The magazines were sold last week by financially stressed Lang Communications at a fire sale price estimated at $15 million with very little upfront cash, industry executives said.
MacDonald CEO Jay MacDon-ald declined to disclose terms, but insisted he will make a "substantial investment" to turn the magazines around and extend into ventures like TV and professional conferences.
"The titles have strong brand name recognition," he said in his first interview after the buyout. "They're widely recognized titles in their own rights."
A key backer of Mr. MacDon-ald's fledgling publishing concern is publicly traded Paxson Communications, a West Palm Beach, Fla.-based owner of 38 radio stations and 34 TV stations.
Interestingly, there is a financial connection between the magazines' new and former owners. Several holding companies controlled by Sandler Media Group-the New York investment firm that pumped $10 million into Lang Communications in 1994-hold about 6% of the stock in Paxson, according to documents on file with the Securities & Exchange Commission.
In addition, Sandler partners John Kornreich and Michael Marocco sit on Paxson's board. But Mr. MacDonald insisted Sandler will play no role in operating the magazines.
"MacDonald Communications Corp. had borrowed funds from Paxson Communications Corp. to finance the transaction," he said.
Officials at Sandler Media and Paxson didn't return calls seeking comment.
Freed from the $15 million in bank debt and high corporate overhead, Mr. MacDonald thinks the titles can be profitable even though the ad page falloff for company flagship Working Woman was 22.4% through April while Working Mother was off 11.9%. Ms. takes no ads.
"It's going to take a long time to come back-at least two or three years," said Page Thompson, exec VP and USA media director at DDB Needham Worldwide, New York. The magazines "need someone with deep enough pockets to invest in the editorial and the circulation so that they are not giving the product away."
LANG GETS NO CASH
Dale Lang, the CEO who rescued Working Woman from bankruptcy nearly 20 years ago, walked away with no cash in the deal and surrendered all equity in the magazines, as expected (AA, April 8).
Although new owners typically make sweeping personnel changes, Mr. MacDonald insisted he has no such plans: "I have an enormous amount of personal respect for the people that are here. They held these titles together."
One person he will have to replace is Working Woman Editor in Chief Lynn Povich, who announced she will leave on June 17 to become a consulting editor to NBC's and Microsoft Corp.'s MSNBC Interactive.