The New York Post’s Keith Kelly nails down a mag biz story long rumored, long expected, but never confirmed before: Felix Dennis to sell his Dennis Publishing unit in the US.
Actually make that “Felix will sell most of Dennis Publishing.” From what I hear, Felix is not expected to sell his high-toned nouveau newsweekly, The Week. Thus the upcoming sale is for three titles: Maxim, smaller laddie sibling Stuff, and music magazine Blender.
A Dennis spokesman declines to comment on any of this, but insiders and outsiders confirm it.
Felix’s obit will stress the launch of Maxim above all else. But the real genius of Maxim was getting it to America first, since it was a trailing lad title in its UK home turf behind the likes of Emap’s FHM and IPC Media’s Loaded.
Felix has made no secret of his desire to sell—most notably in an interview with 60 minutes—and he’s built a substantial fortune from launching and selling magazines. If you’re him, getting out of the US now has to look pretty good. Magazine valuations are still high. If you’re going to worry about certain magazines formats being impacted by mobile technologies, well, something like Maxim—photo-heavy, text-terse, and aimed at young men—is what you’re going to worry about. (Maybe not as much as you would about teen magazines, but still.)
At its peak, which is not 2005, Maxim’s revenues were around $145 million and its profits were around $50 million, a former company insider once told me. The best guesses put profits today lower—around $35 million, perhaps a bit higher. UPDATE 4/10: An insider insists current profits are more like $40 million.
Stuff, the oft-revamped secondary title in Dennis’ stable, is described by people inside and outside the company as being marginally profitable. (I find this surprising, too, but smart folk with no axe to grind say it’s true.) Blender is still unprofitable.
Potential bidders: Time Inc., Hachette Filipacchi US Media (if headquarters in France allow them to ante up), private equity guys who’ve been sniffing around magazines. Conceptually, I have a hard time imagining Hearst playing for it—but then they do publish Cosmopolitan, which is for women but not all that far from Maxim in terms of its risqué quotient.
Possible price: $350 million and up. UPDATE 4/10: Going by the insider’s figures, the possible sale price starts around $400 million.