Wednesday, May 16, 2007

World's Classiest Mag Facing Failure

"Experience taught me a few things. One is to listen to your gut, no matter how good something sounds on paper. The second is that you're generally better off sticking with what you know. And the third is that sometimes your best investments are the ones you don't make."
Donald Trump

World's Classiest Mag Facing Failure -classiest-mag-facing-bankruptcy.php Donald Trump is turning out to be about as successful in the magazine business as he was in casinos-in other words, not very.

Trump, the quarterly lifestyle magazine he publishes through a licensing arrangement, is on the verge of financial meltdown, according to sources. "They owe money to everybody and are being sued every which way," says one insider. Another source claims the title will likely go on hiatus unless Trump or some other backer comes to the rescue with additional financing. "Will Donald come in and help reinvigorate it with some personal funds? It's all a matter of timing," adds the source.

Trump has been around since 2004, when it was launched as Trump World. Last year, Premiere Publishing Group, which has a five-year licensing deal with Donald Trump, went public. Since then, its staff has dwindled from around 25 to fewer than 10. Among the refugees is editorial director Aaron Sigmond, who left in March. Sigmond says he and Premiere CEO Michael Jacobson "are longtime friends and remain so. I wish him and his company the very best."

Jacobson did not respond to a call for comment; nor did Trump. Each holds a 14.6 percent stake in Premiere, which had incurred net losses of $5.6 million as of the end of last year, according to a filing with the Securities and Exchange Commission. Under the terms of his contract, Trump is also supposed to receive a $135,000 royalty payment for each issue of Trump that gets published. Considering how much of his income seems to come from cheesy licensing deals these days, we're sure he's anxious to keep getting those checks.


Burkle Eyeing American Media?

Stephanie D. Smith

Though billionaire Ron Burkle may have satisfied his temporary yearning for media expansion with his recent acquisition of Primedia's Enthusiast titles, he could still have his eye on another one, according to several media analysts. On Monday, Source Interlink Cos., which Burkle controls as a part of his investment firm Yucaipa Cos., said it would acquire Primedia's Enthusiast Media division, a collection of 70 titles including Motor Trend, Hot Rod and Surfer, for $1.2 billion. But the New York Post reported May 3 that Yucaipa Cos. also has its eye on the debt-ridden American Media Inc., home of Star, Shape and Men's Fitness.

Analysts believe there could be incentives to merging AMI's assets with Yucapia's media holdings, which are said to include culture bimonthly start-up - for the third time - Radar.

For one, AMI's Distribution Services Inc. is one of the largest magazine distribution companies and would fit well with Source Interlink, a distributor of magazines, electronics and DVDs. Many of AMI's other assets are challenged - Star, for example - and the company is saddled with more than $1 billion in debt. But analysts say now that Primedia's assets are a part of Source, AMI would become a smaller part of the portfolio, lessening AMI's financial impact on Source's overall bottom line.

Moreover, analysts said Burkle would have access to AMI chief executive officer David Pecker to help manage both AMI's businesses and Primedia's 70 Enthusiast titles. Though Pecker has hit plenty of rough spots running AMI, he is a well-seasoned magazine executive. "David is a great asset," said BMO Capital Market's Andy Buchholtz. "He has a lot of experience in the auto category with Hachette Filipacchi Media," of which Pecker was ceo from 1992 to 1999. As of now, Steve Parr is president of Primedia's Enthusiast Group, reporting to Source chairman Michael Duckworth.

A spokesman at Source Interlink said, "We do not comment on speculation or rumor." A spokesman for AMI did not return an e-mail request by press time.

Meanwhile, analysts are keeping their eyes on another publishing deal in the works: the sale of Dennis Publishing. Final bids are said to be due May 23. -

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