Friday, December 7, 2012

The end of Whole Living magazine at MSLO does not have to mean... well, the end of Whole Living magazine

I love writing headlines that I, as a publisher, would reject in a heartbeat. But when there is no one around to prevent you from making a mistake, well, just go with it.

Right now a lot of staffers at the Martha Stewart Living Omnimedia (MSLO) property are grieving the news late yesterday that the company has been unable to find a buyer for the title. According to a WSJ report, the title got an offer from a team backed by the PE firm OpenGate Capital, a rather low $2.5 million offer, but the deal fell through.

My guess is that the offer seemed low to MSLO based on what the new owners would get as part of the deal. At issue, generally, is future booked ads, future receipts, past liabilities, and the like. There are a lot of details that need to be worked out to close a deal and sometimes it just doesn't happen.

But Whole Living staffers need to keep their chins up, many titles miraculously find new owners shortly after the doors close. The reason is simple enough, what is sold after a title is closed is usually the branding rights, circulation lists and the things other than hard assets, past booked revenue and liabilities.
You can almost hear that MSLO's chief executive Lisa Gersh is keeping the door open in the quote she gave the WSJ: "Whole Living is a terrific brand in a high-interest category," Gersh said. "Our valuable content will be leveraged across our media platforms and we will continue to look for strategic opportunities to further capitalize on it."

Whole Living has not turned out to be a good acquisition for MSLO. After acquiring the title for $6 million in 2005, the title has turned out to be bleeding red ink. One would think that the product would perform best in an environment like MSLO where there are like titles. But sometimes the opposite occurs, the title gets little bits of the ad schedules acquired by the other titles in the publisher's portfolio, often the title can not attract advertisers that want that particular title by itself.

If a new buyer can deal with a couple years of losses, and if those losses can be lessen through decreased G&A expenses, then maybe it will be a good fit for a new owner. With the last issue scheduled to be the January/February issue, we should find out if, like many of the Reed titles shut down at the end of '09, if a new owners steps up in the new year.