Hours before John F. Kennedy Jr. boarded his Piper Saratoga, he left his Manhattan office hopeful about the survival of his struggling magazine, George. Just that afternoon, Mr. Kennedy had met with Hachette Filipacchi Magazines' top executive and come to an understanding: Mr. Kennedy would craft a new business plan for George to prove its continued viability.
The July 16 meeting ended on a positive note, said Jack Kliger, Hachette president-CEO, with both men feeling they were closer to a plan that would keep George housed at Hachette. Mr. Kennedy was to polish his ideas over the weekend and planned to discuss them with Mr. Kliger last week. If they were unable to reach agreement, the most likely alternative was for Hachette to sell its stake to another publisher.
Neither could have imagined how drastically those plans would change. As the world learned last week, Mr. Kennedy, 38, died when his plane crashed into the seas off Martha's Vineyard. Also killed were his wife, Carolyn Bessette Kennedy, 33, and sister-in-law Lauren Bessette, 35.
PUBLISHING THROUGH '99
George will definitely continue to publish through year's end, Mr. Kliger told Advertising Age. What happens after that depends on what decision he and the Kennedy family reach in the coming weeks.
Mr. Kliger will begin talks this week with representatives of the Kennedy family. George is a 50/50 joint venture between Mr. Kennedy's company, Random Ventures, and Hachette.
It now appears Hachette has no interest in selling its stake to another publishing company. That seems to leave the trustees of JFK Jr.'s estate with three choices: cease publication; allow Hachette to take full ownership; or select someone to head Random Ventures and continue with a revised business model.
Founded in 1995, George generated a following among Kennedy enthusiasts. But it never grew beyond a circulation of 400,000, although its initial goal was to reach a circulation of 500,000 by the end of 2000.
Circulation for the last six months of 1998 actually declined 5% to 403,894, just squeaking past its guaranteed rate base of 400,000, according to Audit Bureau of Circulations figures. Ad pages for the first half of this year declined a sharp 30.3% to 214.20, according to Publishers Information Bureau.
Since he joined the company as president on June 1, Mr. Kliger had explored options with Mr. Kennedy.
"The first was to create a revised business strategy as to how to make this magazine viable," said Mr. Kliger. "Concurrently, we were looking at alternatives if we both decided that Hachette Filipacchi was not the right partner for George. The agreement was that I would not pull the plug on the magazine and he would not look for another publishing partner."
OUTSIDE INVESTORS EXPLORED
Mr. Kennedy was poised to assume more of the publishing duties at George and was even exploring bringing outside investors into Random Ventures to help fund the monthly. Although Mr. Kennedy was a 50% partner on paper, Hachette provided all the capital. And, in recent weeks, Mr. Kliger had made clear that Mr. Kennedy was free to sound out financial investors for Random Ventures--but not potential buyers of the Hachette stake.
In fact, five days before his death Mr. Kennedy traveled to Toronto in hopes of selling a stake in Random Ventures to a group of investors led by Keith Stein, VP-corporate affairs and executive assistant to the chairman at Magna International, a Canadian auto-parts company.
In a statement last week, Mr Stein said, "[Mr. Kennedy] had provided some very rough numbers. We were at a preliminary stage, but both were very keen about it."
Mr. Stein owns an Internet company called Americanpresidents.com and believes George has the potential to build a stronger online presence.
In May, Mr. Kennedy had asked Publisher Steve McEvoy and Associate Publisher E. Michelle Amlong--both appointed by David Pecker, former president-CEO of Hachette--to leave.
He wanted to hire a publisher of his own choosing who shared his goals for the magazine, and would be willing to leave Hachette if necessary, said one executive close to the magazine. Both positions are still vacant.
The September issue of George goes to press this week, and Executive Editor Richard Blow is expected to edit the last three issues of this year.
Copyright July 1999, Crain Communications Inc.