Magazine Marketplace: A highly selective industry chronicle

Folio: The Magazine for Magazine Management, July 1, 2003

THE DEALS

You may not need your sunglasses yet, but the M&A market is getting brighter. May and June saw a reasonable mix of talk and action. "Things are improving substantially," says Reed Phillips, managing partner of DeSilva & Phillips. "There have been many more deals in the works in the past few months than in the first quarter, in business-to-business and consumer titles. More buyers see this as a good time to make acquisitions, because a lot of properties that were in decline have bottomed out and are showing improvement."

"There are a lot of small indicators that the future will be sunny," says Sharon Sevrens, managing director of Whitestone Communications, which specializes in the b-to-b market. "The larger media players have been staying on the sidelines, but we're starting to see more activity from them. They are having strategy sessions to explore adding and divesting products."

Sevrens also sees a change in the posture of entrepreneurs. "In the past, they weren't considering selling," she notes. "Now they're willing to talk about it." Sevrens attributes her "cautious optimism" to several factors, including the relatively quick end to the war in Iraq, the slowly receding memory of the shameful accounting scandals at Enron and WorldCom, and bankers' rising comfort level as the stock market shows signs of life.

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Watt Publishing Company Purchases Chartwell Communications

With the acquisition of Chartwell, the 86-year-old Watt has expanded its focus beyond its traditional sectors of agribusiness and food-processing titles. In addition to its stable of publications covering the poultry, pork, feed, pet food, and meat-processing industries, Mount Morris, Illinois-based Watt will now also target the woodworking and furniture manufacturing industries. Des Plaines, Illinois-based Chartwell will operate as a publishing group within Watt. Chartwell titles include FDM, CabinetMaker, and Woodworking Industry Marketplace. The value of the deal was not disclosed.

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Hanley-Wood Buys Public Works

Washington, D.C.-based Hanley-Wood, publisher of 38 magazines in the residential and commercial construction industries, has bought the 66,000-circ Public Works, a 100-year-old title that targets engineers, contractors, and other professionals in the design, construction, operation, maintenance, and repair of infrastructures. Additional assets include a Web site, an annual product directory, and three annual market research surveys. "This acquisition is part of our strategic plan to aggressively expand our portfolio into the commercial construction sector," says Peter Goldstone, President of Hanley-Wood's magazine division. The terms of the deal have not been made public.

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Progressive Business Publications acquires Oakstone Legal &Business Publishing

The privately owned Malvern, Pennsylvania-based Progressive moves into two new areas with the acquisition of Oakstone Legal & Business Publishing. "With Oakstone, we are entering two vertical niches, legal and education, that we have not been a player in before," says Tom Schubert, Progressive's CFO. Oakstone L&B, a division of Haights Cross Communications in White Plains, New York, puts out 26 publications and a number of annual books that cover legal issues for businesses and educational institutions. "Their products and services target the business market, which fits our profile. So we can leverage our existing expertise," Schubert says. Progressive produces 28 subscription newsletters for executives at 125,000 companies, on topics including sales and marketing, human resources, and information technology. Terms of the acquisition were not disclosed. - Lorraine Calvacca

THE DEVELOPMENTS

AD SALES CODE? UPC!

Quantifying the power of print ads is like pushing the proverbial boulder uphill; it can be a slow, sweaty, and sometimes futile ordeal. But Jane vice president and publisher Eva Dillon says the sassy, straight-talking title for twentysomething women is "one step closer" to expediently proving a direct connection between magazine advertising and consumer action.

The June/July issue kicked off a campaign of promotional contests with "Jane Makes You Famous." The initial sweepstakes prompts readers to buy any of its 12 sponsors' products and then to enter the UPC on the magazine's Web site. The winner, to be selected at random, will win all kinds of booty, including $1,000, sponsors' wares, a Nokia phone, and the honor of writing a full-page story for the 700,000-circulation title. The strategy seems to have worked famously with media buyers, attracting 37 pages of new business, reports Dillon. "We think it will catch on," she says. "Advertisers want to see a bump in sales, and they want to see accountability. One way to get that is to get readers involved."

Apparently, readers haven't hesitated to buy for a try at the prize, even though, legally, no purchase is necessary; according to Dillon, 85,000 UPCs were entered on Jane's Web site by the second week in June. (The contest closes in mid-July.) "The younger generation is more marketing savvy," she posits. "They're not sensitive" to come-ons.