The Last Tycoon of Print
As Rolling Stone celebrates its 40th with relatively few signs of senescence—on the business side, at least—its founder and impresario Jann Wenner comes into focus, more than ever, as the absolute last of his kind. He will be the last to reap the trappings of moguldom from a relatively small media company—just three magazines, the others are Us Weekly and Men's Journal, with revenue around $375 million. He'll be the last to ride an under-discovered cultural moment to print riches. As he notes, rock music was derided or ignored by the mainstream when he launched Rolling Stone. It's impossible any burgeoning mass movement could be so overlooked today.
Almost certainly, he is the last major print CEO to so blithely disregard the Web for so long. Up until early 2006 the Web page of Us Weekly consisted of a subscription coupon. Today the operations of Rolling Stone's Web site remain in the hands of digital-media company RealNetworks (RNWK ), which nets the magazine around $2 million a year in licensing fees as well as, Wenner says, a share of ad monies. Wenner promises ramped-up Web moves, but he proudly reports "we never lost tons of money chasing down ridiculous online ideas." He remains the kind of sole proprietor who's happier to save money on the Web than make it, and professes contentment with Rolling Stone's Web deal.
That opinion is not widely shared by company executives. But Wenner Media remains a company driven to a remarkable degree by the desires and idiosyncrasies of its 61-year-old founding entrepreneur, who also maintains a very fluid view of the future. Succession planning? "I haven't thought about it all," he says. Pressed further, he concedes the "possibility" of selling the company. "It's not inconceivable," he shrugs. "It's not on the table now."
Another possibility: turning it over to some of his kids. Jann has four, ranging in age from infancy to early twenties. (He and his partner Matt Nye, for whom he left his wife, Jane, expect twins in January.) Divining the mercurial Wenner's whims is never easy. But it is worth noting that a sale by Wenner and his estranged wife—who, along with a trust for their kids, are still the company's only shareholders—would likely trigger substantial capital gains taxes, given the company's massive run-up in value since the two founded it.
Rolling Stone's staying power frankly astounds me. (And not just because the intoxicant-laden tales Wennerites tell about the '80s, some of which surfaced in a front-page Wall Street Journal story, leave me wondering how it made it to 1990.) As a property, it is a very strange beast. It's pitched at young men, but is oddly fixated on boomer icons. Often it turns over its cover, and significant swaths of its pages, to pushing-sixtyish friends-of-Jann like Bruce Springsteen. (In reeling off a list of those interviewed for its third 40th anniversary issue—Rolling Stone has very high self-regard—Wenner refers to the likes of Bono and former President Clinton as "our guys.")
This disjuncture between audience and object, though, isn't hurting company ledgers much. While its primacy to the company's bottom line was usurped by Us Weekly, Rolling Stone still throws off around $25 million in profit on about $120 million in revenues, even after a slight profit dip in recent years. Its staying power is not so much about street cred with readers as it is with advertisers. Big marketers like Cadillac (GM ) increasingly piggyback on music as a branding vehicle, and Rolling Stone remains the obvious call to make, says one former executive. Plus, top marketing and ad folk are old enough to skew more boomer in sensibility—read: Rolling Stone-friendly—than twentysomething.
A picture of a twentyish Wenner—in his outsider days when his nose was pressed up against the window while the culturati partied—is on display in his spacious, ultra-tidy office. But that Jann is long gone. More telling are the shots of him laughing it up with pals recognizable by one name: Arnold, Bruce, Mick. Today, a chief regret is wishing he'd "spent more time skiing." (For a guy who spends 60 days a year on the slopes, this is saying something.) But then he created this improbable role and celebrity for himself—from, of all things, starting a magazine.
In this, too, he'll be the last.
For Jon Fine's blog on media and advertising, go to www.businessweek.com/innovate/FineOnMedia
By Jon Fine