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June 18, 2019

Publishing News

New Owner Licenses Out Sports Illustrated's Operations
NY Post: "Authentic Brands Group — a licensing firm headed by Jamie Salter that acquired the [Sports Illustrated brand] last month from Meredith Corp. for $110M — has turned around and licensed SI’s print and digital publishing rights to The Maven, a small publicly traded startup. Under the original sale agreement announced May 27, Meredith was going to continue publishing the print and digital media under a two-year licensing deal. Sources said the deal required Meredith to pay between $10M and $15M a year to ABG for the publishing rights. Under terms of the latest deal, revealed in an SEC filing on Monday, The Maven has prepaid $45M to ABG against future royalties under a 10-year licensing agreement with guaranteed yearly minimum royalty payments. “Meredith only had a short-term license deal,” ABG CEO Jamie Salter told The Post. “Now, we have a long-term partner.” The license includes rights to the print version of SI—which appears every other week—as well as the annual SI Swimsuit issue and SI for Kids and the related digital properties. Ross Levinsohn, most recently CEO of Tribune Interactive, a part of Tribune Publishing that owns the Chicago Tribune and the NY Daily News, will be joining The Maven as the CEO of the SI media line. Headed by digital entrepreneur Jim Heckman, The Maven... only last week purchased Jim Cramer’s financial news site The Street for $16.5M. Last month, The Maven had been backing retired NBA star Junior Bridgeman’s bid to buy SI, but lost out...when Bridgeman himself could not produce his portion of the financing to close the deal, sources said. ABG swooped in at the eleventh hour to land the deal instead. Levinsohn and Heckman had partnered on media ventures in the past, including at Yahoo, where Levinsohn was acting CEO and Heckman was SVP in charge of media strategy, and at Fox Interactive, where Levinsohn was president. [At the time, Fox was part of News Corp...] In a statement, Meredith said the deal will allow it to “devote full resources and management attention to maximizing the profitability of the rest of its portfolio of leading media brands,” which include People, Entertainment Weekly, Food + Wine and Travel + Leisure and Martha Stewart Living. Maven and ABG are pursuing discussions with Meredith for it to continue to operate certain aspects of the business, including print operations. However, Monday’s deal is not contingent on reaching such an agreement with Meredith, according to the SEC filing. Under the deal, ABG also gets stock warrants in the fledgling Maven company. Meredith appears to be sanguine about losing the publishing rights and said it only hung onto the publishing operation initially to speed along the much-delayed selloff process. “As a result of ABG’s decision to license the Sports Illustrated media assets to a third party — which was ABG’s right under the contract — Meredith’s goal of a completed transaction is achieved.” Still, Meredith is not entirely clear of SI. It's still shopping the blog site Fansided, which was added to SI when it still part of Time Inc. but which was left out of the May 27 deal between ABG and Meredith."

Hearst Mags' Young Sums Up Today's Business Musts, Challenges
Digiday: "Despite the ever-changing methods of delivering content, Hearst, first and foremost, remains a magazine company. “Magazine media is being redefined,” said Troy Young, president of Hearst magazines on the Cannes edition of the Digiday Podcast. “It’s obviously hard because the product before was so understandable –both the ad product and the physical product. Today it looks very different. We don’t just make text. We make everything and distribute it across 10 different endpoints. But underneath it, what magazine media is, which is somewhere between news and entertainment, is vital.” Excerpts from a Digiday podcast with Young: "“Today, we’re going through a very significant culture change. The game of the business is scale, quantifiable relationships with consumers and a mixed media delivery of content. The biggest challenge is to execute. It’s not hard to figure out where you have to go. You have to have strong IP, brilliant understanding of distribution an extraordinary monetization muscle and have a real technical and data competency -- but the path is hard... Data is changing the structure of an organization. The more that you push data into an organization, the more you quantify the input and output [and] the more the organization is affected in self-organizing. I’m building data into our communication system. That’s how you get notified when there’s a follow-up required on an account that comes via Salesforce comes through Slack or how many followers we have on Instagram also comes through Slack. Dashboards are not embraced by most people. My goal is to have data flowing through the company... When I break down the portfolio, some of them naturally fit a modern digital membership proposition. In the area of women’s service, there’s a lot of opportunities around commerce. In health, we’re launching VOD in July. In the fashion space, it’s harder to think [about] how you build a paid subscriber because there’s too many substitutes to the content. Vogue tried to go after the Business of Fashion, Women Wear Daily territory, which is logical. In that space, you have to mean more to people who buy your media."

Layoffs Hit Out Magazine
WWD: "Pride Month should be a time of celebratory windfall for one of the only LGTBQ publications in the country, but for Out magazine, it’s a time of continued uncertainty. The magazine’s parent, Pride Media, on Friday enacted another round of layoffs to the already small staff, WWD has learned. Five employees have been cut, including a longtime sales executive who’d been with the company for 20 years and led sales across the organization, including for Out and The Advocate. The others are thought to be in editorial at Out, which employs almost exclusively people within the LGTBQ community. This is the second round of layoffs to hit the magazine this year, with the first in February also claiming five positions and including a pay cut of 8% for all remaining staffers. Remaining staff is thought to be less than 20 at an outlet that publishes a print magazine 10 times a year and has a daily presence online. A representative of Pride could not be reached for comment. As for editor in chief Phillip Picardi, who Pride’s recently departed chief executive officer Nathan Coyle lured from Teen Vogue, he’s said to be hanging on, at least through Pride Month"...

S&S to Publish Former Hearst CEO Bennack's Memoir
NY Post: Simon & Schuster will this fall publish “Leave Something on the Table: And Other Surprising Lessons for Success in Business and in Life,” a memoir by longtime Hearst CEO Frank Bennack, currently executive chairman. For most of his career, Bennack was a behind-the-scenes power player who shunned the limelight. Accomplishments include taking some of the profits from Cosmopolitan in 1990, when it was one of the most profitable magazines in the country led by Helen Gurley Brown, and using it to buy a 20% stake in ESPN for $167M. Even in the era of cord-cutting, ESPN, which is 80% owned by Walt Disney, is valued at around $30B. In the magazine world, he okayed the launch of Oprah Winfrey’s magazine and engineered a $1B takeover of the publisher that brought Elle and Car & Driver into the fold. He also pushed the company beyond its newspaper and magazine roots and into joint venture cable holdings such as Lifetime and the A&E Network in a partnership with ABC. More recently, he pushed beyond media entirely and purchased hugely profitable financial services company Fitch"...

Q1 Adult Trade, Kids' and Trade Paperback Sales Up
PW: Adult trade book sales rose 2.4% in Q1 vs. Q1 2018, and children/young adult category sales rose 9.7%, according to AAP's StatShot. The downloadable audio segment continued to be the primary driver in the adult trade segment, with sales up 35.5%. Digital audio accounted for 11.4% of all adult book sales in the quarter, up from 8.6% in the first period of 2018. In contrast, e-book sales fell 5%. While ebook sales are still considerably higher than digital audio sales, the gap is closing. Ebooks represented 21.1% of adult trade sales in Q1, vs. 22.8% a year ago. Trade paperback sales rose 5.1%, but mass market paperback sales tumbled 22.7%. Hardcover sales fell 1%... For the 1,372 publishers who report their revenue to the AAP, total first quarter sales were up 6.7%

Reader's Digest Spars With 89-Year-Old Contributor Over $100 Payment
The Arizona Republic's AZ Central site reports that, after Reader's Digest failed to pay her a promised $100 for a story she submitted and was published by the magazine, 89-yer-old Gloria Arroyo "reached out to Call for Action, a team of about 20 trained volunteers that partners with The Arizona Republic and to help readers who have been caught in a scam, ripped off by a business or faced other problems get their money back. (It's part of [AR's] #HeretoHelpAZ campaign.) "I did not want them to take advantage of me," Arroyo said. "I don't care if it's $100 or a penny because if I am right I am going to fight." Arroyo was paired with a volunteer and together, they worked for months to communicate with Reader's Digest about Arroyo's compensation... "First they told me I wouldn't be compensated because my story was printed as a miracle story, then because it was a special edition, then a holiday edition," Arroyo said. "They couldn't get their story straight"... At one point, they sent her a box full of cookbooks, a ball cap and bookmarks, but not her $100 check... "Reader's Digest is a big company — they print in more than 20 languages — and they were trying to scam me out of $100."Eventually, Call for Action coached Arroyo how to reach out to the magazine's president. Arroyo got a message from RD to say they would send her $100 soon after. When she got the check in April, it was labeled a "courtesy fee." Becky Wisdom, a spokeswoman for RD, maintained that RD "received and subsequently published Gloria Arroyo’s submission" under terms for a "Miracle Story"... "We consider Ms. Arroyo a valued reader and contributor and were pleased to extend her a courtesy payment," Wisdom added. Arroyo canceled her subscription to the magazine after decades of loyal readership"...

BuzzFeed CEO Unmoved by Unionization Walkout
WWD: "BuzzFeed’s staff union effort seems to be in a deadlock with executives.Staffers in the news division, who went public with their union effort about four months ago, staged a four-hour walkout [yesterday] in an effort to force BuzzFeed CEO Jonah Peretti to voluntarily recognize the unit and its demands. a memo to staff, Peretti said union leaders, represented by NewsGuild of New York, are declining to accept a bargaining contract that is “both responsive to our employees’ requests, and mindful of the way the company operates. Our offer is a good one and it remains on the table today,” Peretti wrote. A company spokesman added that BuzzFeed leadership has no intention of backing down on the two issues that are at the core of the union’s rejection. On the flip side, the company is ready to recognize today its proposal, put on the table June 4, and there is a sense that the whole process has taken longer than anyone on either side expected. Peretti said in his note that the proposal is “the product of more than three months of discussions and negotiations with the NewsGuild” and said BuzzFeed’s staff is now “seeking to impose additional demands that threaten our progress around voluntary recognition.” Staff union leadership is rejecting the contract proposal on two points. The first regards which workers are included in the official bargaining unit, an issue from early on in contract negotiations and a relatively common area of disagreement in union bargaining contracts. BuzzFeed is proposing that certain job titles be listed in the contract as excluded from the unit, while the union, represented by NewsGuild, is pushing for no hard and fast exclusions. The second issue is over the matter of BuzzFeed hiring between now and when a collective bargaining contract is formally ratified, which could be several more weeks. Union leaders are said to be pushing for a hiring freeze, while BuzzFeed is pushing to continue hiring as it wishes, up and until a CBA is ratified... Peretti claims the union is pushing for oversight control of any individual employment contracts in the interim period, something he said is “not acceptable for us as a business or as a world-class news organization""...


Retail News

Stop & Shop Names New President
SN: "Ahold Delhaize USA has named Gordon Reid as president of its Stop & Shop supermarket chain, taking the role vacated by Mark McGowan, who is leaving the company. Announcing the change late Monday, Ahold Delhaize said Reid, currently president of Landover, Md.-based Giant Food, will start transitioning to his new role in the coming weeks and take the reins at Stop & Shop in late July. Plans call for McGowan to remain with Stop & Shop through the end of the year to help with the leadership transition at the Quincy, Mass.-based chain, which operates about 410 stores in the Northeast.Ira Kress, SVP of operations for Giant Food, has been named interim president of the grocery chain. He is slated to begin in the role in late July... Reid has been president of Giant Food since joining the 165-store, Washington, D.C.-area chain in late 2013. He had more than 35 years of international retail experience, including various management roles at Tesco, Boots, A.S. Watson Group and The Dairy Farm Group"...

Elliott Is B&N's Owner-in-Waiting, After Readlink Backs Off
PW: "After Elliott Advisors made a $6.50-per-share bid on June 7 to buy Barnes & Noble, other prospective buyers had until 11:59 p.m. on June 13 to put forward alternative offers. Reports surfaced last week that Readerlink was working on a counteroffer, but no new bids were received before the deadline, meaning that Elliott is officially the owner-in-waiting of America’s largest bookstore chain. Any successful counteroffer would have required the new buyer to pay a $4M fee to Elliott, and while it is technically still possible for another offer to be made, the breakup fee has risen to $17M. A B&N spokesperson said that since the retailer received no new bids, it will work toward completing the purchase by Elliott, which is expected sometime in Q3. The B&N deal with Elliott received a largely positive response from publishers, with big and small companies alike expressing relief that the chain had found a buyer with the resources to put it on firmer financial footing. Publishers were encouraged the most by the news that James Daunt—a bookseller who revived the fortunes of the U.K. bookstore chain Waterstones—will take over as CEO of B&N once the deal is completed. Elliott bought Waterstones in April 2018. “Nobody was benefiting from the recent struggles of B&N--not other bookstores nor publishers, and least of all authors, readers, and the culture of reading in this country,” said Michael Reynolds, publisher of Europa Editions. “Something needed to happen, and I think this particular something is a positive development. James Daunt has proven to be an outstanding executive for Waterstones and, most importantly, a real bookseller. If he can turn things around for the company while remaining true to the idea of Barnes being a bookstore chain, much as he has done at Waterstones, authors and readers will be well served.” Daunt said that his priority with B&N is not to cut costs but to find a way to arrest the decline in sales and return the company to growth... “Elliott expects, at some point, to sell Barnes & Noble for a lot more than they bought it for,” Daunt noted. “But they also know that they will only do that if [B&N] can make the business shinier, bigger, and better. To do that, they will need to share some of their treasure with us. The simple fact is that B&N needs money: people want to shop in places that look modern, clean, and inviting. The B&N stores look tired"...

Target Expands Curbside to 1,400+ Stores
SN: "Target announced an expansion of its curbside or “Drive Up” service to over 1,400 stores on Monday. “We’re well on our way to making Drive Up available in most Target stores by the end of the year,” said Dawn Block, senior vice president, digital at Target. “We know guests want same-day services, and we’re eager for even more guests to be able to try Drive Up — our fast, top-rated service.” This expansion from the Minneapolis-based discount store retailer came on the heels of its Shipt direct delivery announcement last Thursday. It’s the latest move by Target, which has been aggressively expanding delivery and curbside in an effort to compete with the likes of Amazon and Walmart. Customers using Drive Up can order via the Target app and select Drive Up at checkout. Target notifies customers when the order is ready for pickup and the store is alerted when customers are on the way. There are designated spots for Drive Up customers. Drive Up is available for the first time in New Jersey, Delaware and Connecticut. Online fulfillment remains a cornerstone of Target’s growth strategy. “We’re seeing a really positive guest response to our same-day digital fulfillment services, which drove well over half of our digital sales growth in the quarter,” Target Chairman and CEO Brian Cornell said during the company’s Q1 earnings call in May"...

Weis Using AI to Engage With Customers
SN: "Weis Markets aims to get closer to its shoppers with the adoption of an artificial intelligence-based customer engagement system. The Sunbury, Pa.-based grocer is readying to go live with the Birdzi real-time digital ecosystem, designed with regional food retailers in mind. The platform’s AI relationship engine uses several hundred attributes for each shopper — updated with each purchase — to give grocery retailers a higher degree of relevancy in tailoring customer marketing and meeting shoppers’ individual needs"...

Kroger’s Indianapolis Employees Ratify New Contract
PG: "The Kroger Co.’s Central division employees in Indiana ratified a new labor agreement with United Food and Commercial Workers Union Local 700. The agreement is part of the Cincinnati-based grocer’s Restock Kroger program in which the Kroger Family of Companies is investing an incremental $500M in associate wages, training and development across the company... The agreement with the Central division team covers nearly 9,500 associates under the Indianapolis collective bargaining agreement with UFCW Local 700 and raises wages to $10 an hour for most clerks with regular wage increases every six months"...

Ahold Delhaize USA’s RBS Arm Opens Tech Office
SN: "Ahold Delhaize USA’s Retail Business Services (RBS) arm has officially opened a new technology office in Quincy, Mass., that includes an innovation lab and an incubator for tech startups.The building houses 200 IT associates that provide technology services for Ahold Delhaize USA supermarket chains, including Stop & Shop in the Boston area. The company’s other grocery retail brands include Giant/Martin’s, Food Lion, Giant Food and Hannaford, as well as online grocer Peapod"...

Former Snachat, Quidsi Execs Launching Amazon Rival
RetailWire: Imran Khan, the former chief strategy officer at Snapchat, along with his wife, Cate Khan, who previously worked at Quidsi, have launched Verishop, a new online platform designed to bring “the joy back to shopping.” Quidsi was co-founded by Marc Lore, the current CEO of ecommerce for Walmart U.S., and was acquired by Verishop, which features curated collections of men’s and women’s clothing, home and beauty products, offers free two-day shipping with no minimum purchase and free returns as part of its 24/7 customer care. The site does not include third-party sellers, preferring to purchase inventory directly from brands such as AllSaints, Boll & Branch, Levi’s, Manduka and Spiritual Gangster. Verishop has launched with about 160 brands on board and plans to have more than 300 by the end of the year. Going without third parties enables Verishop to certify that counterfeit goods will not be sold on the site." The site also features The Responsible Shop, which offers “an assortment of clean and conscious products that make you look and feel good,” and Tastemakers, a collection of items that are recommended by a variety of social media influencers with expertise in different areas. Verishop is working with seven individual tastemakers at launch"...


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