A new direction for Cahners: Terry McDermott plans to build up the consumer magazine division of the mostly business publisher

Folio: The Magazine for Magazine Management, May, 1990 by Kevin Sghia

NEWTON, MASS.-Terry McDermott, president of cahners Publishing Company, doesn't like to miss opportunities. In part, that explains why he interviews every potential ad representative, as well as all key editorial personnel, for Cahners' 70 magazine properties.

A similar fear of missing the next great publishing opportunity lies behind Cahners' rapid expansion into consumer magazines. The company plans on quickly beefing up its 11-title consumer division, which includes magazines like American Baby and Modern Bride.

"By 1995, we definitely want to see that the Cahners magazine company is earning over a billion dollars per year," says McDermott, "and that's basically a 50 percent split between business and consumer."

The company, which grossed a half billion dollars from publishing last year-approximately $420 million from business and $80 million from consumer-wants to earn equal revenue from both divisions by the middle of the decade.

McDermott's plans to reach that goal include new launches in a company not generally recognized for its start-ups. "Our launch record has been spotty," McDermott says. "If you went through the company in cycles of leadership, I would really like my cycle to be remembered by a significant capacity to launch new titles. we're basically a company that has been built by acquisition."

Under McDermott, the strategy is slowly changing. in just two years, Cahners has launched HealthY Kids: Birth-3 and spun off two titles from the magazine-one targeting parents of children ages three to 10, the other aimed at parents of teenagers. Other recent spin-offs include House Plans and Your Prom, based on Professional Builder and Modern Bride.

McDermott acknowledges that there are difficulties when a business publisher adds consumer titles. For example, Cahners had little experience in paid circulation titles before acquiring Interior Design, its first paid book, in 1984. At the time, the company waS bringing in $2 million per year in circulation revenue. That figure has since grown to $40 million. The company also had little experience on the newsstand before buying Modern Bride. However, it proved to be a quick study, and the bridal title completed 1989 in the top 10 of magazines sold on the newsstand.

Despite initial achievement, McDermott is pragmatic enough to realize that just because Cahners is a successful business publisher doesn't mean it won't need outside assistance to grow. Many consultants have helped the company through rough spots already, and Neal Vitale, a former company consultant, has been hired to concentrate on acquisitions.

New consumer acquisitions will be directed toward special interest magazines because they play into Cahners' strength of selling numbers and audience. The company is also likely to add consumer titles in categories in which it has business publications, like the automotive field.

Ideas = growth

McDermott's main contribution is to promote company growth and creative thinking, according to Judith Princz, publisher of American Baby, adding, "He would rather tolerate the failure of an idea than not having one. "

McDermott's openness to ideas and passion for publishing have carried him far. Out of college he joined McGraw-Hill's sates office in 1967. Two years later, he moved to Cahners, where he eventually held the titles of national sales manager for EDN and publisher of Building Design & Construction.

As publisher, McDermott saved the struggling magazine from going out of business, perhaps the smartest thing he ever did for the company. He made the magazine the eighth most profitable Cahners title in 1980 by revitalizing editorial and conducting exhaustive market research-a Cahners trademark.

Another strength of McDermott's is adding product extensions. American Baby has prospered under his guidance: it has not only posted gains in ad pages and revenue since being bought in 1986, but McDermott helped pave the way for spin-offs based on the title.

"The publication has grown a lot, and he has made an important contribution," says Mark Levine, senior vice president and general manager of Cahners' magazine division. "He is a very creative person-he increases the potential of the magazine beyond the obvious. He brings the experience of working with over 60 publications and of what he's done elsewhere to every conversation."

Much of what McDermott has learned has been gained through failure. "That's the only way you get experience," he says. He freely admits that he was overly committed to the market niche of Corporate Design & Realty, for example, and that he failed to recognize signals that the magazine could not be saved. The magazine had a decaying audience and drained the company $750,000 a year for three years before it was folded.

McDermott has also learned from his predecessors at Cahners-like William Platt, former magazine division head. Under Platt's leadership, Cahners was noted for its ability to integrate magazines after acquiring them.

"Cahners has been a great acquirer and builder of titles," says McDermott. "We really know how to buy other people's magazines and enhance their value. Almost every magazine we have ever bought, if it was viable, is a lot better magazine than when we bought it." Interior Design is a good example of how Cahners adds value to a title. The magazine is now worth twice as much as what was paid for it in 1984, says McDermott.