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Apr 26, 2008

NEWS: Legacy Publishing Marching Like Lemmings?

Ed: Paper, print, mail is 60% of costs. If advertising declines 10%, gross margins decline 25%. Death of paper is not controlled by the subscribers. It's the rising cost of moving paper.

Reed Elsevier Seeking Separate Buyer For US Magazines, Variety

Reed Elsevier is planning to spit up its publishing unit and sell of the US-based and European businesses separately, a source tells Rafat Ali. Apax Partners, which discussed a deal for the whole unit, has now taken itself out of the bidding.

Analysts expected all of Reed Business Information to fetch anywhere from$1.96 billion to $2.6 billion, or 8x to 11x 2007 operating income of $233 million. Now Rafat reports the smaller US unit, which includes 80 trades like Variety, Publisher's Weekly and Broadcasting & Cable, is being shopped separately for $500 million.

The former publisher of Variety, Charlie Koones, recently joined PaidContent's board.

Related: Who's Going To Buy Variety + Reed Business?
Another Potential Reed, Variety Suitor: PE Firm Permira

Reed Business Sale: Apax Sitting Out For Now; Parts To Be Broken Up; U.S. To Be Sold Separately

So some reality check coming into the sale process of Reed Business Information, the business publishing arm of Reed Elsevier (NYSE: RUK) . We have learned that Apax, initially thought of as being one of the main contenders to buy the RBI worldwide division as a whole, is now sitting out of it. It was never very clear how serious Apax was in the first place, but we do know Reed's management tried to do a sweetheart deal with Apax before it went for a general bidding, with the current management in place, and it did not work out. UBS is running the sale process, but the official book for the company is not yet out (expected as soon as next week, after some delays).

We have also learned that Reed Elsevier has changed its mind on how to sell it. Initially it did not want to sell off various pieces separately, but now at least the U.S. part, RBI-US, will be sold off separately, and multiple parties are aligning their arrows for when the process starts. The potential buyers include some of the usual suspects on the PE side. The price for the U.S. piece, which includes about 80 magazines and online sites, is expected to be in the $500 million range, though as the market moves into a further recession, that price could come down...

Murdoch's WSJ: More News, Less Business

Keep forgetting what paper you're reading when you crack the WSJ in the morning? It's not you. It really is different since Rupert Murdoch bought it last year.

How different? The Project on Excellence in Journalism took a tally since News Corp. (NWS) took over: Business coverage is down 50% (!) on the front page, while political and foreign news are way up. Since Dec. 13, the Journal has devoted almost as much front-page real estate to politics (18%) as the New York Times (26.5%).

A complete study of the transformation is available at journalism.org, but here's a handy pre- and post-Murdoch synopsis:


Ziff Davis Enterprise Restructures, Issues Layoffs

...according to B2B magazine. The layoffs were handed down by Steve Weitzner, who was named chairman-CEO of ZDE in January. Aside from the layoffs, ZDE, the publisher of Baseline, CIO Insight and eWEEK, also promoted a number of executives. Kirk Laughlin is moving to the managing director post of the Live Event unit, after serving as senior edit...

IDG Expands Ad Network To Outside Blogs

...and b2b focused ad network on websites and blogs outside of the magazine company's circle of publications. As BtoB points out, the IDG TechNetwork has about 100 outside blogs signed up. IDG is sharing revenue with the sites in its network. The move as seen as a way to broaden its news coverage and extend the reach of its advertisers. IDG also...

Circulation Falls at Most Top Papers 

Word Count: 497  |  Companies Featured in This Article: Gannett, News Corp., A.H. Belo, Belo, Lee Enterprises

NEW YORK -- Circulation fell sharply at most top U.S. newspapers in the latest reporting period, an industry group said Monday, with the exception of the two largest national dailies, USA Today and The Wall Street Journal.

Those papers eked out gains of under 1%, while The New York Times, the No. 3 paper, fell 3.9% in the six months ending in March, according to the Audit Bureau of Circulations. Newspaper circulation has been on a declining trend since the 1980s but the pace of declines has picked up in recent years as reader habits change and more people go ...

Up For Grabs: $42 Billion of Newspaper Ad Revenue

goingoutofbusinesssale.jpgHow bad are things in the newspaper industry? Don't ask. After another jarring 3.5% decline over the past six months, print-paper circulation will drop to about 50 million this year--the lowest level since 1946 (62 years ago)....

In ten years, print-paper circulation and ad revenue will likely be a quarter of what it is today, if that.

Why? Because:

  • As circulations and ad revenue continue to fall, print economies-of-scale will reverse, cutting further into already shrinking print margins. 
  • As "green business" practices take hold, a new generation of consumers will come to view the newspaper industry as a horrifically wasteful polluter that eats forests, gobbles fuel and electricity, and farts untold amounts of hydrocarbons into the atmosphere--all to deliver information that might have been interesting yesterday. 
  • A generation of newspaper ad salespeople and ad sales buyers will gradually retire or quit, and advertisers will increasingly ask themselves why they are spending billions on ads they have no idea whether anyone looks at.
  • As financial and environmental pressures increase and a better grasp of reality sets in, more papers will opt to do what the Capital Times of Madison, Wisconsin, did last weekend: Shut down their print businesses, fire a third of their staff, and put what's left online.

And good riddance--if not to the staff, at least to papers. And a hearty welcome to a slightly cleaner atmosphere and less need for recycling.

And here's some more good news: The $42 billion that was spent on print newspapers in 2007 isn't going to vaporize--it's just going to go somewhere else. ($42 billion--in the US alone!)

Ed: Good follow-up report to 'Web 2.0 is Green, Recession-Proof - The Macroeconomic View .' 

Newspaper-Circulation Drop Sharpens

Major U.S. newspapers experienced sharp drops in circulation over the last six months, with the exception of the two largest daily newspapers – USA Today and The Wall Street Journal – which saw slight gains.

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