Wenner said to seek sale or partner for Us
JANN Wenner, chairman of Wenner Media, is shopping Us Weekly, according to reliable industry sources.
Insiders say that potential suitors include Bauer Publications, Time Inc. and American Media Inc. — if AMI can overcome the bad blood between its chief executive, David Pecker, and Wenner.
Aside from the cyclical decline hitting all print publishers, Wenner Media has been under pressure from lawsuits tied to the now-discredited 2014 story in its Rolling Stone magazine about a “rape” at the University of Virginia that never happened.
The discredited story recently resulted in a $3 million libel award for the school’s former associate dean of students, Nicole Eramo. The deba- cle also had an unwelcome ripple effect across Wenner Media.
“We believe the 18 percent drop in Us Weekly and Men’s Journal print advertising in 2015 was exacerbated by brand advertisers avoiding or reducing their presence in the company’s magazines due to the discredited article [in Rolling Stone] which caused Wenner’s print ad revenue to decline at a faster pace than the industry,” a report by Moody’s Investors Service maintains.
Future lawsuits, including one seeking $25 million, could leave the company potentially unable to pay should the jury come back with an even larger award, Moody’s said.
Us Weekly is estimated to have rung up revenue of about $217 million in the year ended June 30.
Free cash flow was $15 million to $20 million.
The company is saddled with about $59.1 million in long-term debt left over from the $300 million loan it took out to get rid of Walt Disney as its joint venture partner in the celebrity gossip title.
Wenner, the mercurial founder, now 70, has been turning over control of the company to his son, Gus, 26, who wants to push more aggressively into digital.
The elder Wenner largely missed the digital revolution .
He is open to either an outright sale of Us or a strategic partnership, sources close to the situation said.
In September, he sold 49 percent of the flagship title, Rolling Stone, to BandLab Technologies.
For the three magazines, revenue was $330 million for the year ended June 30. Rolling Stone contributed about $88 million and Us was responsible for 90 percent of the remainder.
A Wenner spokeswoman declined to comment.
HuffPo pink slips
Merry Christmas, you’re fired. Only days before Christmas, AOL is shutting down the Huffington Post’s Rise site and laying off about 20 people who had produced its videos, Media Ink has learned.
Some see it as the first of several underperforming sites to be closed in the days ahead as new HuffPo CEO
Lydia Polgreen — recently poached from the New York Times — gets ready to take command early in 2017.
Tim Armstrong, CEO of AOL, the parent of HuffPo, announced last month that it would be chopping about 500 people, or 5 percent, from its payroll.
Rise, a site devoted to “solutions and wellness,” had actually originated as an AOL site, but when AOL head of videos Dermot McCormack left in September 2015 — after less than a year on the job — the project was given to Arianna Huffington at HuffPo.
Editorial Director Danny Shea was tapped to oversee it — but he exited in June and has since hooked up with Arianna at her new company, Thrive.
“Since he left, there was really no one in charge,” said one insider. “Nobody can believe they are [closing] it so close to Christmas.”
Many of the laid-off employees are “permalancers” who worked close to full time but were technically not full-time employees.
Bidders up
The bidding for Los Angeles magazine and two other regional titles that radio syndicator Emmis Communications is auctioning off should wrap up early in the new year.
Preliminary bids are in for Los Angeles, Cincinnati and Atlanta magazines, according to Emmis CEO Jeff Smulyan.
Some bids are for all three and some are for each individually, Smulyan said.
Separately, he said he has dropped a bid to take the publicly traded company private at $4.10 a share because a special committee set up to study the proposal thought the price should be higher.
Emmis shares closed Tuesday at $3.19, down 7 cents.
Pratt ‘x-it’
Jane Pratt will exit Time Inc. on Dec. 31 when her contract to run Websites xoJane and xoVain expires. News that Pratt was shopping the sites that Time had purchased from Say Media a year ago was first reported by Media Ink. Pratt felt that the sites were not getting the support from Time that they needed, sources said. Women’s Wear Daily was the first to report that Time had stopped posting original content to the sites, which were defaulting to the InStyle site, and that Pratt’s contract was not being renewed. Several staffers have been reassigned. Pratt could not be reached for comment. Among the potential suitors mentioned for the site were Vice Media, Bustle and Gwyneth Paltrow’s Goop site.