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Tuesday, July 07, 2009

Bubble Bubble Toil and Trouble

We have known for a long time that business media companies are in trouble. But it is only just now that the chickens are coming home to roost. The failed sale of RBI will be seen as a watershed moment, after which the reality of the horrors we face began to be faced up to.

Investors in Emap have written down the value of their investment. Investors in Incisive (which overlap) are coming to terms with the news that their equity is all but worthless and the banks will end up owning the business.

William Reed has culled at at least 20% of its headcount. Centaur has been doing the same as it struggles on with reduced profits and little cash (but luckily for them little debt) Most other business media companies are reducing their headcount progressively, chasing the revenue downwards and hoping that things will get better.

Every week sees more magazine closures. There is no end in sight to the ad gloom. Recruitment has gone for ever and display is mortally wounded.

The hope in online is often countered by the grim reality of poor ad revenues there too. Emap announced last week that it is putting much of its content behind a subs wall, having discovered that giving it all away is hurting paid copy sales and the extra ad revenue doesn't cover the gap. This flip flop in strategy won't work not least until they stop worrying about print cannibalisation

Everywhere we look the strategies are defensive. Where is the new model? Where is the creativity that will turn the old magazine publishing businesses into growth businesses for the future? Yes there are pockets of interesting things happening in all the business media enterprises, but none of them have a whole business vision.

Meanwhile in idle tittle tattle I hear a rumour that Les Kelly, the Wilmington exec who presided over the closure then sale of Press Gazette is leaving the business.

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At 5:24 pm, Anonymous Anonymous said...

Debt is the key to everything in this market. Shareholders just have to grin and bear it but interest payments have to be met regardless.

To quote the scene in Goodfellas "F***k you, pay me"

Never have PLCs looked so good


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