Business

Publisher Modern Luxury looking for a buyer


Modern Luxury Media, publisher of regional magazines like San Francisco, which last week won a General Excellence prize at the National Magazine Awards, has put itself on the block.

The company publishes 26 magazines, including freebie city titles such as Angeleno in Los Angeles and Manhattan in New York, five bridal magazines, two interior design titles and three hotel mags.

“Our shareholders have made a strategic decision to seek a new equity partner or a buyer to support the future development of our company,” said Modern Luxury CEO William Cobert in an e-mail this week to his employees.

Cobert, who used to run Ebitda Media, a workout firm, was named CEO of Modern Luxury in February after lenders including New Star and GE Business Financial Services, seized control and tossed out founder and CEO Michael Kong.

Kong launched the company in 1993 with Chicago Social magazine, but went on a massive expansion kick after Roy Disney’s Shamrock Capital Growth Fund injected $50 million into the company in 2004 as part a partnership they formed.

Kong was said to have defaulted on $120 million in debt that the company piled up when it began its expansion binge and later bought out Shamrock.

Cobert said, “Several external parties have recently approached us with offers to invest in or buy MLM.”

In his e-mail to employees, Cobert said he believes the long dormant ad market is finally coming back to life, and cited a 15 percent jump in ad revenue booked for May issues as the evidence. Overall, Modern Luxury said it has booked 2,175 advertisers for 2010.

“Given the level of interest in our company that has already emerged, we anticipate this process moving forward quickly with completion targets for this summer,” said Cobert, who has retained the New York-based investment bank Berkery Noyes to handle the process.

Sad life

Life & Style magazine recently let go of about 20 percent of its staff, prompting another flurry of rumors that the Bauer Publi cations-owned gossip mag azine could be facing a new round of trouble.

Through the first 10 is sues of this year, during what was a miserable quarter for most celeb rity weeklies, Life & Style missed its rate base 50 percent of the time. The rate base is the minimum number of copies a magazine promises it will sell. Life & Style’s rate base is 400,000.

A Life & Style spokeswoman insisted that the staff cuts were not part of a downsizing, but instead were the result of the magazine pushing for more news stories and fewer fashion stories.

“Life & Style has been performing extremely well in this tough market,” the spokeswoman insisted. “The magazine is focusing its attention on breaking news and exclusives now more than ever. We have made small changes to our staff as a result.”

OK! changes

Meanwhile, OK!, another celebrity weekly, has decided not to replace Lori Burgess, who resigned as publisher this week to join e5 Global Media as publisher of The Hollywood Reporter.

Instead, OK! is promoting its Eastern ad director, Mary Beth Wright, to the job of associate publisher — a move many see as a cost-saving measure.

Although the weekly is boasting that its ad sales are up, it is different from many other magazines in that it makes the bulk of its revenue from newsstand sales.

And like other titles in the celebrity category, the first part of the year was difficult. OK! missed its rate base of 800,000 on about one- third of its issues, according to the Audit Bureau of Circulations.

To help stem the losses, the magazine boosted its cover price to $3.99. While that brings in more revenue for each issue sold, it also traditionally causes some consumers to stop buying it, hurting circulation.

“With a recent price hike to $3.99, OK! Magazine is achieving an even higher level of profitability and is committed to investing in its long-term growth,” a spokesman said.

Many observers think that e5 CEO Richard “Mad Dog” Beckman‘s decision to hire Burgess, a consumer-magazine publisher, is part of his strategy to lure more consumer advertising and give the Tinseltown trade publication a glossy sibling.

keith.kelly@nypost.com