CONDÉ Nast CEO Charles Townsend, 69 years old, is not going anywhere soon.
He’s renewed his contract to run the glitzy magazine empire with what sources say is at least a two-year deal.
Townsend’s re-upping means he will be around to supervise the transition to the new corporate headquarters at One World Trade Center — which is expected to get underway in late 2014 and to be completed by early 2015.
As the company’s chief operating officer in 1999, he supervised the last corporate shift from its longtime headquarters on Madison Avenue to its digs at Four Times Square.
The company, like many in the industry, is trying to grab more dollars from consumers for its digital offerings while, hopefully, decreasing its reliance on the traditional engine, ad sales.
The contract renewal also means parent company Advance Publications keeps in place an informal “board” of top executives who have been running the magazine empire of The New Yorker, Vogue, Vanity Fair and GQ for over a year as octogenarian Chairman S.I. Newhouse Jr., was gently bumped aside for health reasons.
The board includes Townsend, as well as Condé Nast President Bob Sauerberg and family members Donald Newhouse, the newspaper boss and brother of Si; Jonathan Newhouse, a first cousin of Si and Donald’s who runs Condé Nast International; and Steven Newhouse, the son of Donald who is the chairman of AdvanceNet, the company’s digital operations.
While the leadership has been steady of late, it had been a bumpy ride for Condé Nast through the recession.
The company was believed to have tipped into the red during the darkest days of the US economic slowdown, which forced the shutdown of six magazines and the axing of nearly 400 jobs in 2009.
While it has yet to return to its all-time peak reached before the recession, the luxury markets’ rebound of late means the overall US economy is moving in a positive direction again.
The increase in ad pages in the first half of 2013 was around 3 percent — and its small but growing digital operation saw ad revenue jump 27 percent over the same period, the company said.
Townsend also worked to keep Vogue Editor-in-Chief Anna Wintour happy by giving her a second job — the company’s artistic director, a position established just for Wintour. He is working on a new deal for Vanity Fair Editor Graydon Carter.
Mike, Jeff & David
News earlier this week that Michael Klingensmith, CEO of the Star Tribune Media Company, which publishes the Minneapolis Star Tribune, is the frontrunner to become the new CEO of Time Inc. cheered many insiders.
“Everybody likes him,” said one former Time Inc. executive.
While he may be well met, Klingensmith will have to take some drastic measures to convince people from Madison Avenue to Wall Street that he has the answer to the riddle that is bedeviling traditional media companies as ad revenue moves to digital offerings.
“How do you take someone from the past to create the future?” asked one skeptical advertising executive who places millions of dollars a year in Time Inc. products. “I just don’t see it happening … especially in real time.”
Klingensmith did not return a call seeking comment.
A possible Klingensmith-led Time Inc. also raises the question as to what will happen to the last internal candidate, believed to be Howard Averill, the chief financial officer of Time Inc.
The Klingesmith news did help to quell panic in the ranks that Bewkes was going to turn to American Media Inc. CEO David Pecker.
Sources said Time Warner CEO Jeff Bewkes held at least two face-to-face meetings with Pecker — with cost- cutting and increasing profit margins for the struggling magazine giant very much on the agenda.
One AMI bondholder said that Pecker, through “Herculean efforts,” has managed to keep American Media’s cash flow at $100 million a year.
In contrast, Time Inc. lost $9 million in the most recently completed quarter.
While bankers so far seem happy that Pecker has kept the operation afloat after an earlier AMI bankruptcy, the company still has nearly $500 million in debt — so Pecker may yet have problems down the road.
One AMI bondholder speculated that Pecker — likely under a long-term deal with a non-compete clause built in — was allowed to undertake the talks with Time Inc. only with the blessing of AMI stockholders — including Avenue Capital, Angelo Gordon and Cap Re — with the hope that he could somehow engineer a merger between many of the AMI titles and Time Inc. if he landed in top job.
That must have been a very interesting moment in the talks.
Bewkes, impeccable sources said, blanched at the idea of ever bringing the National Enquirer or the other tabloids into the hallowed halls of Time Inc.
“His legacy matters to him,” said one former Time Warner executive, who admitted Bewkes is aware he “screwed up the last two CEO hires at Time Inc.”
“He does not want to be the guy who turns Time Inc. into the parent company of the National Enquirer,” the source said.
A Time Warner spokesman insisted that the Bewkes/Pecker meeting was just a friendly chat in which nothing substantive occured.
“Jeff Bewkes met with David Pecker once as a courtesy to a mutual friend.”
The spokesman also said, “Time Warner has never contemplated or discussed acquiring all or part of AMI. Any speculation to the contrary is entirely false.”
Klingensmith, 60, was a respected executive for more than 30 years at Time Inc.
He left in 2008, went to work for AdMedia Partners corporate advisors and then in 2010 took over as publisher/CEO of the Star Tribune, a year after it emerged from bankruptcy.
Ann S. Moore, chairman and CEO of Time Inc. from 2002 to 2010, did a pretty good job of vanquishing all her potential rivals from the top ranks of the company.
This, sources said, helped spur Klingensmith’s exit.
Bewkes has been trying mightily to seek a positive solution for Time Inc.’s shrinking top and bottom lines.
In an effort to rid himself of the slow-moving publishing division, he initiated secret talks with Meredith to merge the two companies’ magazines in a new spinoff company.
Those talks broke down in March because the Meredith family — which has a big stake in publicly traded Meredith Corp. — felt a merged company would have been too dilutive to their stake in the company.
At the same time, the family was unwilling to put their TV holdings into the new venture.
When the talks broke off in March, Bewkes decided he would follow the AOL and Time Warner Cable route and spin off the publishing division as its own company.
With the spinoff news, the current Time Inc. CEO, Laura Lang, indicated she would leave when a new CEO is picked.
The spinoff is still on target to happen at the end of the year, and Bewkes seems like he is down to the finalists in a quest for a new CEO.
Stay tuned.