Hearst Magazines Chief Marketing Officer Michael Clinton is "optimistic" about ad prospects. But for many publishers who have experienced two straight years of ad-page declines, optimism is tinged with caution. "The advertising environment will be somewhat better in '03, but I'm not sure anyone can predict it will be significantly better," said Primedia CEO Tom Rogers.
With little organic growth likely, the question is whether publishers will seek growth through acquisitions. Again, there's little agreement on the answer.
A standard talking point of magazine executives-some of whom have a vested interest in pumping up deal opportunities-holds that the magazine world is ripe for consolidation. To a greater degree than other major media, the sector is still largely populated by privately held companies more beholden to one family's or founder's vision and idiosyncrasies than Wall Street's wishes for quarterly profit growth.
Among them: Conde Nast Publications, Wenner Media and Rodale. Hearst Magazines and Gruner & Jahr USA Publishing are also privately held, although more profit-conscious. And there are still a slew of single-title outfits publishing such titles as Worth, Gear, Outside and Working Mother.
American Media Chairman-CEO David Pecker predicts that at least one major publishing company will be sold in 2003. (He picked off a long-coveted operation recently, buying Weider Publications.)
But sales require sellers. And it could be hard to convince owners of closely held companies they should sell just because other media segments have consolidated mid-tier players out of existence. "That's a convenient fantasy of the behemoths," said Rodale President-CEO Steve Murphy.
Over in the newspaper world, an expectation-one repeatedly frustrated-is that the Federal Communications Commission will soon move to loosen regulations governing the ownership of TV stations and newspapers in the same markets.
Gannett Corp. Chairman-CEO Douglas McCorkindale said he had "give[n] up waiting for the FCC to deregulate."
While crystal balls remain cloudy, there are some players clearly worth watching.
* Ann Moore. Time Inc.'s new chairman-CEO has repeatedly referenced a desire to slash expenses by an additional $100 million. Since she took the helm, two magazines were shuttered, the company's consumer-marketing department was reorganized and new exec VPs were installed. Then there's the evolving relationship with corporate sib America Online.
* David Pecker. Twice the bridesmaid at high-profile magazine marriages (Times Mirror and Emap USA), he now has his first big acquisition-and needs to intregrate Weider into American Media.
* Gannett Corp. Will America's largest newspaper player continue to see opportunities overseas-as suggested by its late-'02 deal for Scottish publisher SMG, and its ownership of Britain's Newsquest?
* Primedia. The big issue is whether signs of stabilization will make its stock more desirable to investors, despite a complex financial structure and heavy debt load.