Oh dear. The PPA has announced its new CEO. A print man through and through apparently. At the same time the AOP starts to distance itself from the PPA. What use is this to business media companies. Why would UBM, who make a tiny proportion of their profit from magazine publishing be interested in continuing to fund the PPA? Why would RBI who are driven by the desire to grow its proportion of income earned online want to pay for this? Who in business media thinks the main purpose of its trade association should be to lead with propping up magazines. We wish the new CEO well, but with a consumer print editorial background he faces an uphill task to convince the business media world that this is good news.
Rory Brown who blogs regularly about the b2b space has already written about his concern. No doubt there will be a period of honeymoon but the demons that led to the demise of Jonathan Shepherd (runours of many members threatening to resign) will surely rear their head again. Lets look out for an early statement of intent from the new CEO and hope for the best
GMG are reported to be prepared in principle to inject more money into EMAP. EMAP is at real risk of breaching its banking covenants so although GMG are signalling their intent to stump up cash is for acquisitions, more cash may be needed to prop up the balance sheet and avoid an expensive renogotiation of banking agreements (which GMG are reported to have rejected as an option.) Elswhere there have been rumours that GMG will sell recently acquired PAid Content to raise cash. SO GMG has yet to make clear what ots own future strategy looks like and that means it is unlikely there will be any quick decisions about the future funding of EMAP. Potentially that is serious as in todays market delay in strategy clarity brings the day of reckoning closer. So there is a big difference between an "in principle" offer of cash and any cash being available. What EMAP has yet to demonstrate is that it has a compelling plan to build value in its business. It has and continues to take costs out. It has flip flopped on paid content strategy and there is little evidence that its current pay wall strategy is radical enough or innovative enough to crack the problem.
GMG are committed to paying down debt before taking any profits and will have to take a very long view. They have yet to right off their equity stake in EMAP (as APAX has already done) but they will surely have to.
Emap could consider selling off assets and hunkering around construction where they have a good data business and there may well be interestingfuture acquisition opportunities, and fashion, where they own WGSN and a selection of trade shows. This would make a manageable platform around which to build. Be brave, be brave.
RBI has told its emlpoyees in the USA that it is selling many of its controlled circulation titles and closing others. There will be job losses. I hear there were no bidders for the entire bundle of US assets that were identified for sale and most of the titles now being sold are either loss making or near to. RBI is keeping its Construction data business and Variety (both run by ex RBI UK managers).
A bloody and painful time. So what of the UK business? Nothing yet heard from new Reed Elsevier CEO but I would expect more pain there too as the full bite of the downturn grinds further into revenues