Two women's titles better than one; the Times Co. pairs newly purchased McCall's with Family Circle, leaving Woman's Day as only solo sister

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

Two women's titles better than one

New York City--In the hotly competitive women's service field, there's safety--as well as strength--in numbers.

McCall's, formerly run by Time Inc.'s partnership with Dale Lang, now shares the same corporate umbrella (The New York Times Company Magazine Group) with Family Circle. Both Ladies' Home Journal and Better Homes & Gardens operate under the Meredith Corp., while Good Housekeeping and Redbook are owned by Hearst. Among the Seven Sisters, only DCI's Woman's Day lacks a corporate link to another women's service title--and that's only because DCI couldn't come to terms with Time Inc./Dale Lang about purchasing McCall's. Even First for Women, the new entry published by Heinrich Bauer North America Inc., is under the same roof with Woman's World.

These dual magazine ownerships mean, of course, packaged ad buys offering greater audience at a lower cost per thousand. "The numbers show that Ladies' Home Journal and Better Homes & Gardens are gaining," says an industry source. "That's because they can leverage a two-book buy."

Such ties have apparently worked well for other titles. The Ladies' Home Journal/Better Homes & Gardens liaison "has helped both magazines," while the Redbook/Good Housekeeping link has "energized both sales staffs," says J. Michael Hadley, executive vice president of Veronis, Suhler & Associates, the investment banking firm that represented McCall's in the transaction. Adds Hadley: "A lot of us feel that the Seven Sisters now have a more exciting story to tell."

The huge female audiences offered by the joint buys carry particular clout, Hadley contends, because TV audiences "are shrinking and weakening." The combined audiences of McCall's and Family Circle will amount to 30.4 million women, or one-third of the adult women in the United States, according to Nancy Nielsen, director of corporate relations, The New York Times Company Magazine Group. This combined buy, says Nielsen, would have a lower cost per thousand than any of the other joint Seven-Sister buys. Nielsen declined to discuss the details of the dual ad buy.

Such factors, according to figures from Veronis, Suhler & Associates, have helped the Seven Sisters boost ad pages by 10.7 percent and revenues by almost 20 percent in the first six months of this year--their best performance in four years.

Yet, given the rampant rate-card breaking in the women's service field, it can be hard to interpret those ad sales figures, notes John Grey, vice president at J. Walter Thompson. "I have deals involving substantial pages, but I'm not paying anything near the rate card," he says.

Won't be cannibals

McCall's, founded in 1876, was sold to The New York Times Company in late May for $80 million, according to published estimates. Ostensibly, McCall's was sold on the upswing. After a dismal 1988, when pages dipped 9.7 percent, the first quarter 1989 saw pages for the 5.1 million-circulation title jump 12.2 percent. Family Circle's pages rose 12.5 percent in 1988 and 20.2 percent in the first quarter of 1989.

McCall's makes a good fit with Family Circle--and not just for ad packaging purposes, says Nielsen. Although both are women's service titles, the two magazines share relatively few readers. "Family Circle is more service-oriented, while McCall's is more personality oriented," maintains Nielsen. "They shouldn't cannibalize each other," she adds. In addition, almost three-quarters of Family Circle's 5.9 million circulation is newsstand generated. McCall's, on the other hand, is 85 percent subscription sold.

Peter Diamandis almost landed McCall's, but his offer fell short. He thought he could eventually negotiate a lower price, but he "underestimated the swiftness of The New York Times Company," says one source. The Times Company, according to the source, called a board meeting and approved the sale within 10 days.

Where does the pairing of women's service titles leave Diamandis' Woman's Day? "I suppose deals will be cut advantageously for McCall's and Family Circle preventing Woman's Day from getting a piece of business," says Grey. But Joseph Ostrow, executive vice president at FCB Leber Katz, points out that "Woman's Day can be packaged with other Diamandis properties."

The McCall's sale doesn't, however, mean automatic salvation for the title, perhaps best known in recent years for its public abandonment of its rate card. The magazine's problems go beyond the price of an ad page, Ostrow asserts.

"McCall's had difficulty because it was not clearly positioned as serving a communication need," he says. "They've got to look at audience and editorial rather than making price the only issue."

Time Inc. and Dale Lang have retained Working Woman and Working Mother. The move reflects Time Inc.'s "different direction" in the wake of its troubled proposed merger with Warner, says a source. "For a while, Time Inc. was creating entrepreneurial subsidiaries, but you won't see that happening anymore."