Time Inc., Wenner and Viacom eye bids for Vibe/Spin Ventures

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The sale of Vibe/Spin Ventures by Miller Publishing Group and Freeman Spogli & Co. has attracted four probable bidders: Time Inc., Wenner Media, Viacom and former Vibe/Spin president Keith Clinkscales.

Emap Petersen also was said to be looking at the music titles, although it is less clear if it would make a bid for the properties. Final bids are due in about four weeks.

Miller Publishing hired investment bank Salomon Smith Barney to manage a sale of Vibe/Spin Ventures, which includes urban music title Vibe, alternative rock book Spin and hip-hop title Blaze.

Salomon Smith Barney, industry executives said, hopes to fetch at least $200 million. But publishing executives and industry observers who have some familiarity with Vibe/Spin Ventures financials believe that's a steep price, and that the titles may sell for less than half that figure.

Vibe/Spin Ventures is said to have a pretax cash flow of approximately $15 million, according to one person familiar with the figures. The $200 million price tag is 13 times that number. Publishing properties typically sell on a multiple 10 to 12 times that of cash flow.

CASH FLOW SEEN DIFFERENTLY

To each buyer, the cash flow number can mean different things depending on what the bidder wants to do with the publications. Those who see a need to invest more in the properties may want to haggle over the purchase price. Those who think there's a potential for cost savings may be willing to pay more.

"That's always a seller's hope, that there is one buyer where there are special circumstances that means they can improve the bottom line and add a lot of value to their company," said Paul Hale, media analyst for Veronis, Suhler & Associates.

Still, three executives close to the negotiations believe the price that makes the most sense for the three titles is nearer $75 million.

Time Inc.'s Entertainment Weekly is behind that company's renewed interest in a title it sold in 1996 to Robert Miller, a former Time Inc. executive who founded Vibe with musician Quincy Jones. Since 1996, Time Inc. has decentralized its management so that each title is responsible for its own growth. Therefore, if Entertainment Weekly executives believe Vibe/Spin Ventures would enhance its group, it can pursue a deal.

An Entertainment Weekly spokeswoman declined comment.

Wenner Media is in the midst of a relaunch of its monthly entertainment magazine Us as a weekly. But that hasn't stopped the company from seriously contemplating a play for the Miller music titles. Wenner executives declined comment.

HIP HOP INTEREST

Wenner Media has been interested in the hip-hop market for some time and even made overtures last year to purchase The Source, a monthly owned by entrepreneur David Mays. However, the asking price was too high, and the deal never happened.

Viacom, owner of cable channels MTV and VH1, most likely would use the publishing group to extend its reach as a provider of music information. A Viacom spokesman also declined comment.

Emap Petersen, which owns several music titles in the U.K., including Smash Hits, would like to be a player in that segment in the U.S. as well.

Mr. Clinkscales left Vibe/Spin Ventures in May to start his own media company, Vangarde Media.

"I'm still very serious and very interested in acquiring Vibe/Spin," Mr. Clinkscales said, adding that he has already met with a "host of financing" partners that would allow him to make a competitive bid.

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