Why did Forbes buy American Heritage?

Folio: The Magazine for Magazine Management, March, 1986

Why did Forbes acquire American Heritage?

* New York City--After remaining on the selling block from mid-summer until the new year, American Heritage is now the property of Forbes, Inc., the publisher of the business magazine of the same name. The price was undisclosed, but one source confirmed that Malcolm Forbes and company paid between $8 million and $10 million for the bimonthly that covers American history.

Forbes was competing with five other bidders for the 32-year-old publication. One bidder was described as a "major player in the publishing and broadcast industry."

So why did American Heritage end up at Forbes, which until now had only one title?

The answer is three-fold.

The foremost reason is the Forbes family's general interest in history and Americana. The Forbes gallery in New York houses many of their acquired historical artifacts and documents. Malcolm Forbes, in fact, launched his own historical publication, Nation's Heritage, which ran as a book series during 1948 and 1949.

"My father and brother have been amassing historical archives. Now we can use them for something besides hanging them on the wall," quipped Christopher Forbes, associate publisher of Forbes.

The second reason is the explosive growth of American Heritage during the past six years. Since 1982, circulation has increased by 50 percent. For the first six months of 1985, total circulation was up 10.6 percent, to 137,316 paid, compared to the same period last year.

The circulation gains may be attributed to a changing political climate, notes one family member. "The late sixties was an unhappy time in this country," explains Timothy Forbes, the family member closest to the negotiations. "Things associated with patriotism didn't have the nice ring they have today."

Circulation for American Heritage peaked some time in the mid-sixties at 370,000 paid.

Not only readers, but editors, have been taking a new look at American Heritage. The bimonthly won two 1985 National Magazine Awards, which are presented by the American Society of Magazine Editors. Prior to 1985, the magazine had never even been nominated for one of the awards.

The third reason for interest in American Heritage is growth potential. The bimonthly, which originally began as a hardcover book series with no advertising, just began taking ads in 1981. Advertising pages now make up 20 percent of the magazine, says Carol Smith, publisher.

Until 1985, American Heritage took no fractional ads, only full pages. In 1985 it ran slightly more than 100 pages of advertising, compared to approximately 55 in 1984, according to Timothy Forbes.

"They are really new to the advertising market," he explains.

Even so, their demographics spell good odds for success. The magazine is pitched as an upscale title. Sixty-nine percent of its readers are male; the majority of readers are ages 25 to 54; and 89 percent are college educated. The average annual household income is $101,000, according to publisher Smith.

Its readers are "roughly comparable to The New Yorker's" notes Timothy Forbes.

Since its launch in 1954, American Heritage has had several owners, including McGraw-Hill Publications, which held onto it for seven years, then sold it in 1976. The most recent owner was American Heritage Press. Samuel Reed, the chairman of the board, owned a majority interest.

In addition to the magazine, Forbes has purchased all the publishing interests of American Heritage Press. They include a book series and a single-sponsor title, American Heritage of Invention & Technology, published three times per year.