Wednesday, February 25, 2009

EMAP Informs that All Mags are A4

Emap Inform are feeling the pinch. All their mags are going A4 and are to be printed back to back to gain production efficiencies. Some titles will have to change their publication dates to fit.

Erm. And that's it apparently. Just cost savings. No new thinking - at least none thats been annoucned. If the revenue falls some more what next? A5?

The problem that the debt leveraged comnpanies have is that they are having to do everything to save cash regardless of the publishing thinking. You can't blame them for that but if the new model is this:

Less editorial written by fewer journalists, published in magazines that all look the same regardless of what readers want or admire, with fewer pages on crappier paper with no job advertising,

then I fear for the end may come sooner than we feared. There are lots of things that could be done. One commentator rattles on about this here. It may or may not be right, but least its more than just cutting costs.

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Friday, February 20, 2009

RBI Profits Collapse

The scale of the horror of traditional business media is in sharp relief today. Reed Elsevier has produced great results largely because its subs based business is so robust - but the profits from RBI across the globe have fallen to £55m. The report in the FT says this is down from £90m but at the time of the proposed sale the talk was of profits of £150m.

If we valued RBI (Reed Business Information) on the same profit multiple as Centaur who gave a profit warning today, then its market value would be less than £200m! No wonder the sale deal couldn't get done.

Also announced is a £112m restructuring programme for RBI. The current strike ballot over 35 redundancies in the UK is now in sharp relief. There is worse to come.

Let's hope the restructuring programme has some innovation in it as well as cost cutting. Reed says it has no plans to close any titles.

Centaur In more Trouble

Centaur Media continues to stagger from one piece of bad news to the next. For the first time since it floated, the Board has issued a profit warning as recruitment revenues slump by 2/3rds. The thing about recruitment is that every pound of revenue fall is almost a pound of profit fall.

Although costs have been cut and some titles closed, more radical thinking is required and urgently if this business is to be saved from the triple whammy of paridigm shift, recession and management inaction.

The share price is down to 23p (down 1op this morning) valuing the business at around £33m
- more than £100m less than it was worth when it floated. Management and the City have been surprised by the deterioration in trading. Pity they didn't ask any of us eh?

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Wednesday, February 18, 2009

Precision Marketing More important than ever. So we closed the magazine.

Press Gazette reports that Precision Marketing is to be closed with the loss of three jobs. ABC says its circ was around 7000, the announcement from Centaur says the circ was 12000. The editor of Marketing Week says this all refelcts the growng importance of direct marketing in the mainstream marketing mix. Marketing Week will be writing more about the subject which is not so important a part of the marketing mix that it will save the jobs of the three specialist journos who wrote about it.

Cutting through the spin the truth is the title was losing money and it has closed. No amount of corporollocks can hide that. Wouldn't it be more honest to say so (and that they had a strategy for killing off unprofitable small titles and doing something else instead perhaps by launching a highly specialist community site for direct marketeers)

Oh. Maybe this isn't a strategy and just a part of a long series of magazine euthanasias.
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Monday, February 16, 2009

Strike Threat at RBI

Press Gazette reports ahead of Reed Elsevier's results that staff at RBI are holding a postal ballot on strike action to protest about redundancies.

Nobody likes to see job losses, but RBI has the what must be the most generous severance terms on the planet. The reality is that no media company can avoid job losses if it is to survive. RBI has a greater need than most to take an axe to its cost base. If the complaint is about the process that's one thing, if it is about the principle that's another. When it's raining there is no point in complaining that it's cloudy.
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Wednesday, February 11, 2009

EMAP Inform Freezes Pay

Over at Emap Inform, the division where all the mags are, MD Simon Middleboe is freezing the pay of anyone earning over £50k. He his following a trend here and is not the first business media company to take such a view. I think this strategy is unprecedented in previous recessions howver, and is a sign of how tough trading must be. Emap of course is owned by APAX and GMG and has eye watering debts.

Although it is hard to see that the saving is huge (I estimate that not paying anyone in EMAP a pay increase this year would avoid cost increase of around £1m in a full year) it is symptomatic that every penny is starting to count. Intersting that the pay freeze policy only applies to the magazine division which sends an interesting signal. If you are in magazines - you are on your own.
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Wednesday, February 4, 2009

Incisive breaches Covenants

Incisive Media breached its bank covenants in December. With £400m of debt and weakening trading the options are limited. Either Apax will have to inject more capital or there will be a debt for equity swap.

Either way all media businesses with high leverage will be sweating. On smaller deals banks have been prepared simply to rewrite the covenants (for a fee) but on this one, the bank will want to make sure it does nothing to increase its risk exposure.

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Lord Heseltine Still Floating

According the The Austra,28124,24993101-7582,00.htmllian, Lord Heseltine of Haymarket is saying that the recession means his firm will be treading water for a while. I thought treading water was what you did in shark infested waters to keep yourself afloat before you drowned or got eaten.

If it was me, I'd swim for the shore.
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