The news was taken by media executives to mean Primedia's internal identity struggle had ended. "Primedia reached the judgement that they're much better at being a niche publisher than they are at publishing large mass titles," said Jason Klein, the former CEO of Times Mirror Magazines.
Reduction of debt load
The announcement comes after
Mr. Rogers said the Seventeen decision reflected the company was "off to a new chapter" after meeting its debt reduction goal. Asked about a change in focus to niche media, Mr. Rogers said, "In some sense yes, because some other people may have ideas for how to grow [the properties] that go beyond our ability to grow it, given where our concentration" lies.
Primedia had fielded previous overtures for Seventeen, including one from Conde Nast Publications, according to someone with first-hand knowledge of the situation. Management consultant Capstone Consulting had been studying Primedia's operations, Mr. Rogers confirmed, but he denied Capstone's work had anything to do with the decision about Seventeen.
A spokeswoman for Conde Nast, which just officially launched the long-in-development Teen Vogue, would not comment on any aspects of the situation. Gruner & Jahr USA Publications, which publishes YM, and Hachette Fillipacchi Magazines, which publishes Elle Girl, are interested in acquiring Seventeen. A key executive at Time Inc., which publishes Teen People, downplayed the company's interest, and a spokesman for Hearst Magazines, which publishes CosmoGirl, did not return a call.
Sale price: $200 million?
For 2002, Seventeen and the other properties are expected to post around $15 million in earnings before interest, taxes, depreciation and amortization on revenues of around $100 million. Executives interested in the title expect to see financials late this week or early next week. Even without them executives nonetheless expect the sale price to top $200 million, owing to the singular position of the title and the expected presence of Conde Nast -- which one executive waggishly called "the drunk at the poker table with a fat wallet."
Seventeen, with a circulation of 2.4 million, remains the category leader, but its most recent performance has been somewhat shaky. Single-copy sales for the first half of 2002 declined 21.5% to 370,350. Ad pages rose 0.5% to 1,342.1 in 2002. The category has seen intense competition owing to new entrants such as Teen Vogue, Elle Girl and CosmoGirl, and media buyers and other executives say discounting of ad rates in the niche has intensified.