SOURCE: VANITY FAIR
“They Don’t Have Infinite Patience”: New York Magazine, An Up-To-The-Minute Anachronism, Is Now Up For Sale
The original city magazine has managed to preserve and augment its DNA across multiple media eras. But the current climate may be the most challenging yet.
To a certain sort of media person, the “for sale” sign now hanging on New York magazine’s door is yet another indication, if more were needed, that an era is ending. The magazine-world landscape has changed so much, and so fast, that it is almost unrecognizable from the way it looked just a decade ago. In the past few months alone, three titans of the industry—Time, Fortune, and Sports Illustrated (which Meredith Corporation acquired in January through its conquest of Time Inc., amazingly now defunct)—have been trying to lock down buyers. Rolling Stone was reimagined and relaunched as an upmarket monthly with a focus on live events, under the direction not of its legendary founder, Jann Wenner, but of new majority owner Penske Media Corporation. Condé Nast, the parent company of Vanity Fair, announced it would be putting three titles on the block—W, Brides, and Golf Digest—as it embarks on a five-year turnaround plan in which video will be one of the top priorities.
New York Media looked like a sturdy ship on this churning sea, still independent, managing to adjust to the changing climate, going biweekly while launching a whole new family of Web sites without completely remodeling its identity. But that was before last week’s revelation, in an August 14 Wall Street Journal article, that New York Media “is exploring options including a possible sale.” The whispers have actually been swirling for months, giving some industry insiders the impression that the company—as a whole or in parts—has been on the market for some time, at least unofficially. As the Financial Times first reported, in a follow-up to the Journal’s scoop, New York Media has been working with LionTree, the boutique investment bank founded by dealmaker Aryeh Bourkoff (who didn’t have a comment for this article). “We are focused on building our business organically, but we also explore investment interest and strategic opportunities as a general practice,” the company said in a statement last week. “Given the growth New York Media has seen, it makes sense for us to evaluate the market for opportunities to continue to develop the business.”
New York has been owned by the Wasserstein family since 2004, when the legendary dealmaker Bruce Wasserstein (who died in 2009) stealthily swooped in to snatch it away from a consortium that included Mort Zuckerman, Harvey Weinstein, Jeffrey Epstein, and Donny Deutsch, among several other name-brand machers, for $55 million. Bourkoff first became acquainted with the family in 2014, when he brokered Madison Square Garden’s acquisition of a 50-percent stake in Tribeca Enterprises, which includes the Tribeca Film Festival. Bruce’s daughter Pam Wasserstein, who was named C.E.O. of New York Media in 2016, was a Tribeca executive at the time of the M.S.G. deal. Over the past year or so, amid a wave of robust M&A activity for media companies big and small, Wasserstein has been getting feelers from interested parties, and LionTree’s team has been helping her to assess those queries. Over the past few months in particular, according to someone involved in the process, there have been discussions about a range of different strategic options, and New York Media is “in conversations with a few parties,” though none of those are at an advanced stage.
In response to the Journal article, Wasserstein sent an e-mail to employees. “It’s fairly standard that everyone talks to everyone in media, but I’ve stepped up participation a bit this year in order to be opportunistic about what path we take to build,” she wrote. “Partnering to support acquisitions or other ways of growing might make sense. Or it might not. The point is that I’m trying to make our company the best version of itself, as I know all of you are.”
The “for sale” sign, while a shock, was not exactly a surprise. The realities of modern print media hit home for New York in 2014, when the magazine switched to a twice-a-month schedule after five decades of publishing weekly. New York Media’s digital assets have continued to expand their footprint and audience, but not enough to inoculate the company from the punishing economics of advertising in a Facebook-centric world. In private conversations, Wasserstein has talked about the challenge of competing with venture-funded digital darlings like BuzzFeed that are in the game of astronomical scale. During an all-hands gathering at City Winery on July 25, a New York Media executive gave a presentation showing that the company had fallen significantly short of its advertising-revenue targets for the first half of the year, according to people familiar with the meeting. (A company source noted that New York Media sets aggressive revenue targets.) Some staffers came away with a sense of foreboding. “The clear implication,” one told me, “is that they don’t have infinite patience for funding losses indefinitely.”
But the staff, with substantial unanimity, believes that the Wassersteins have been committed, beneficent owners, so there’s confidence that whatever path they choose will be in the company’s best interest. “It seems like people should take Pam at her word, that she wants to find a resolution that isn’t a retreat,” the staffer said.
What makes New York an interesting target, whether for a sale or a partnership or some sort of strategic investment, is that it has always been a particularly sui generis creature in the realm of general-interest glossies. Founded in 1968 by Clay Felker and Milton Glaser as a Sunday supplement to The New York Herald Tribune, then spun off independently, the magazine first came on the scene as an irreverent challenge to The New Yorker and an outlet for New Journalism. It also seemed to sing into being a whole menagerie of creatures of the new city, yuppies and hipsters and foodies and it-girls, and so on, helping define the urban lifestyle regimes that are still in force today.
Over the past 15 years, under the ownership of the Wassersteins and the editorship of Adam Moss, New York has been one of the few print publications to beam its essence onto the Web with a passel of premium brands. It of course doesn’t hurt that New York has racked up enough National Magazine Awards to fill a modest downtown studio apartment.
New York is also unique given its standing as an intensely local brand with outsize national clout, punching above its weight as a thought leader and in national politics. It’s a boutique product with old-school visual and literary values, made for a sophisticated audience, which is also what lends a bit of nuance to the deal potential. “The interesting conundrum about New York,” a veteran magazine-industry figure told me, “is that it has a cachet among editors, and among a deteriorating media class in New York, but it doesn’t have that sort of swaggering, master-of-the-universe appeal that even buying, say, Fortune would have for someone.”
If New York Media did end up moving in a sale direction, it’s unclear whether prospective buyers would be more inclined to acquire the whole shebang, which is a rollup of six distinct brands, or to make a play for individual pieces of the portfolio. In particular, Vulture and the Cut—covering entertainment and fashion/women’s issues, respectively—have distinguished themselves as influential standalone publications that are rich in national advertising potential, unencumbered as they are by the geographic specificity of the mothership. Many view the Cut, especially, as New York Media’s runaway digital success story, and it is said to have attracted interest within the past year, including from a suitor described to me as “a well-known Los Angeles billionaire’s investment arm.” (New York Media declined to comment.)
If a partnership were the more logical outcome, there are two such recent arrangements that sources pointed to as a model: Jay Penske’s majority stake in Rolling Stone and Laurene Powell Jobs’s majority stake in The Atlantic. “There aren’t enough Laurene Powell Jobs out there,” said a media executive who knows Wasserstein and thinks a partnership would work well for New York. Jobs, who has invested in an array of media properties via her Emerson Collective, is the philanthropist that all struggling journalism outlets dream of getting a check from these days, while Penske has earned a reputation as the industry’s media shopper du jour. An infusion of cash would theoretically position New York Media to make acquisitions of its own, as the company did earlier this year when it bought the comedy-focused Web site Splitsider to bulk up Vulture’s pop-culture coverage. It would also create budget for hiring more journalists. New York Media could get bigger—without getting too big—and thereby become a more competitive player in the marketplace.
In a recent New York Post column, Keith Kelly floated two “tire kickers” about whom staffers would surely be less enthusiastic: David Pecker, the embattled National Enquirer owner (who was outbid the last time around), and John Catsimatidis, the supermarket magnate and political mega-donor, who told Kelly, “I’ll at least look at it. After we look at the numbers, I’ll make a decision.” While both of those options seem wildly unlikely, it is entirely plausible that there could be any number of other rich people interested in taking a peek under the hood. With so many print-media companies grappling with their own difficulties, billionaires with patience are now the pie in the sky. Reed Phillips, a veteran media banker who knows the magazine space well, believes New York Media wouldn’t have trouble finding a buyer or investor if it needed one, and he told me there’s a good chance some wealthy individual or other would be happy to add it to their mantelpiece. As Phillips put it: “This is truly a trophy property.”