To buy Spin from Bob Guccione Jr. and partners, Mr. Miller brought in equity investors Freeman Spogli & Co. and formed the Miller Publishing Group. In addition to Spin, the company includes Vibe, which Mr. Miller and music maven Quincy Jones acquired from Time Inc. a year ago.
"We're anxious to make other acquisitions" or to launch titles, said Mr. Miller, who declined to discuss likely targets.
He said the company is also interested in pursuing TV projects related to the magazines. A syndicated Vibe TV show starts airing in August.
'VERY GENEROUS' SALE PRICE
Spin is said to have had revenue of $20 million last year, but a profit of just $1.5 million to $2 million. If accurate, the sale price-characterized by one insider as "very generous but not unbelievable"-represents a rather high multiple of about 20 times earnings.
It reflects Mr. Miller's belief that he can significantly increase revenue and boost profits, in part by consolidating the back-office operations of the two magazines.
"I don't think it is a real good deal for [Mr. Miller's] backers," said Kent Brownridge, general manager of Wenner Media, publisher of Spin rival Rolling Stone. "Unless there is something very magical about this property I don't know about, I would be a little bit mad if I were backing him."
Mr. Miller declined to discuss financial details of the deal but said, "I think Spin and Vibe, properly managed, will both continue to have growth."
John Rollins, who was publisher of Spin before jumping to Vibe, will become group publisher of both. Michael Hirschorn, a former editor at New York Magazine, will become editor in chief of Spin.
Mr. Guccione steps down as editor and publisher 12 years after founding Spin. He said he will use the proceeds of the sale to start a men's magazine next year. Mr. Guccione said he will make $16 million on the deal. Stephen Swid, a 51% partner in Spin, is also cashing out with the sale.
GUCCIONE PLANS NEW MAGAZINE
"There is no perfect time to walk away from something you love," Mr. Guccione said, adding that at age 42, he didn't always trust his instincts in continuing to edit a music magazine aimed at a younger audience.
After he left Time Inc. Ventures as president in November 1995, Mr. Miller formed Gold Rush Media. He joined with Mr. Jones and David Salzman to form Vibe Ventures and acquired Vibe from Time Inc. in April 1996.
Mr. Miller and his partners bought at the right time, given that Vibe was on the verge of profitability and has had strong advertising and circulation growth since.
According to Publishers Information Bureau figures, Vibe's ad pages through April stood at 231.6, up 24% from the previous year. Total circulation for the second half of 1996 rose 25.8% to 458,673, according to the Audit Bureau of Circulations.
Spin's circulation increased 11.4% for the second half of '96 to 504,412. Ad pages rose 4.5% to 285 through April.
Miller Publishing will look for ways to combine the two music/culture titles for