Is RDA 'Walking' away?

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The Reader's Digest Association-lately subjected to internal and external rumblings over ownership shifts at the Pleasantville, N.Y.-based media and direct-mail giant-is starting small with its next round of changes. The company has retained the Jordan Edmiston Group to explore options for its 654,000-circulation Walking magazine.

RDA acquired Walking from Cowles Media in March of 1997, for a sale price just over $9 million, according to an executive familiar with the deal. At that time, said the executive, the magazine's annual revenue was in the low $20 million range. Jordan Edmiston brokered the original transaction that brought Walking to RDA.

Ad pages for the title have risen somewhat since then. For 1998, the first full calendar year that RDA owned the title, Walking notched 387.8 ad pages, according to Publishers Information Bureau figures. In 2000, it ran 429.9 ad pages. Through April, the six-times-a-year title's ad pages were down 8.2% to 103. For the last six months of 1997, its circulation was 629,042; for the last six months of last year, its circulation was 654,797.

RDA's move to potentially sell Walking has fueled speculation about the fate of its New Choices: The Magazine for Your Health, Money, and Travel, but a company spokesman insisted that magazine was not for sale. Peter Haeffner, publisher of New Choices, declined comment on the status of either his magazine or Walking.

Among companies mentioned as being a possible fit for Walking are Rodale and Weider Publications.

Reader's Digest's track record with magazines other than its flagship has been spotty. In August 1999 it shuttered the money-losing American Health and sold its assets to Time Inc., and in March of 1996 it sold the flagging Travel Holiday to Hachette Filipacchi Magazines for what Ad Age estimated at the time to be around $15 million.

Walking currently employs around 16 staffers.

Last month, RDA made headlines with news that, via a settlement spearheaded by New York State Attorney General Eliot Spitzer, control of about 19% of its common stock would shift from charitable trusts set up by RDA founders Lila and DeWitt Wallace to 13 institutions that had been given blocks of RDA common stock. The shift in control is expected to occur this summer.

While about 50% of RDA's voting shares remain within the Wallace-Reader's Digest Funds hands, an executive familiar with the company said the stock control shift "creates a need to act" for the $2.6 billion company.

This spring, Reader's Digest Association stock has been mired in the high 20s, near its 52-week low of $25.50 and well off its 52-week high of $41.88.

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