Eliminating the sins of bigness; Cahners' break-up into five divisions intended to keep titles in touch with markets

Folio: The Magazine for Magazine Management, May, 1989 by Michael Garry

Eliminating the sins of bigness

New York City--Feeling the bureaucratic burden of running 65 publications-including numerous business monthlies, some business weeklies and a handful of recently added consumer titles-Cahners Publishing Company has decided to regroup its titles into five separately run publishing divisions.

"We're not making cars," explains Terrence M. McDermott, president of Cahners Publishing. "We produce an intangible, conceptual product called a magazine, and it's very important that we do that with the least possible amount of administrative bureaucracy.

"I don't want to get to the point." he adds, "where we say, 'We used to be more personal, more directly involved with the marketplace. But now we're so big.' That's not an acceptable excuse."

In McDermott's view, a publishing company should ideally be composed of between 14 and 20 titles, producing about $100 million in annual revenue Cahners Publishing Company, which, he says, has quadrupled in size since its last reorganization in 1981, generates $500 million annually.

The latest reorganization slices the company into smaller groups in several ways. Three divisions encompassing business magazines have been organized along geographic lines: Boston, with 14 magazines, including Datamation and Design News; Chicago, with 20 titles, including Plant Engineering and Restaurants & Institutions; and New York, with 11 titles, including Emergency Medicine and Publishers Weekly.

The New York division will also take charge of the nine medical titles--Hospital Publications, Inc., of Secaucus, New Jersey--Cahners acquired for $52 million from Argus Press Ltd. in March. Cahners already publishes nine titles under the Medical/Healthcare Group in New York City.

Two other divisions were formed along functional lines: consumer magazines, with five titles, including American Baby and Modern Bride; and business newspapers, with 10 weekly and daily publications, such as Variety and Daily Variety.

The divisions will represent "five self-contained publishing companies within one," says McDermott. As a result, services such as art, production and research, which had been under centralized corporate management, have been reapportioned to each division.

A shorter route to the top

Under the former system, 19 managers reported to McDermott. As a result of recent changes, nine have been absorbed within the new divisions, and one has retired. The remaining nine will still report to McDermott: they include the senior vice president of each division and four corporate officers. Besides making McDermott's life easier, he says, individual publishers will have better access to him. "Publishers each work for a division senior vice president, who works for me," explains McDermott. "They can now say, `I'm one guy from the president of the company,' not five or six." At the same time, decision-making will be shifted from corporate officers to publishers, putting "resources closer to the marketplace."

The former system, while maintaining a centralized corporate structure, organized magazines by product groups--electronics/computers, and building and construction, for example--for group ad buys. Those ad buys will still be available under the new structure, says McDermott.

The new arrangement should also facilitate acquisitions and launches. Acquisitions, says McDermott, can be more easily categorized within the company by geography or function. And a division can acquire a magazine and make the necessary staff adjustments, "without restructuring the whole publishing company," he says.

Launches will be left to individual divisions, which have better sense of launch possibilities than corporate administrators, says McDermott. Under the former system, launches were funded from "the one big pile of money I parceled out."