Going Glossy in the Housing Bust
A real estate investor and a used-car dealer going into business together sounds like the beginning of a bad joke. Especially when that business is a travel magazine. Yet Phoenix-based friends Joseph Diaz, former head of the Diaz Mendell Group, and Greg Sullivan, past chief executive officer of DriveTime Automotive Group, launched Afar magazine amid the media meltdown that shuttered glossies from CosmoGirl to Gourmet.
The frothy residential real estate market began to worry Diaz in 2006 when both his mailman and next-door neighbor asked him on the same day: "How about this real estate thing?" By the end of the year, Diaz, 30, sold his holdings and began looking for a new opportunity. To clear his head, he set out to India and South America with Sullivan, 52, a friend he'd met on a recent deal. While drinking Kingfishers on a beach in western India, Diaz says he realized "there wasn't a travel magazine capturing a place through a local set of eyes." Sullivan, then recently retired, agreed. So began Afar magazine.
After returning from India, Diaz read a dozen how-to books on the publishing business and then flew to New York to meet James B. Kobak, a veteran adviser to magazines such as Playboy. Kobak suggested they put together three sample issues. Diaz and Sullivan went a step further. With $15 million of their own money and investments from family members, they started an operation in San Francisco and hired a small staff of editors and salespeople. In August 2009 they launched the glossy, photo-laden Afar.
Each bimonthly issue remains an adventure. Its first publisher and editor-in-chief didn't work out, and Sullivan has taken over the editorial direction. Diaz spends half his time on the road marketing the glossy. "If we realized how much work it was," he jokes, "it might have prevented us from doing it." Still, in one year Afar's circulation has increased 50 percent, to 75,000. The magazine hasn't turned a profit yet, but it's preparing to launch afar.com, an online social networking component. "We're pretty optimistic," says Diaz, "considering we launched during the worst time in the industry's history."
FROM PUSHING PROPERTY TO SELLING AD PAGES
Amount required to start up Afar magazine, raised by Diaz and Sullivan: $15M
Days per year that Diaz spends on the road marketing the glossy: 120 to 150
Amount the magazine has spent on airfare since its August 2009 launch: $41,964
Cost of a single-page ad in Afar (there were 20 in the July/August issue): $9,750