Through the looking glass

Folio: The Magazine for Magazine Management, April 1, 1996 by Lorne Manly

The nineties have not been a rewarding time for Times Mirror Magazines. Downturns in the company's key advertising categories, tobacco and liquor, prompted consultants' visits, grandiose plans for marketing redirections and ambitious forays into cable TV and new media. The fixes didn't take.

Last year--in the middle of a comprehensive restructuring of Times Mirror Company--new CEO Mark Willes turned to Efrem Zimbalist III, a former management consultant who was vice president of strategic development at Times Mirror corporate. Zimbalist, whose only operating experience was as CEO of Correia Art Glass, Inc., quickly lived up to his reputation as a cost-cutter when he slashed 20 percent (125 jobs) from the $250 million division.

The cuts and a back-to-basics approach are beginning to pay some dividends. Now he must grow the company while reassuring demoralized employees about the future. FOLIO: recently spoke to Zimbalist about the challenges facing TMM and the industry as a whole.

Q: After all the cutbacks, and amid expectations that the division will be sold, how do you convince employees that the company is truly committed to the magazine business? A: One sign of our commitment is me moving to New York [from Los Angeles]. I would not do that if I did not have assurances that we are serious about this. Two: Because of all the publicity, we have had scores of offers over the last six months for each of our titles. We have said no to each of those. We are not in the business of liquidating Times Mirror; we are in the business of focusing on content and information and news. And three: We are investing in new businesses this year.

Q: Times Mirror was among the most aggressive of the traditional media companies venturing into nonprint areas like cable and new media. Has this changed? A: The first thing we're concentrating on is the basic magazines. We do want to build the brands, but we want to make sure that each one of our titles is number-one or -two in its field. And we want to make sure they're profitable, that they are meeting their objectives.

Q: What happens to all the offshoots? A: We're by no means anti-brand extension or anti-new media, and we're moving fairly aggressively in a lot of those areas. We've launched skiNet, Yachting.net and Golf Online--and we have a major project team looking at The Sporting News Online. But for the next five years, 80 to 90 percent of our revenues and profits will come from magazines.

But we're not looking for growth within titles as our only engine. We need to start new magazines. We started one last year-Snowboarding Life. And our objective is to test three or four ideas each year, having one start-up each year.

Q: What happens to corporate-wide programs like Ocean Planet? A: It has to be done within the titles, not as a corporate entity. Ocean Planet continues to be a tremendous success for the Smithsonian and for us. But rather than come up with an idea that works for us and then finding advertisers to support it, most of our successes grow out of the individual marketing requirements of an advertiser's matching up with the capability of a particular title, and then building that to a bigger idea.

Q: But wasn't it up to individual properties to push those ideas before? A: We used to have more of a vertical fanctional organization. We had a new-media department, we had a brand-management department, a circulation department, a marketing department. And then we had the titles. And although there was some interaction, they really didn't have enough control over what these vertical departments were doing. And we kind of blew that up.

Instead of having functional teams like renewal and newsstand, we have an Outdoor Company SWAT team, a Popular Science and Home Mechanix SWAT team. And those people are in daily meetings with the titles about what their strategies are. In the new-media department, where possible we're putting the people into the titles themselves, reporting to the editors and the publishers. The idea is to have a very thin corporate structure and to put most of the resources and responsibilities on the titles and groups.

Q: What is the financial goal of the division? A: Our three-year objective is to get our margins competitive with the industry. [According to data from the Magazine Publishers of America, the industry average for income from operations was 9.3 percent in 1994 and 12 percent in 1993.] We're saying that we are going to be in the middle of the pack in three years--we are way below right now--and beyond that we are going to get into the upper quartile. I am not going to deny we have some problem children here, but we are facing those problems head on and taking action to fix them. Q: How are you dealing with these problem children? A: I do not want to flag what we're doing, but I think Home Mechanix is a particular problem. It is a terrific magazine that has been suffering at the newsstand, and we are looking to really turn it around. Outdoor Life is a magazine that, over the last few years, has drifted away a little bit from its core reader, the hunter and the angler. The image has bluffed, and readers and advertisers--specifically endemic advertisers--have noticed that. They say "Do you support hunting, do you support fishing, or are you a backpacking company now?" And we are going straight back at them and saying that we are a hunting and fishing book.