Wednesday, July 29, 2009

Morning Advertiser Watches Sun Set

A downturn in media is tough, but if you are in the pub trade media the world must be awful. With hundreds of pubs closing every week, the fate of the Morning Advertiser, one of the oldest trade mags in the world, looks bleak. Both the Ad Director and the Editor have left, and in headcount won't be replaced we understand. Circulation has been chopped by five thousand to "focus on the most successful pubs". You might have thought it was the least successful ones that most needed the insight provided by the Morning Advertiser. Hey ho. These struggling pubs are being offered a paid subscription - which almost none of them will take up - probably because they haven't got any money.

The MA used to a daily newspaper for the licensed trade. It has faield to get to grips with online, is serving a market decimated by the recession, tax and the smoking ban. Whilst cuttting costs is bound to be necessary, a better plan is needed if this and titles like it are to have any hope for long term survival.

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Informa down

Informa has seen a drop in profits, but mostly due to restructuring costs. With a a good subs/paid info base and a strong events portfolio Informa is better placed than most to ride out the storm - but only if there is recovery soon. Delegate sales to conferences remain tough and will get tougher the longer the recession goes on.

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Thursday, July 23, 2009

He Loves Me, He loves me not, He loves me...

It now appears that Reed Elsevier is not going to sell RBI after all. The new CEO, Ian Smith, has worked out that there are some assets inside RBI that are worth keeping. Total Jobs is having a hard time in the recession but when the economy recovers demand for job advertising will once again increase. Providing Total Jobs doesn't get overtaken by an emerging technology solution, it will prove to be a long term profitable business.

He also likes the data business ICIS, whish serves the chemicals/petro sector. Assets which he can't cross exploit with other Reed assets may yet be sold.

The risk here is that Reed will not be brave enough and end up selling a handful of assets. If the core of RBI is to be retained a radical pruning is required. This is not only about trimming assets, it should also be about a fundamental change in the way Reed does business. Getting rid of half the assets wouldn't be amistake. Not only would this allow RBI to focus on a small number of markets (in the 21st Century media world where we have to be experts in many things not just publishing we might be wise to chose between doing a feww things in many markets or many things in a very few markets) but it should also change the way in which its its overhead base is scaled.

It would bei n the best interests of shareholders if Smith pressed his team to carve out some of the stronger assets as well as just those it considers weak. In other words, RBI should not keep assets just because they still look profitable, but only keep those where it believes it can extract substantial strategic value.

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Thursday, July 16, 2009

Incisive Still Subject of Rumours

Bill Pollack, the head of the US part of Incisive Media said this on his own blog,
"You will by now have seen Tim Weller's email to the full staff at Incisive Media responding to an article that appeared yesterday on the Financial Times' website. Just so we're clear, that article primarily concerned the refinancing of Incisive UK's debt and reported various rumors which may or may not prove to be true"

So the deal is not yet done. There are numerous rumours around about how the negotiations are going on the UK debt. One thing is certain, APAX and the banks have lost a lot of money. Let's hope the management strategy, if the management survive or chose to stay, is better than "we are waiting for the market to recover".

Also note that the US business is financed seperately from the UK business. The US business which includes Risk and American Lawyer is arguably in s abetter plac than the ad based print business in the UK, hence Pollacks distancing.

Tuesday, July 14, 2009

Barking Up the Wrong Tree as Barkers Dies

If you are in b2b media you can't but help but have noticed that recruitment advertsing is a little hard to come by. Barkers, the oldest and one of the most highly regarded of recruitment agencies sunk in to the mire of collapsing revenues and too much debt earlier this month.

Recruitment agencies used to make 10-15% commission on ads that cost thousands of pounds plus the creative fees and the production fees. Now they get to book the odd print ad and lots of job board ads at a £100 a pop. Ok a bit a of a simplification but you get the point. Couple that with a load of debt and phut!. In a prepack deal the Barkers assets have been bought by Penna, just days after 60 staff were laid off by Barkers. Those poor souls won't now even get their redundancy as the leave behind company is wound up. For media companies the position is also grim. Some I am told, are left with bad debts of hundreds of thousands of pounds.

There is nothing illegal about pre pack deals, but it leaves a sour note for creditors and many staff.

Recruitment advertsing is going to be in the doldrums for a t least two years. My guess is that Barkers won't be the last casualty.

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Tuesday, July 7, 2009

RBI has announced it is selling Travel Weekly and Gazeteer to Clive Jacobs - the man who used to own Holiday Autos and has always craved a position of influence in the travel industry. He is rich, but is he wise?

No info on the price paid. It's pretty likely the mag is not worth much but there is money in Gazeteer which is moslty online.

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Bubble Bubble Toil and Trouble

We have known for a long time that business media companies are in trouble. But it is only just now that the chickens are coming home to roost. The failed sale of RBI will be seen as a watershed moment, after which the reality of the horrors we face began to be faced up to.

Investors in Emap have written down the value of their investment. Investors in Incisive (which overlap) are coming to terms with the news that their equity is all but worthless and the banks will end up owning the business.

William Reed has culled at at least 20% of its headcount. Centaur has been doing the same as it struggles on with reduced profits and little cash (but luckily for them little debt) Most other business media companies are reducing their headcount progressively, chasing the revenue downwards and hoping that things will get better.

Every week sees more magazine closures. There is no end in sight to the ad gloom. Recruitment has gone for ever and display is mortally wounded.

The hope in online is often countered by the grim reality of poor ad revenues there too. Emap announced last week that it is putting much of its content behind a subs wall, having discovered that giving it all away is hurting paid copy sales and the extra ad revenue doesn't cover the gap. This flip flop in strategy won't work not least until they stop worrying about print cannibalisation

Everywhere we look the strategies are defensive. Where is the new model? Where is the creativity that will turn the old magazine publishing businesses into growth businesses for the future? Yes there are pockets of interesting things happening in all the business media enterprises, but none of them have a whole business vision.

Meanwhile in idle tittle tattle I hear a rumour that Les Kelly, the Wilmington exec who presided over the closure then sale of Press Gazette is leaving the business.

Thursday, July 2, 2009

Banks Take the Helm At Incisive

The FT reported yesterday that the banks who leant the debt that enabled Incisive Media to grow like topsy are in deep talks with Apax and the management about what to do next. Although Apax want to retain some equity and are prepared to put some more money into the pot the banks appear to have lost patience and now own Incisive in all but name.

You can bet that the FT numbers are not 100% correct but it looks as though Apax will end up being diluted from owning around half the business to owning about 2% of it. The management are keeping something north of 10% (which is a lot given that the banks have lost hundreds of millions and Apax lost its shirt. This isn't a done deal yet and things could yet change.

We should be interested not only because Incisive is a big b2b player but also because we as tax payers own RBS, the main lender. I am sure we all want Tim Weller and crew to make some more money, but lets hope not too much of it is ours.