For years Cumulus Media CEO Lew Dickey has been railing against the inefficiencies of print advertising as an opportunity for radio stations. Of course, he was talking about newspaper print advertising. He’s actually an investor in another type of print advertising: magazines.
With little fanfare Lew and his three brothers created Dickey Publishing and acquired Jezebel magazine in January 2003. Jezebel describes itself as “Atlanta’s prominent lifestyle magazine for sophisticated, affluent and professional consumers.” A few months later they acquired two other local magazines: Atlanta Sports & fitness Magazine and Georgia Athlete. And along the way Dickey Publishing created Tuxedo Road as a male counterpart to Jezebel.
Business is apparently good, since the New York Post reports that Dickey Publishing is in negotiations to buy Modern Luxury, a chain of magazines aimed at affluent consumers in 13 markets – in many cases markets where Cumulus Media or Cumulus Media Partners has radio stations which might be tapped for cross-promotional opportunities.
In addition to yet another Atlanta title, the deal, if it comes to pass, would give Dickey Publishing magazines in Chicago, Dallas, Hawaii, Houston, Los Angeles, Manhattan, Miami, Orange County (CA), San Diego, San Francisco and Washington, DC. (Yes, that’s only 12 markets, but Modern Luxury insists that it has 13 city and regional magazines.) There are also bridal publications in several of those markets and some other titles as well.
The attraction for Dickey Publishing is the price. The Modern Luxury group was bought three years ago for $243 million, just before the nation plunged into recession. Even the rich were hit in their wallets, so the luxury publishing biz fell on hard times. The owner defaulted on $120 million of debt and the Post story says lenders, including GE Capital and New Star financial, are now running the show. They want to unload the group and the asking price is said to be less than 10% of the previous sale price – somewhere around $20 million.
Lew Dickey, who is CEO of Dickey Publishing as well as Cumulus, declined to comment when contacted by RBR-TVBR.
RBR-TVBR observation: As we’ve noted recently, certain niche segments of the magazine industry have weathered the recession much better than newspapers (or national news magazines, such as just sold Newsweek). Meredith, in particular, held up very well with its portfolio of women’s titles. The luxury mag business apparently had some tough sledding, but it looks like Lew is doing some bottom feeding which might work out very well.