What was a rumor at the beginning of this month is now a done deal. Dickey Publishing, owned by Cumulus Media CEO Lew Dickey and his brothers, is acquiring high-end magazine publisher Modern Luxury Media.
Financial terms were not disclosed, and likely won’t ever be, since Dickey Publishing is private and not part of the publicly traded Cumulus. However, the rumor mill had said that the lenders who’d acquired Modern Luxury Media in a $120 million loan default were salvaging only around $20 million. The chain of 26 local/regional luxury lifestyle magazines sold for $243 million just three years ago.
But while Cumulus Media will not be the buyer, it will definitely be involved in the magazine venture. It will operate Modern Luxury through Cumulus’ Structured Management Services division. Many of the magazines operate in markets where Cumulus Media or Cumulus Media Partners (the large market privately owned radio group managed by Cumulus Media) have radio stations.
Modern Luxury bills itself as the country’s largest city magazine publisher, publishing 26 titles in 12 markets: New York, Los Angeles, Chicago, San Francisco, Dallas, Houston, Atlanta, Washington, DC, Miami, San Diego, Orange County and Hawaii.
Dickey Publishing has retained Macquarie Capital (USA) Inc. as sole advisor to the transaction. Macquarie also will provide debt and equity funding for the transaction.
“Modern Luxury has an excellent position in the most significant media markets in the U.S. We look forward to working with its talented team. We are also pleased to be partnering with Macquarie, who has significant experience in the media sector. Their advice and support in this transaction will be of significant benefit to the growth of the business,” said Dickey Publishing President and Publisher Michael Dickey.
His brother, Cumulus Media Chairman & CEO Lew Dickey, added, “Modern Luxury has a stable of venerable publishing brands in the nation’s most desirable media markets. It will benefit greatly from Cumulus’ technology platform, operating systems and local media sales experience. This is an excellent opportunity to gain significant scale in a business in which Dickey Publishing has been operating for over a decade.”
“There has been keen interest in Modern Luxury from several interested buyers. Dickey Publishing distinguished themselves in a number of respects, by placing the greatest value on Modern Luxury, our team, our brands, and each of our markets. We believe they will be a superb steward of the business going forward,” said Bill Cobert, CEO of Modern Luxury.
Berkery, Noyes & Co LLC represented Modern Luxury in the transaction.
Dickey Publishing, founded in 2000, already owns three city magazines in Atlanta including Jezebel Magazine, focused on “Atlanta Luxury Living”; Tuxedo Road, “Atlanta’s Magazine for Men”; and Atlanta Sports & Fitness, an online sports and fitness magazine for health-minded Atlantans. Dickey Publishing is wholly-owned by the Dickey family. Both it and Cumulus Media are headquartered in Atlanta.
RBR-TVBR observation: As beaten down as the magazine industry is (though for some segments not as badly as newspapers) the attraction for the Dickey family in this deal is the price. These are established titles and with some cost savings from having backroom operations handled by Cumulus, Dickey Publishing must have a plan in place for the luxury magazines to generate cash flow as the economy rebounds and the rich return to spending their riches.