ANOTHER round of cuts has hit Fortune, this time at its little sister title, Fortune Small Business.
Known by the initials FSB, the magazine is axing 14 of its 17 editorial staffers, including its editor Dan Goodgame, a 20-year veteran of Time Inc.
FSB was run essentially as a custom-published magazine for small business holders of American Express cards, but because it had controlled (in other words, free) circulation of around 1 million, it was considered a lucrative add-on to the main magazine for ad-sales purposes.
And though it was carried under the Fortune/Money Group umbrella, it was conspicuously left off the CNNMoney.com Web site when that was revamped a year ago. That raised concerns then that FSB’s editorial staff were being given second-class citizen status.
Confirmation of that came yesterday.
Now the magazine will be part of Time Inc.’s Content Solutions division.
Goodgame was given the word last Friday that he was out. He could not be reached for comment.
His longtime No. 2, Brian Dumaine, FSB editorial director, will stay on board to run the magazine, but he’ll have to pull staff and freelance writers from the Content Solutions unit.
Dumaine will still report to Fortune’s Managing Editor Andy Serwer.
Despite the magazine moving its editorial to Time Inc. Content Solutions, the company says that it has not surrendered editorial control of FSB to main American Express, or any other advertiser.
“Time Inc. has final editorial control over Fortune Small Business,” said a Time Inc. spokeswoman.
Asked why the editorial team team is now being drawn from the custom publishing unit, which traditionally produces magazines approved by specific clients or advertisers, the spokeswoman said, “it was a combination of looking at costs, plus they have a wide net of jorunalists internally and freelance who cover a lot of different industries. FSB covers a lot of different industries and it just made sense to draw on those resources.”
The side of the company that sold the ads remains in place. Hugh Wiley, publisher of Fortune, will continue to have control over the ad sales operation.
The magazine was running about 400 ad pages a year and was believed to be profitable.
The magazine grew out of a complex relationship that Time Inc. carved out years ago with American Express Publishing. FSB was originally known as Your Company.
The small business title was the only magazine that was folded into Time Inc. and became part of Fortune.
“FSB was profitable, but we’re continuing to look at all of our costs,” said a Time Inc. spokeswoman, who confirmed the cutbacks.
Earlier, the main Fortune magazine had gone through its own downsizing in which editors and writers exited the magazine with so-called “voluntary packages.”
Many understood that if they did not accept the voluntary package they’d most likely be ousted. Insiders said that the head count at the main mag azine was to drop by 15.
Meanwhile, on Monday the Fortune/Money group had tapped Fortune Associate Publisher John Donnelly to be the publisher of Money, replacing Brett Wilson, who left for USA Today after only 10 months on the job.
Living 2.0G
It just might turn out that guys are into homesteading more than women during these troubled economic times.
Last month, Condé Nast said it was suspending the fall/winter edition of Vogue Living, a sporadically published money losing shelter magazine. And while Condé Nast made a vague promise that it was evaluating plans for a spring edition, many think that given the widespread ad shortages looming, the magazine is gone for good.
In contrast, Rodale is unveiling plans to press ahead with a second issue of its spin-off shelter title for the guys, Men’s Health Living. Rodale published an issue a year ago.
David Zinczenko, Men’s Health’s editor-in-chief, said MH Living had a phenomenal sell- through rate of more than 50 percent.
He said the “draw,” the amount of copies that the publisher puts on newsstands, was 375,000 copies, and it sold around 200,000 out of the gate at $4.99 a copy. Typical sell-through rates hover around one-third of the draw.
Now with a second issue looming, Rodale is pushing the envelope and taking the somewhat risky move of hiking the cover price by $1 to $5.99. Newsstand distribution will also be increased to 450,000 copies.
With advertisers in the first issue including Armani, Chanel, Calvin Klein Home, Joseph Abboud Home and Nautica Home, he said the magazine posted a profit.
Technically, Rodale is not calling the magazine an official “launch” since it doesn’t have a permanent staff and still isn’t soliciting subscriptions. Instead, it’s termed a “newsstand special.”
“Men have always cared about this stuff, but the traditional men’s magazines weren’t covering it,” said Zinczenko.
He said Rodale found in market research that men would more than likely turn to an IKEA catalog as an authoritative source of information on home design.
“I think guys are realizing if they want control of their lives, it means control over their environment as well,” said Zinczenko.
The latest magazine will hit the first week of December.
Good thing
Susan Lyne, who stepped down as president of Martha Stewart Living Omnimedia earlier this month, appears to have gone out a winner.
The company yesterday reported that it swung to a second- quarter profit of $1.7 million, compared with a year-earlier loss of $7.8 million. Revenue rose 5 percent to $77.1 million, compared with $73.1 million a year earlier.
Merchandising, thanks to a deal with Macy’s and the introduction of Martha Stewart craft lines at Wal-Mart, the nation’s largest retailer, were a big reason for the gain.
Wenda Harris Millard, co-CEO, said that the company’s media businesses “outperformed the print industry over the first half of the year, validating the strength of our titles as well as our ability to deliver high-impact ad programs to marketers.”
Publishing revenue declined by 2.5 percent to $46.3 million from $47.5 million a year earlier, primarily because the company shuttered its lifestyle title, Blueprint. It also scrapped a prototype project for a magazine aimed at an older female audience, which never actually launched.
The company said that ad revenue at its core brands rose 6 percent.
Broadcasting improved to a $900,000 profit, compared with a $900,000 loss a year ago.
Internet revenue fell to $3.2 million in the period, compared with $5.2 million a year earlier. The company blamed its shift of Martha Stewart Flowers to the Merchandising group from the Internet group.
Robin Marino, the other co-CEO, said sales of Martha Stewart-branded products were “strong in the second quarter despite the difficult retail and economic environments.”
The segment also benefited from the newly acquired Emeril Lagasse franchise.
Attention continues to focus on what Lyne is going to do next in the media world – something she is keeping close to the vest.
Aside from finally having her much delayed lunch with Time Inc. CEO Ann Moore, she is playing it close to the vest. Moore and Lyne had insisted that the lunch was only a friendly catch-up among friends.
“I’m sticking with my plan,” said Lyne. “I’m not going to make any decisions until after Labor Day.”