Executives at Conde Nast Publications are saying that the 77-year-old weekly will turn a small profit this year even after accounting for corporate expenses.
Conde Nast, a unit of privately held Advance Publications, is famously tight-lipped about financials. But people close to the situation pegged the profit at between $1 million and $2 million on revenue of around $100 million. The weekly lost just under $9 million last year and some $10 million in 2000, despite a boom that year that lifted many magazines to record levels.
Because Conde Nast does not reveal financial information, it is impossible to independently confirm the claims of profitability, and some familiar with the operation are skeptical. But Conde Nast's top executives are celebrating what they claim is a stemming of the red ink
|The December issue of 'The New Yorker.'
A gathering of business-side staffers, joined by Editor in Chief David Remnick and Deputy Editor Pam McCarthy, were feted by Publisher David Carey and Conde Nast President-CEO Steven T. Florio at a Nov. 20 party.
Black t-shirts, black cupcakes
"As you all know, we are a privately held company so I can't really talk about profit or loss," Mr. Florio said, tongue in cheek, at the party, which featured black cupcakes and black t-shirts emblazoned ITB, for "in the black." But, he added, referring to Messrs. Remnick and Carey, "they did it. And you did it."
Messrs. Florio and Carey, citing the company's privately-held status, were mum on many details, but Mr. Carey confirmed he'd flirted with the notion of dying his red hair a commemorative black.
The New Yorker under Mr. Remnick remains the magazine world's rough equivalent of doing the Lord's work, and all the more so for being within the status-obsessed corridors of Conde Nast's imposing headquarters. Though profitable when Advance purchased it, losses since then sometimes hit $20 million a year, according to an individual familiar with the financials.
As such, a profit would mark a
One publishing executive -- a fan of the magazine who found the profitability claim plausible -- nonetheless expressed concerns. One interpretation, this executive said: "You've got a hot editor and you can barely break even. If he loses his touch, you're screwed. The difference between making $1 million and losing $10 million on a weekly is very small. Once you lose ad pages, you've still got to publish every week."
Mr. Carey dismissed speculation about whether The New Yorker could sustain profitability. "There's no doubt there will be great years and challenging years," he said. "But we feel great about where we are right now."
Mr. Carey said that the title should finish the year with 2,212.6 ad pages, a 5.1% gain over 2001's pages but still short of 2000's results. The weekly has carried this year a slight increase in the number of special advertising section pages -- which sell at a lower rate than standard pages -- according to Taylor Nelson Sofres' CMR, which counted 272.6 such pages through October. But Mr. Carey said The New Yorker would end the year with about 30 fewer pages in that category compared to 2001.
Circulation is strong, with newsstand up double digits and overall circulation up 7.8% to 924,745. (Rate base, currently 850,000, has risen four times since Mr. Remnick took over as editor in 1998, and another boost is expected next year.) The New Yorker tiers its ad rates according to category, but the cost of an average ad page is around $50,000.
Ms. McCarthy said that editorial headcount has dropped about 10% in the past few years to around 110, and the editorial budget has shrunk somewhat as well. (Staff writers, generally on contract and not included in editorial headcount, total around 30, she said.)
There are doubters within the industry. "[The New Yorker's profitability] is very unlikely, given the economics as I know them," said one publishing executive, who cited his knowledge of industry costs -- although this knowledge does not include access to Conde Nast financials.
'People have no clue'
But Mr. Carey is unbowed. "People have no clue," he said, "how successful this business has become in the last three years."