whatever they can They'll have trouble getting big multiples for Cats and Dogs. Seventeen is a jewel and New York is a premier property. There's not a lot of synergism with Primedia titles to sell advertising across.

THE RESPONSES

We asked the chief executives of the potential acquirees to set the record straight. Here's what they had to say about the posting of any for-sale signs:

PRIMEDIA'S TOM ROGERS

We're planning to sell some small things, but in terms of the size and scope of the company, nothing industry-or company-significant.

G J'S DAN BREWSTER

There's no possibility of Bertelsmann selling G J. [CEO Thomas] Middelhoff has two core strategies: European television and American magazines. Middelhoff needs to go public and he needs big brands that he can bring in ads across multi-platforms. In fact, we're, looking for strategic acquisitions. We like strong brands that are leaders in their categories and, hence, are very tough to find. If they were to become available, we'd be very interested.

ZIFF DAVIS' ROBERT F. CALLAHAN

There are no plans to sell the company in whole, or in part.

Executives from AOL Time Warner could not be reached for comment.