Boating titles swamped by luxury tax

Folio: The Magazine for Magazine Management, Sept 1, 1991 by Zakia Hyder

The 10 percent Federal excise tax on luxury purchases enacted in january has turned the tide against boating magazines.

"Ad space is down dramatically in the first six months of 1991, as compared to the same months last year," says Chris Donahower, publisher of Cahners' Motoryacht International and Power and motoryacht. "While I cannot blame this entirely on the tax, it is surely the primary factor here. Due to it, boating companies are suffering, consumer spending is down, and so are our ad pages. "

According to a survey of the largest boat dealers in Connecticut, conducted by the Marine Retailers Association of America (MRAA), sales of boats costing $100,000 or more have fallen 93 percent, from $7.879 million in 1990 to $ 545,000 for the same period this year. Nationwide, more than 19,000 people have been put out of work at boat making plants.

In turn, the tax has caused Cahners' boating titles to drift. Motoryacht International, with a worldwide circulation of 100,000 and a current frequency of six issues per year, will become an annual in 1992. Also, Motorboat ceased publication with its July issue after having skipped two issues earlier this year. The title's subscription assets and liabilities have been sold to Atlanta-based Boating World, previously titled Boating Journal. (The idea of relaunching Motorboat as an annual is being discussed, says a company spokeswoman.)

To counteract the impact of the tax on ad sales, Cahners is offering added value wherever possible. "We tell advertisers, You buy an ad page and you'll get help with your direct mail, or you can get some kind of free access to our readers-things like that," says Donahower.

"The tax has changed things considerably," agrees Peter McHeffey, advertising director of Hearst's Motor Boating & Sailing. According to the Patterson Advertising Reports, Motor Boating & Sailing has suffered a drop of more than 200 ad pages this year, declining from 915.94 pages to 702.33. However, McHeffey's outlook remains upbeat. "We are about 84 years old and we are quite optimistic despite this tax," he says.

Hachette Magazines' Boating, close in competition to Motor Boating & Sailing, has also felt the impact. According to Patterson, its ad pages have dropped from 922.81 in 1990 to 685.12 for the same period in 1991. Earlier this year, Boating's two-year-old sister publication, Boat, ceased publication. The company is still trying to merge the two publications' subscriber and advertiser lists successfully, says an inside source, speaking on the condition that his name not be used. Arguing for a repeal The magazine industry is trying to turn the tide. "The mounting job losses and plummeting sales in [the boat manufacturing industry] have had a ripple effect on the magazine industry resulting in lost advertising revenues for both large and small publishing companies," says Donald Kummerfeld, president of the Magazine Publishers of America, in a letter to U.S. Senator Robert Dole (R-Kansas), who recently introduced legislation to repeal the luxury tax. Ad revenues from inboard cruiser manufacturers for the top 15 marine titles have declined $2.3 million in the first six months of this year, compared to the same period in 1990, says Kummerfeld.

"Unless the excise tax is repealed," warns jeff Hammond, publishing director

of Power and Motoryacht, "at least two dozen boat companies will shut their doors this fall." Some boating titles, however, are fighting hard. Yachting and Saltwater Sportsman, for example, are among the titles that have asked subscribers to support a repeal of the tax. "Do it," says an editorial in Yachting. "The industry needs your help. " As do the boating titles. TABULAR DATA OMITTED