Just a little off the top, please.
Reader’s Digest Association CEO Robert Guth is asking bondholders to take a 5 percent haircut on its senior debt.
Nearly $60.7 million has been earmarked for the tender offer. The company said yesterday that it was giving bondholders until June 14 to decide whether to accept the take-it-or-leave-it offer on senior secured notes due in 2017.
The publisher of the iconic Reader’s Digest, which is published in 78 countries, is using proceeds from its recent sale of Allrecipes.com for $175 million to pay off the bondholders.
The company is still bleeding red ink but has been trying to pare debt by selling assets.
In the first quarter of 2012, revenue fell 14.8 percent to $241.8 million, the company announced on May 8.
The decline was blamed on continued softness in its international businesses, weak performance at Everyday with Rachael Ray, a money-losing magazine sold to Meredith in October and declining renewal rates at some North American operations.
That pushed the first-quarter operating loss to $56.8 million.
RDA is exploring the sale of its lifestyle and entertainment direct business, which sells products ranging from exercise equipment to music CDs. The company also said it is looking at possible further divestments internationally.
That would enable it to slim down to a core North American publishing, which would be easier to sell off and allow JP Morgan Chase and Alden Capital to finally shed their role as reluctant equity holders.
On the prowl
Self Editor Lucy Danziger may have succeeded People Managing Editor Larry Hackett as president of the American Society of Magazine Editors, but that doesn’t mean she won’t be raiding rivals.
Danziger just hired Lucy Maher, executive director of content at Hearst Digital, to be Self’s new digital director.
“Lucy [Maher] is coming over to help grow all of our digital properties,” she said.
And how does Danziger balance her new role as an industry cheerleader with her role as editor-in-chief of a competitive magazine?
“I’m still very optimistic about magazines. I think magazines are about to launch on a new growth phase and it’s very exciting,” she said.
Adobe app
The New Yorker will be the first Condé Nast title to go on Adobe’s new software, which is expected to launch a new generation of magazines on smartphones.
The New Yorker could have a smartphone application available before Labor Day, according to some insiders.
Scott Dadich, the vice president of content innovation at Condé Nast, said, “We’re working on it, but we don’t have a specific launch date.”
Bloomberg Businessweek last month unveiled a smartphone app developed in-house that has garnered good reviews. Separately, on the iPad, the mag has generated more than 100,000 subscriptions.
And earlier this week, Meredith Corp. said it was going to be using Adobe to offer smartphone apps for titles including Parents, Fitness and Better Homes & Gardens — also with no official launch date announced.
“We’re excited to publish our leading brands to multiple channels,” Liz Schimel, executive vice president and chief digital officer for Meredith, said in a statement.
When iPad apps first appeared, magazine publishers thought they could be a savior to the industry, cutting the cost of printing and shipping subscription and newsstand copies and replacing them with digital products that cost comparatively less to produce.
It hasn’t quite worked out that way. Hearst President David Carey at a recent conference said the tablet is now regarded as a source of supplemental subscription revenue. Hearst has sold 600,000 digital subs so far and expects to reach 1 million by year-end.
Condé Nast is still pressing ahead with plans to bring out interactive smartphone applications within months as the next evolution. As with the iPad, iPhone apps will be paid for by consumers.
The iPad is not as interactive and freewheeling as a website. Pamela McCarthy, deputy editor at The New Yorker, said that is often by design.
“We do it selectively,” she said. “One of the things about the iPad is that it is a quieter place than the Web, there is less distraction.” But there is still audio, video and the ability to link to outside sites on the Web, but in a more controlled manner than a straight website.
So far, the New Yorker has sold digital subscriptions, but doesn’t give an exact breakout of iPad sales, although clearly they are a big part of the mix.
“There is reason to think that everything we offer on the iPad will also be offered on the iPhone,” said McCarthy.
“We want to be everywhere our readers want to find us, and anyone who’s waited in a movie line or at a restaurant knows that the phone is one of those places,” said McCarthy.