The Importance Of Being Solvent

It started in 1967 as an underground newsletter, its mimeographed pages dispatched to L.A.'s gay community by a nascent band of journalists who worked together in the mailroom of a local TV station. Since then, The Advocate has become a standard-bearer of gay-oriented journalism. And it has consistently lost $1.5 million a year.

Now, The Advocate finally may be approaching financial viability. Since five investors, including publisher Sam Watters, bought the ailing publication in 1992, paid circulation has rocketed 50%, to 72,000. Mainstream advertisers such as Virgin Atlantic Airways and Hamilton watches are expected to raise the biweekly's ad revenue fivefold by yearend.

The Advocate is even doing deals. On May 5, its parent, Liberation Publications Inc., announced its purchase of Alyson Publications Inc., a gay and lesbian publisher of 24 to 28 books a year--among them the controversial Heather Has Two Mommies. Alyson should produce $15 million in revenue by 1996, Liberation says.

The force behind The Advocate's turnaround is Watters, 41, a Yale-educated art historian. Prior publishing experience: zip. Yet he has moved quickly to remake The Advocate. By the end of his second day on the job, Watters had cut his staff to 44 from 78. With editor Jeff Yarbrough, 33, he abandoned The Advocate's newsprint for glossy paper and color and recruited big-gun contributors such as Larry Kramer and Tony Kushner to author interviews with top stars such as k.d. lang, Tom Hanks, and Madonna.

FAT WALLETS. Not everyone is happy with the changes. "They've turned it into more of a People magazine," says Richard Labonte, general manager at A Different Light bookstore in San Francisco. But advertisers have welcomed the facelift, which included spinning off the magazine's racy classified ads. One big catch was Johnnie Walker Black Label scotch, which bought space in the April issue. The attraction: The Advocate's demographics--educated professionals, typically in their late 30s, whose household income averages $72,000. As for sexual orientation? "Who cares?" says Michael Chaney at Avrett, Free & Ginsberg, Johnnie Walker's ad agency. "Alternative lifestyles have become part of mainstream America."

Other gay-oriented magazines are gaining readers and advertising as well. The Advocate faces plenty of competition from sometimes saltier publications, such as Ten Percent, Genre, and Out--which won an ad from General Motors Corp.'s Saturn division for its May issue. No more mimeographs for this crowd.

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