Time Warner’s interest in acquiring the struggling US edition of celebrity magazine OK! appears to be fading. That’s thanks to the latest financial results from the title’s parent company, Northern & Shell, which suggest the mag was still bleeding money at the rate of close to $500,000 a week in the most recent fiscal year.
Total losses since Richard Desmond decided to introduce an American edition in 2005 are a staggering $218.3 million, according to Media Ink estimates, based on the current exchange rate of $1.62 per British pound sterling.
The US magazine’s annual loss for 2010 appears to be just under $25 million, according to a British regulatory filing.
N&S doesn’t specifically break down the Northern & Shell North America numbers. But buried in the filing is the news that the US edition has seen the amount of money underwritten by the parent company grow from a total of $193.5 million to $218 million by the close of the 2010 fiscal year. At the current exchange rate, that means the loss last year amounted to $24.5 million, or about $471,555 a week.
The British version of OK! continues to be highly profitable and remains the top-selling celebrity weekly in the country.
Rumors have swirled that Desmond, who made his original fortune in the porn publishing and video industry, would like to be seen as a more legitimate media baron, but has had a hard time shaking the “Dirty Des” moniker hung on him by the British press.
His TV network appears to be his key focus, sparking speculation that he’ll unload all his magazine and newspaper holdings in Britain, but so far, he appears reluctant to do that.
Last week, in a CNBC interview in London, Desmond conceded for the first time that he was interested in selling the money-losing US version of OK! and he said that Time Warner had expressed an interest.
But a Time Warner insider yesterday told Media Ink, “They approached a bunch of people who they thought would be interested, but it is doubtful we would do anything. It would have to fit and it would have to make money.”
The red ink flowing out of the US version makes that seem highly improbable. One source speculated that there is one target that Time Warner would find very interesting — and that would be a deal for the hugely profitable British edition.
But so far, Desmond has said the rest of the empire is not in play.
Layoff redux
The layoff, which everyone thought had gone out of style after the darkest days of the recession passed in 2008, appears to be rearing its ugly head once again.
Gannett Corp., publisher of USA Today, laid off 40 to 50 people at the Westchester and Rockland paper The Journal News, sources said.
Farther north in Dutchess County, Gannett laid off five at The Poughkeepsie Journal.
Journal News officials could not be reached for comment. The cutbacks come after a particularly brutal round of cutbacks in 2009 eliminated 50 of the 192 newsroom jobs and 20 of the 96 ad sales jobs at that time.
Overall, Gannett axed 700 people, or about 2 percent of its workforce of 22,400. The cutbacks appear to be at the community newspaper level and not at USA Today.
Gannett’s cuts come less than a week after Better Homes & Gardens publisher Meredith Corp. said it was axing 75 people and shutting down the popular D-I-Y shelter magazine ReadyMade that it had paid about $1 million for only five years earlier.
The latest Gannett cutbacks have sparked a new round of outrage against CEO Craig Dubow. He has now had four major rounds of layoffs since August 2008 and forced many workers to take a non-paid furlough in the first quarter of the year with the understanding that it was better than a forced layoff.
Dubow was paid $9.4 million last year — a 100 percent increase over his 2009 pay. His pay last year also included a cash bonus of $1.75 million.
Gannett US Newspaper President Bob Dickey said in an e- mail sent yesterday to the em ployees of the nation’s largest newspaper chain that the layoffs would be revealed to staffers by the end of the day.
“As we reach the midpoint of the year, the economic recovery is not happening as quickly or favorably as we had hoped and continues to impact our US community media organizations,” Dickey wrote.
“While we are seeing improved circulation results and audience growth, weakness in the real estate sector, slow job creation and softer auto ad demand continue to challenge revenue growth in the division,” he wrote.