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While CMP Media has tried to diversify itself this decade, introducing mass-circulation magazines and increasing its presence on the World Wide Web and overseas, the company's revenues and profits still come mostly from the controlled-circulation U.S. publications that drove it in the '80s.

These titles, led by Computer Reseller News, may not be glamorous, but they are lucrative. Last year, they accounted for 72% of the company's $418.1 million in revenues, according to documents filed with the Securities & Exchange Commission for CMP's initial public stock offering (AA, May 5, et. seq.).


The filing offers evidence that CMP's moves into paid magazines and onto the Web have been less successful. Ads in Windows Magazine and properties launched since 1994-HomePC, NetGuide and Web sites-last year generated just 16% of revenues. CMP expects "some or all" of the newer entries to lose money this year.

SEC rules bar CMP from commenting on the offering, but the company expects to begin selling stock in late July, according to one of its investment bankers.

The filing omits many details, including how much money will be raised. While the stock sale could raise up to $115 million, it's unclear how much would go to current owners, to repaying $25 million in long-term debt or to expanding the business.

Figures in the filing give CMP a fair market value of $240 million as of November 1996. Pro forma net income was at $16.1 million last year, triple 1992's $5.2 million and about 69% above the $9.5 million in '95. But revenue growth last year slowed to 9.3%, less than half the growth rate of the three previous years.

CMP's ad pages grew 5.5% in '96 to 38,925 and 5.4% in '95 to 36,912.

CMP is far more reliant on the U.S. than rivals IDG and Ziff-Davis. CMP's only wholly owned non-U.S. title is a French tech bi-weekly. It also has two European joint-venture publications and licenses its titles in 60 countries.

The Leeds family, founders and owners of the Manhasset, N.Y., media company, will retain a special Class B stock with 10 times the voting rights of the publicly traded Class A shares.

"They will have the best of both worlds," one CMP observer said. "They will have total control, they will be cashing out to some extent and they will be paying off debt."

CMP has compensated its executives well. President-CEO Michael Leeds, 44, last year earned $2.5 million in salary and bonus and $6.6 million in restricted stock-a $9.1 million package comparable to the estimated $10.2 million package of a much bigger media mogul, Time Warner Chairman Gerald Levin.

Kenneth Cron, 40, exec VP-president/publishing, was the only non-family member among CMP's five top-paid executives, drawing $6.6 million in total compensation.

Company founders Gerard Leeds, 74, and Lilo Leeds, 69, were each paid $1.5 million. Also on the top-five list is 41-year-old Exec VP Daniel Leeds, Michael's brother, whose compensation package totaled $5.4 million.M

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