Stop the presses

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The magazine shakeout of 2001 accelerated last week as the Industry Standard and Working Woman ceased publication.

Both technically went on hiatus. An asset resurrection is possible for both titles, and the Standard may yet be sold.

Working Woman, as part of the Working Woman Network with sibling title Working Mother, had been unsuccessfully shopped since May by bankers DeSilva & Phillips.

The Standard, owned by Standard Media International, was never officially on the block, but industry executives report having been approached.

The entire staff of Working Woman was laid off. The Standard today lays off nearly all of its 180 employees; around 15 to 20 will remain to serve as a skeleton staff for its Web site.

The Standard's shutdown was reported first on AdAge.com.

This spring, the Standard was seeking buyers at more than $100 million, said one executive who'd reviewed it for a possible purchase.

When Working Woman Network hit the market in May, it had sought an asking price of about $10 million. But no buyer materialized, leading its major lender, Arlington-based MCG Capital, to foreclose on the assets.

MCG installed equity partner Carol Evans as its new CEO-president of a new company, Working Mother Media. Working Mother, with about 835,000 paid circulation, will continue to publish and be the basis for the new venture.

Standard Media International may file for Chapter 11 bankruptcy as early as this week. Working Woman Network, with no assets and significant debt, will seek a Chapter 7 bankruptcy.

If history is a guide, the nation's newsstands' painful shakeout could well continue. The last economic recession, in the early `90s, claimed scores of magazines, including highly regarded titles such as 7 Days, Connoisseur, Egg, Manhattan, inc., Men's Life, and New England Monthly.

"It's astoundingly like 10 years ago," said Mark Edmiston, managing director of AdMedia Partners, New York-with one key caveat. Mr. Edmiston cited a historical analysis of magazine ad data that found the `90-'91 media recession represented the worst ad fall-off in history-until now. "This one is worse," he said, "because the dropoff is more dramatic."

Vulnerable to further market weakness, Mr. Edmiston said, are independent publishers-like Working Woman Network-and trailing titles in key categories.

In recent months, Reader's Digest Association shuttered Walking; Individual Investor Group folded Individual Investor; Ziff Davis Media closed Family PC; and Imagine Media's Business 2.0 was sold to Time Inc., which folded it into its own Ecompany Now but kept the Business 2.0 name.

The 200,000-circulation Stan-dard, meanwhile, is destined to become Exhibit A in the rise and fall of the dot-com nation. It foundered in a toxic sea of boardroom squabbles, rapid expansion, and even more rapid contraction. Last year the magazine posted the most ad pages of any magazine-7,440, trouncing its nearest runner-up, Fortune, by more than 1,000 pages.

"If we'd had a mild downturn, we wouldn't be having this conversation," said an exhausted and dejected-sounding John Battelle, founder and chairman of Standard Media International.

Insiders talk of cultural clashes between Standard Media's dot-commy culture and majority owner and trade publisher International Data Group-which culminated in the title running out of money before financing plans could be approved. The Standard was on track to lose $50 million this year, according to an executive familiar with the company. This follows a year in which profit was $15 million on revenue of approximately $115 million.

Working Woman Network, too, owes its downfall to Net mania. In late `99, the company raised more than $20 million to grow its online presence, with an eye toward the inevitable initial public offering. Almost immediately, said outgoing chairman-CEO Jay MacDonald, the company was whipsawed by the Nasdaq crash of March 2000 and the drying up of capital markets. "The real killer," Mr. MacDonald said, was the abrupt decline in advertising beginning last December: "There were no skid marks on the cliff."

Ms. Evans ruled out a sale for the 636,297-circulation Working Woman, seeing value in its brand for the company's conference business and National Association for Female Executives.

The asset-sale nature of the Working Mother Media deal means the new company can choose which employees to hire. An executive familiar with the situation said only about 40% of Working Woman Network staffers would survive the transition.

While it's technically possible either title may be resurrected, some media buyers said magazines that come back from the dead face troubles on the ad front.

"A magazine being sold doesn't bother me," said John Frierson, president of media-buying agency Frierson, Mee & Partners, New York, "because the consumers aren't aware of that. When a magazine goes dark, they lose consumers."

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