The latest convulsions in Jann Wenner ’s media empire — Rolling Stone, Us Weekly and Men’s Journal — all point to the ascension of his 23-year-old son, Gus Wenner, into the top spot within the next few years.
Earlier this week, Gus, the third and last son born to Jann and now ex-wife Jane Wenner, was made the head of all digital operations.
“Rightly or wrongly, Wenner has always been run like a mom and pop organization,” said one ex-Wenner person. “And now, pop wants to move on so he’s choosing a successor that he trusts, a ‘Game of Thrones’ [type of move].”
Well, there certainly was some blood spilled. Scott Fedonchik, who was a top marketing executive and the head of branded content, was unceremoniously fired on Monday — a move that one source said was “entirely Gus’s doing.”
“He was fired by phone on the first day of his vacation,” said another insider. “It was cold.”
Fedonchik and young Wenner had not hit it off for months, primarily because of disagreements on how to expand the digital footprint, several sources said.
The company has had fits and starts over the years, alternately embracing digital and then reversing course when it did not produce quick results.
Now, with print ads under pressure and Gus solidly entrenched in the company, Wenner Media appears to be making a big but belated move to embrace digital.
Traffic to RS.com is surging and the younger Wenner recently unveiled plans to launch Rolling Stone Country as a digital-only publication with an editorial team based in Nashville.
One source said that initially, Gus’s objections to Fedonchik were ignored by most insiders. But when Gus took his complaints on digital directly to the top man — his dad — the order was given to ax Fedonchik.
Fedonchik could not be reached for comment, but a company spokeswoman confirmed he is no longer with the company.
But that was not all.
John Gruber, the chief operating officer and a 14-year veteran of the company who was seen as Jann Wenner’s top number cruncher, is also exiting — another victim, apparently, of Gus’s rise.
It seems that in the shift to hand Gus all the digital power at the company, something had to be done with David Kang, who had been handling the digital operation for the past year and is seen as a close Gus Wenner ally.
Kang was elevated to the company’s chief revenue officer — making Gruber expendable.
The COO is said to be ready to join Autism Speaks, a charity founded by former GE Vice Chairman Bob Wright.
In addition, Chris McLoughlin, the publisher of Rolling Stone for the past year, put in his last day at the company on Wednesday. He is jumping to digital ad sales company Undertone as vice president of sales.
Jann Wenner, who founded the company in San Francisco in 1967 — in part with money borrowed from his now ex-wife’s family — is 68 years old, and some have speculated that he might be inclined to sell the company.
But that scenario seems less likely with his young son on board. “The grooming is well underway,” said one insider.
Neither young nor old Wenner was available for comment.
The company has cut its nearly $300 million in debt — piled up when it was forced to buy out Walt Disney’s 50 percent stake in the Us Weekly joint venture — to about $190 million.
For the fiscal year ended Sept. 30, it had revenue of about $374 million. Moody’s in March estimated its debit-to- Ebitda, or earnings before interest, taxes , depreciation and amortization, was about three times, which would put his cash flow in the $60 million-plus range.
Although 70 percent of the company’s revenue comes from Us Weekly, Moody’s recently said it did not think the recent disruption caused to single-copy sales by the collapse of magazine wholesaler Source Interlink would crimp Wenner Media’s ability to meet its $15 million in loan payments this year.
“We believe the company has some flexibility to withstand the expected temporary decline in operating performance as the company transitions to other distributors.”
Newsstand sales contribute about 17 percent of its total revenue.