Don't Expect a Rush to Sell 'New York Magazine'

Sale Seems Unlikely, and Even Then Only if the Market Improves

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NEW YORK ( -- When New York editor in chief Adam Moss addressed staff on yesterday after learning owner Bruce Wasserstein had died, he said it was impossible to know what would happen next. That's true, but a few expectations seem reasonable.

The immediate impact on day-to-day operations should be minimal. Even before Mr. Wasserstein's death, New York Media CEO Anup Bagaria was the owner's primary contact with staff. So you can expect continuity.

The near-term prospects for a sale, moreover, are small. New York Media belongs to Wasserstein family trusts -- and Mr. Wasserstein's family is wealthy. New York magazine is losing money, but nothing like, say, BusinessWeek. There's no apparent pressure to sell soon.

And if the family does decide it wants to sell, presumably at a gain, moving too quickly could be counterproductive -- not just because today's weak economy would undercut bids. "I don't think it would be a good way to maximize the return on the investment they made in New York, because it's still kind of a work in progress," said Reed Phillips, managing partner at DeSilva & Phillips, an investment bank specializing in the media business.

Mr. Wasserstein's coalition paid $55 million plus the assumption of liabilities for New York less than six years ago, then invested much more money along the way. The family would probably want a minimum of $75 million to $100 million if it sold, Mr. Phillips estimated.

"They've done some great work and they've got a vibrant internet business there, but I don't think they've accomplished all of what they set out to do yet," he added. New York Media has recently started reaching beyond New York City, for example, adding its Grub Street blog coverage to five other cities. Earlier this month New York Media made its first international foray when, which it acquired last year, added listings in London and Paris. New York Media employs approximately 200 people.

Like most magazines, New York has struggled by some important measures this year. New York reported average paid circulation of 427,770 over the first half of this year, down 1.3% from the first half of 2008 as paid and verified circulation slipped 0.6% and newsstand fell 13.5%, according to the Audit Bureau of Circulations. Newsstand sales across Audit Bureau members, by comparison, fell an average of 12.4%. Ad pages through the Oct. 6 issue fell 34.6% from their level in the equivalent period last year, compared with a 22.7% decline across weeklies as a whole, according to the Media Industry Newsletter.

Visitors to its website, on the other hand, have continued to grow. Unique visitors numbered nearly 1.7 million in September, nearly 11% above September 2008, according to Compete.

Changes in the media business, however, complicate any predictions tremendously, said Michael Wolff, the founder whose own coalition of bidders for New York lost to Mr. Wasserstein in 2003. "I remain incredibly fond of New York," he said. "What Wasserstein and company have done there has been admirable in many ways. But it doesn't answer the question with what one should do in the magazine business or with this magazine."

"If your interest is not to lose money and you see the magazine business getting worse rather than better, as many people do, I don't know," he added.

The overriding hope among fans of the magazine, no matter what, is for more ownership in Mr. Wasserstein's mold.

"What would worry me enormously, if there is a next owner, is if the next owner took the position that the measure of New York's success was purely in dollars and cents," said Evan Smith, the former editor of Texas Monthly and a friend of Mr. Moss. "Had New York been purchased years ago by someone who judged it in that way, the New York that's been so successful would not have existed."

"I'm hoping that whether it remains with Wasserstein's trust or whether it's sold," he added, "it ends up in the hands of people who view it as Bruce did."

As Caroline Miller, the editor that Mr. Wasserstein displaced when he hired Mr. Moss, noted earlier to Ad Age, "Bruce was perfect for New York magazine. ... It was a magazine that needed an owner with deep pockets, who had a serious commitment to making it prestigious and smart as possible. And he put a lot of money into it. ... This is a really terrible time for the magazine to lose him, because of the really tragic recession."

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