Among the bidders for the Weider titles, according to persons familiar with the process, are American Media; Aurelian Communications, the new company owned by former Primedia CEO William Reilly; Veronis Suhler Stevenson; and two private equity-backed bids from former magazine executives Neal Vitale and Jason Klein. All declined to comment or could not be reached by press time.
The most intriguing non-starter bid, which executives familiar with the matter said dropped out just before last week's due date, was headed by Wenner Media, in which the publisher of Rolling Stone and Us Weekly teamed up with New York-based private equity player Quadrangle Group. Kent Brownridge, Wenner Media's general manager, said his "confidentiality agreement" prevented him from commenting on his company's potential Weider bid.
Executives who have seen financial data said Weider projects cash flow of around $27 million for 2002 on revenues of about $135 million. Bids were believed to be in the $300 million to $350 million range.
However, crunch time for the deal hit its crescendo just as the Federal Trade Commission began to examine whether magazine publishers should be responsible for monitoring ads with questionable diet claim ads. (See related story, p. 8.)
What effect this could have on the bidding process for Weider's titles-which range from women-targeted Shape and Fit Pregnancy to hardcore men's bodybuilding title Flex-remains uncertain. Magazine executives are split as to how serious a threat the FTC's moves represent. Calls to Weider and to the Rothschild Group, which is handling the sale, were not returned by deadline. It is unclear when the sale will conclude.
But serious dollars could be at stake for Weider should this segment come under fire. According to Taylor Nelson Sofres' CMR, weight loss and weight gain aids ad spending in the four measured Weider titles totaled $3.1 million through October, and nutritional supplements spending totaled $42.6 million. This tally does not include data for Flex, the ad mix of which is heavily weighted toward these categories.
One individual familiar with the bidding process expressed concern when the FTC publicized this issue. "The timing couldn't be worse," this person said. "The capital markets are already pretty jittery, and this introduces a whole new element of risk into the process." When asked if this could affect the sale process, this individual quickly replied, "Of course." Some executives dismiss these concerns, but issues with diet-related ads were a factor in Time Inc.'s decision not pursue the Weider portfolio.