Thursday, June 17, 2010 battles Folio: over sale rumors involving the former RBI construction magazine titles

I suppose there is some enjoyment to be had in watching and Folio: battle it out over a rumor published the other day on the Folio: site. The contest revolves around rumors of a possible quick sale for the construction titles formerly owned by RBI.  But in the end, it is the fate of some once-formidable trade titles that is at stake, so any enjoyment is short-lived.

Background: as part of Reed's massive divestiture Building Design+Construction, Custom Builder, Construction Equipment, Housing Giants, Professional Builder, Professional Remodeler and Construction Bulletin were sold off to their former publishers Tony Mancini and Rick Blesi, with a new company formed, MB Media. But the new entity has been rather slow in getting off the ground with, for instance, new websites only just launching. But those new sites are typical trade media-think: simple sites designed to promote print magazines, no news, no content that would drive web traffic.
Just yesterday Folio: reported that Blesi and Mancini were shopping the titles -- even using the word "aggressively" when describing effort.  Today, however, talked to Rick Blesi who told the Crain Communication site that they weren't shopping the titles. “I assure you we have not initiated a single one of the dozens of conversations we have had with suitors, including Cygnus,” Blesi is quoted as saying.

But it sounds more like Folio: is correct. Saying that they did not initiate the contacts is hardly the same as denying that they want to sell them.

(I have a disclosure, of course: I used to work in the construction market -- first at McGraw-Hill's Construction Information Group, and later as publisher of Roads & Bridges at SGC. I also approached a couple of equity companies in a desire to see if I could secure funding so I could approach RBI. But RBI's B2B titles are being treated like lepers by the traditional NYC equity community.)

Relaunching the print titles so that they can rebound and become profitable sounds like the longest of long shots. The other option, of course, is relaunching in hopes of selling them at a profit and then quietly exiting the B2B industry with a fair amount of cash (though my guess is that Reed will end up with the lion's share of the proceeds.)

The third option, which I would have pursued, would be to use the data owned by the titles to aggressively position the titles in the electronic media world. B2B firms, except those associated with tech, have been the slowest segments to adopt mobile and tablet mediums -- and the web efforts in construction really have been poor.

The print products could be continued, I suppose, but their print runs would have to been severely cut back. Some of the RBI properties were clearly moving in this direction: BC+D claimed 22 percent of its circ as digital-only; CE's print circ had fallen to 67K from 80K a decade ago; but Professional Builder was still distributing over 100K print editions as it tried to keep up with Hanley Wood's Builder, which with its dominate position could still claim that 100 percent of its audited circulation was print.

The whole construction segment is up for grabs. With McGraw-Hill losing the AIA contract to Hanley Wood I could see my former employer selling off both Progressive Architecture and the venerable Engineering News-Record. But who would buy them? McGraw-Hill owns a killer URL with, but with their information services of Sweets and Dodge they would not be eager to sell off that address.

Were this the nineties, a NYC PE firm like VSS would jump in and buy out the whole lot of 'em. But most of these properties are pretty stripped down already -- especially in the area of sales, where cutbacks have forced many reps to handle multiple magazines, and publishers to manage multiple titles. Editorially, although I will admit that I haven't paid as close attention during the past few years, my impression was always that the editorial calendars who hard set, with few new ideas and little actual journalism going on. They were, simply, tired.

Ultimately, the fate of many of these books may have been determined by the terms of the sales agreement with RBI. Likely the new owners are not heavily indebted, but will have to share proceeds of any sale with the guys in London. This might give them a chance to start fresh, but unless there are big bucks out there to be spent, going in a completely new direction might be difficult. While it might be possible to print an issue based on ad sales, cutting the print run, if necessary, and keeping things tight, it would be hard to bring in developer and programmers -- the types of positions that publishers need to create today.

So who is right, BtoBOnline or Folio:? Both, in a way. But my bet is that eventually Folio: will be proved correct.