Old mags survive financial disaster
Surfer is the oldest surfing magazine in the world, an ironic accolade in a sport based mostly on the fleeting beauty and vigour of youth. It and its almost indistinguishable brother publication, Surfing, have, since their halcyon days in the 1960s and 70s, pinballed separately from one publishing company to another. In 2007, they were brought together when they were acquired by Source Interlink, a company that publishes magazines and dabbles in other industries.
Source Interlink has not posted a profit since the second quarter of 2007, which meant that when the real bad times hit in late 08, it was in the same shape as Ricky Hatton was when he stepped into the ring with Manny Pacquiao on May 3.
Last week, Source Interlink filed for a “chapter 11”, which is the corporate equivalent of what Hatton probably wishes he’d done: take a dive, plead for mercy and hope the world doesn’t think you’re a wimp. Hey, it’s either that or a knockout hit.
Understandably, the editor of Surfer, Joel Patterson, reckons his bosses made the right call. “It’s actually a really good thing,” he told STAB. Chapter 11 is a mild strand of financial doom. A cursory look through America’s big business sector reveals a host of well-known companies that have declared Chapter 11 bankruptcy (Chrysler, General Motors, United Airlines, various real estate giants, Obama’s suit maker) none of whom will be going anywhere.
It means that rather than answering to a bunch of goons with aluminum baseball bats, Source Interlink joined hands with their creditors in a maudlin rekindling of their relationship. Working together the two sides developed a business strategy that allowed Source Interlink to pay its debts while also keeping its operations running. The creditors get their coin and the Source Interlink executives are not force to flee to Guatemala with suitcases full of unmarked Benjamins. It’s win- win (or is it?). If Source Interlink vice president, Al Crolius is to be believed, the new business plan will see their debt will be cancelled in as few as 35 days.
“By filing for chapter 11 bankruptcy protection, the courts make it possible for Source Interlink to get its affairs in order,” Joel said. “It could have been worse.”So the company is safe, for now. But what about the two surf titles? Given that surfing is the only action sport in which Source Interlink has two titles, wouldn’t it make sense to merge the two, or, in other words, kill one?
“Not from what I’ve been told,” said Surfing editor Travis Ferre, when I asked whether Surfing was under threat. Travis says both titles are profitable, which is the key to survival in Source Interlink.
“We are the golden child, in a way,” he said.
Al Crolius backs this. “Surfer Magazine generates nearly a 25 percent bottom line return, and has continued to do so during the downturn, though it has seen advertising declines,” he told another website.
So while the refrain, “We’re bankrupt! Yay!” is a confusing message, it’s a reprieve for our sport’s oldest titles. – Jed Smith
Posts: 12
Reply #12 on : Mon December 14, 2009, 16:17:11