IT’S shaping up to be the summer of no deals in the world of magazines.
The biggest deal not getting done is Us Weekly, as Wenner Media owner Jann Wenner, who was said to be quietly testing the waters to sell the celebrity weekly for a blockbuster price of $750 million, has apparently broken off the talks.
“It’s not happening,” said one insider with knowledge of the discussions.
A Wenner spokesman insisted, “We have said all along Us Weekly is not for sale.”
Last year, US Weekly was said to have cleared a profit of close to $75 million. But as successful as the magazine has been under Wenner, there has been a vague sense that at some point the celebrity-fascination segment of the magazine business could plateau or decline.
One source said that Wenner never went the traditional route of trying to put together a “black book” of key financial data to send out to suitors in preparation for an auction. But in recent months, he did make quiet approaches to parties he thought would be interested.
At the same time, Wenner has been cracking down on a host of expenses inside the company, getting rid of copying machines and requiring managers to approve the use of messengers.
One source said that Wenner realized that every $1 million he saved the company could translate into $10 million in his pocket if he was able to sell the property at a multiple of 10 times operating profit.
Last week, the New York Observer revealed that Wenner has also been looking to pare costs in another area by changing the oversize magazine format of Rolling Stone, still considered the company’s flagship despite being eclipsed long ago by Us Weekly on a profit basis.
While the magazine has seen its advertising slump this year after a big 40th anniversary issue in 2007, Rolling Stone is holding up with respect to its readership, and recently boosted its rate base to 1.45 million per issue.
One source said that Wenner had committed to the action for this fall after showing a new prototype to advertisers, but an official spokesman insisted, “No final decision has been made yet.”
No deal
Us Weekly isn’t the only deal that is not getting done.
The big stall seems to have set in at Entrepreneur Media, which has been owned by Peter Shea for the better part of two decades.
Shea was seeking $200 million to sell the magazine that he purchased from bankruptcy in the mid-1980s.
The rationale for the price was that the late Bernie Goldhirsch got $200 million when he sold Inc. magazine in 2000, and Shea is said to have always looked at that as the benchmark for his magazine.
But that was a different era.
Despite defection of key staffers and at least one legal challenge over the name, Shea still managed to attract a joint bid from Austin Ventures in New York and Boston-based Castanea Partners.
A source said that they are willing to pay up to $160 million in the form of $120 million in cash up front and another $40 million to be paid if the company hits certain performance levels.
Jim Casella, a former executive at Reed Business Information and earlier at International Data Group, is expected to take over Entrepreneur Media.
But the venture partners are running into the same problem as everyone else: While they try to hold down their own equity outlay and risk, they have found that banks are getting increasingly skittish about issuing debt.
Executives at Entreprenuer Media, Castanea and Austin Ventures all declined to comment.
No sale
Add one more to the no-deal ledger.
Richard Ekstract said he isn’t going to sell Hamptons Cottages & Gardens and its three sister titles.
Several big regional players, including Jason Binn‘s Niche Media and the Kong brothers’ Modern Luxury, declined to bid.
Sandow Media was said to have looked, as did some private-equity players, but Ekstract said he didn’t think any of the offers were viable.
“It’s off the market for the time being,” he said. “To sell cheap is not in my game plan.”
New game
There’s a new sports daily on the scene. But this one comes with a twist.
“It will be delivered to your computer’s mailbox at 7 a.m. every morning,” said Ed Baker, publisher of The Sporting News, which is launching the daily service beginning today.
“It’s not a Web site, this is a 24-to-30 page daily paper, delivered digitally,” he said, adding that low production costs make achieving a profit easier.
The Sporting News is a part of American City Business Journals, a unit of the Newhouse family’s Advance Publications. It was purchased in September 2006 from Paul Allen‘s Vulcan Ventures.
Only one
It appears that the one thing a copycat can’t stand is another copycat.
The celebrity blogger known as Perez Hilton, whose real name is Mario Lavandeira, is fuming that someone is causing confusion with his name, which in itself is often confused with the celebutard Paris Hilton.
According to the Los Angeles Times, Lavandeira on Monday sued Infuse LLC, Margie E. Rogers and Elizabeth Silver Fagan in federal court in Los Angeles, claiming deceptive trade practices involving Perezrevenge.com, a Web site that routinely skewers and critiques the Perezhilton.com Web site, which routinely skewers celebrities.
Infuse, Rogers and Fagan are allegedly the people behind Perezreveng e.com
Lavandeira claims that the new site creates confusion in the eyes of the public, who may be led to believe that it “is associated with and/or otherwise authorized or endorsed by Lavandeira.”
But, as the LAT pointed out, there seems little danger of that.
One recent post on Perezrevenge began, “Mario Lavandeira aka Perez Hilton has once again twisted the facts so that he can spew his garbage, churn the rumor mill because he never tries to confirm a thing he writes.” keith.kelly@nypost.com