Rodale's Murphy maps aggressive expansion

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Steve Murphy, who arrived in Emmaus, Pa., just three months ago as Rodale's president-chief operating officer, is ready to roll out an ambitious expansion plan.

In three years, the company seeks to have "established major properties for men and women in each of three age zones"--teens, young adults and baby boomers.

Currently Rodale is "very strong" in the women's boomer space with the 3 million-circulation wellness title Prevention, and among young adult men with 1.6 million-circulation Men's Health, Mr. Murphy, 45, said. MH-18, a spinoff that first appears on newsstands next month, takes care of teen boys.

That leaves young women, teen girls and middle-age men. The company is open to developing new titles or acquiring existing ones, Mr. Murphy said.

He also made it clear the company expects proposed new titles to be big. "We would like a mass title" in each area, he said, with circulation goals of 750,000 to 1 million.

MOVE 'MAKES SENSE'

All of this comes at a time when the future of subscription and single-copy sales look bleak, and Rodale has seen a steady stream of top managers depart.

"It's a very aggressive plan," said Kim Mac Leod, now managing director for investment banker De Silva & Phillips and the first publisher of Men's Health. "They already have strengths in the men's area. For them to move into more of a horizontal approach makes sense."

But, she added, "it will be more difficult" for Rodale to succeed in the other age groups for women. "The girl's teen market is so crowded, so filled with very, very deep-pocketed players that it will be very challenging."

In December, Rodale folded New Woman, a 1 million-circulation young women's title it acquired from Primedia in 1997.

Some question the company's move into the male teen space as well. Rodale is attempting the first broad title--albeit one with a sports hook--aimed at the demographic since Lang Communications folded short-lived Sassy spinoff Dirt after just seven issues in 1994.

TURNOVER

But can Rodale stay the course Mr. Murphy outlined--especially after it folded New Woman?

Rodale has lost several high-profile executives. In June, Rodale Books President Pat Corpora left the company. Mr. Murphy's predecessor, Robert Teufel, stepped down in April. Magazine division President John Griffin resigned in January. Men's Health founding Editor in Chief Mike Lafavore left in October, while longtime Publisher Jeff Morgan left for online venture Ralph Lauren Media in January. His successor, Jane Turner, followed him there in April. In late June, Men's Health Acting Publisher Sean Flanagan departed for Ziff Davis Media's Yahoo! Internet Life.

At press time, the publisher's slot at Men's Health remained vacant.

At the same time, ad pages dropped 15.1% during the first half of 2000, according to Publishers Information Bureau statistics. Mr. Murphy countered, "We have seen a big upturn in our [ad] sales vs. plan--even in the last two months."

In June, Men's Health recorded a 9.4% uptick in ad pages vs. '99.

STAFFING TURMOIL

One former Rodale executive suggested staffing turmoil was largely to blame for recent missteps by Men's Health. Another said, "If you ran an ad, and the publisher leaves and the next publisher leaves and the next publisher leaves, you've got to start wondering what's going on there."

Asked to comment on such concerns, Mr. Murphy stressed the company's financial health and touted the company's new strategy. It was developed, he said, with longtime Rodale executives such as Publishing Directors Barb Newton and Ed Fones.

"It's easy to sit on the sidelines and be negative," Mr. Murphy said. "We're confident that our success will become better-known."

"They are a very smart company," said one executive familiar with Rodale. "But they need to shore up what they have first before they expand into areas they're not familiar with."

Copyright July 2000, Crain Communications Inc.

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