Rodale's Era of Upheaval

Folio: The Magazine for Magazine Management, April 1, 2000 by Bob Moseley

Incoming president Steven Murphy needs to reassure employees and external constituents about the company's ability to overcome uncharacteristic problems.

These are turbulent times at Rodale Press, the Emmaus, Pennsylvania-based publisher that until last year had survived 68 years without layoffs. Once considered a model of workplace harmony, Rodale has been shaken in the last few months by the resignation of magazine unit president John Griffin, resignations of the editor and publisher of Men's Health, and the folding of New Woman.

That came on top of layoffs in the company's bicycling division last year, a restructuring of the Organic Living unit, and the announcement last September that longtime president Bob Teufel would be retiring.

One employee compares Rodale's recent journey to a high-speed roller coaster. "With the pace of change, nothing would surprise anyone anymore. It's very hard to judge morale--nobody has the time."

Until now, stability has been Rodale's trademark. "They've had an image of sort of a warm, family-run company," says Ellen Oppenheim, media director, FCB New York. "And one of the things they're going to have to deal with is they're looking a little bit more like everybody else in publishing."

But while serious concerns exist, Rodale--a company with magazine and book-division revenues totaling about $500 million--continues to produce impressive results. Flagship Men's Health, with three million readers worldwide, grew 8.4 percent in revenues last year, from $64.5 million to $70 million, although ad pages dipped 5 percent, from 898 to 853. And Prevention, celebrating its 50th anniversary, is "the real star of the company," says the insider. The three million-circulation title grew by 4.4 percent in ad pages, from 977 to 1,020, and 13.5 percent in revenues, from $63.7 million in 1998 to $72.3 million in 1999. In addition, Runner's World last year exceeded its 500,000 ratebase, delivering a circulation of 550,000.

But Rodale is not used to upheaval, and stabilizing the company will be job one for Steven Murphy, the former executive vice president and managing director for Disney Publishing Worldwide, who takes over from the retiring Teufel on April 3. Murphy will also need to name a successor to Griffin, and address both internal and external questions about the direction of the company.

Employees and advertisers alike are wondering about Rodale's future and how it plans to implement a 10-year plan, called Project 2008 (the implementation is being lead by Maria Rodale, heir apparent to her mother, CEO and chairwoman Ardath H. Rodale). Murphy recently said that his first goal is to work with the management team to provide a clear vision and articulate where Rodale wants to be in three years. That's none too soon for advertisers. "There are a lot of impatient people out there chewing at the bit," says Steve Greenberger, director of print media for Grey MediaCom.

Men's Health is the biggest question mark. With the resignations of Griffin, publisher Jeff Morgan and founding editor in chief Mike Lafavore, the publication is in transition.

Griffin, one of the primary creators of Men's Health, was considered a candidate for Teufel's job as president and COO, but the company decided to go outside for Murphy. "John apparently didn't want to stay around if he wasn't going to be president," says the Rodale source. "A lot of people were upset when John left."

As for editor Mike Lafavore, the source says he might simply have been exhausted. "He was working a crushing workload and he may not have felt appreciated," says the Rodale employee. "Maybe there's this sense now that people feel unappreciated."

Meanwhile, Rodale gave up in January on New Woman, two years after acquiring it from Primedia Inc. (FOLIO:'s parent). Forty-five staff members lost their jobs. New Woman had been repositioned less than a year before its demise, but the makeover couldn't help single-copy sales, which declined 22 percent in the first half of 1999.

Murphy says his focus for Rodale will be to leverage existing brands to expand their value in print, on the Internet and, perhaps, in broadcasting. Brand awareness is something Rodale has been slow to build on, sources say. E 1? Difficult Months

17 Difficult Months

* September 1998: The company announces that it is selling four titles in American Woodworking Group to Header's Digest Association for $20 million, and two quilting titles to Primedia for $10 million.

* December 1998: Jane Turner replaces Sean Flanagan as publisher of Men's Health.

* February 1999: Rodale experiences first layoffs since it was founded in 1930 by J.I. Rodale. Twenty jobs are cut as two biking titles are consolidated into one new cycling division, and the Organic Living unit is restructured.

* September 1999: Robert Teufel announces he is retiring in 2002, a date that he subsequently moves up to 2000.

* October 1999: Men's Health founding editor Mike Lafavore resigns.

* January 2000: Magazine division president John Griffin resigns.