Magazine Industry Takes Direct Hit

The better part of a lifetime ago, when I was a young editor at my college paper, the Michigan Daily, most of us said we would be pursuing journalism careers after we graduated. These included Dan Okrent, Walter Shapiro, Howard Kohn, Robin Wright and many, many others.

But, one fellow student, Bruce Wasserstein, chose a radically different path, as an investment banker and, eventually, LBO kingpin. I won't recite his resume, but suffice it to say that at the most recent reckoning, he was reportedly worth $2.3 billion.
Of course, that was as of last September, so he's probably worth a bit less by now. One reason is that at the other end of his career, he's returned to the world of journalism as an investor; he's the current owner of New York Magazine, for example, among other media properties.

Today's news, courtesy of Peter Kafka's blog, is that due to the rapid contraction of the mag's ad revenue over the past year of 6.3 percent, Wasserstein is telling all of his writers that they'll all have to take a pay cut.
Well, at least they still have jobs!

Meanwhile, the latest Publishers Information Bureau figures are out, and they document just what a disaster 2008 was for the magazine industry. Ad pages fell 11.7 percent industry-wide. Over 80 percent of the titles tracked by the PIB had fewer ad pages than in 2007, many by double-digit margins.
As expected here, the newsweeklies had a particularly horrible year: Time and Newsweek were down by 19 percent, U.S. News by a lethal 32.4 percent, and Business Week by 16.1 percent.

On the other hand, now their book values have fallen substantially, maybe they're available at a bargain? Could good old Bruce ride in and buy (i.e., save) some of them?

Don't be holding your breath for that to happen.