Rolling Stone Turns 50 Debt-Free as Wenner Scion Waits in WingsBy
HBO said to make documentary for magazine’s golden anniversary
Wenner Media scraps plans to move to Brooklyn from Manhattan
Rolling Stone magazine has found something even cooler than the latest indie rock band: freedom from debt.
After selling celebrity-focused Us Weekly magazine last week for $100 million, Rolling Stone owner Wenner Media LLC will be debt-free for the first time in a decade, according to Gus Wenner, who officially runs the company’s online operation. And with the sale of a 49 percent stake in Rolling Stone last year, Wenner now has the funds to invest more in guiding the music and pop-culture icon into the digital age.
“The debt will be completely paid off, and that takes a huge load and focal point off the table,” Wenner said in an interview from his office in midtown Manhattan, where proofs of an upcoming Rolling Stone cover sat on his desk next to a book of Bob Dylan’s lyrics.
The sale of Us Weekly comes amid a changing of the guard at Wenner Media, one of the last family-owned media companies. Gus Wenner runs the day-to-day operations. His father, Jann, who founded Rolling Stone 50 years ago, spends winters at his home near Sun Valley, Idaho. While some former employees say 26-year-old Gus lacks the experience to run a media company, others say his youth could help a magazine that has focused too much on aging rock stars when advertisers are seeking younger readers.
Gus Wenner declined to say whether he’d officially take the reins from his 71-year-old father this year. But he said he’s gained valuable experience while running the company’s web operations since 2013, embracing the internet in a way that his father never did.
“He was a little resistant to digital, and he didn’t believe in it to the degree he believed in print,” Gus Wenner said of his father. “When I came along, I spoke the language of a young person and felt we needed to grow the brand in other areas.”
Wenner Media sold half of Us Weekly to Walt Disney Co. in 2001 for about $40 million, then borrowed to buy back the stake in 2006 for $300 million. After the rise of online media and the financial crisis accelerated the decline of print magazines, Wenner Media was forced to make cuts to help pay off the loan, according to a former staffer who requested anonymity.
A Wenner Media spokeswoman said the company has been “aggressive in making the necessary staff changes to evolve our business” and has added staff while making “print-based layoffs.”
Wenner Media plans to pay off the money it still owes: about $49 million in corporate debt, according to Moody’s. Now that it has fewer employees, Wenner Media no longer plans to move to Brooklyn from Manhattan, Gus Wenner said. And Rolling Stone is looking to invest more in video, including TV and film projects. Filmmaker Alex Gibney is making an HBO documentary about the magazine for its 50th anniversary, according to a person familiar with the matter who wasn’t authorized to discuss it publicly.
Wenner Media is hardly out of the woods. Last year, Rolling Stone and reporter Sabrina Rubin Erdely lost a defamation case related to an article about a purported rape at the University of Virginia and were ordered to pay $1 million and $2 million, respectively. Later this year, the company is scheduled to face another trial related to the article. A fraternity is seeking $25 million in damages, and Moody’s said in October that Wenner Media’s liability insurance may not be enough if the company loses multiple cases.
The company declined to comment on whether its insurance would cover damages.
Meanwhile, Rolling Stone’s newsstand sales fell 9.3 percent last year, according to MagNet, which tracks magazine sales. U.S. traffic to Rolling Stone’s website was down 28 percent in January of this year from its peak in December 2015, according to ComScore Inc.
Wenner Media has struggled to attract advertisers that are spending more of their shrinking print budgets with magazine giants like Time Inc., Hearst Corp. and Conde Nast, where they can reach diverse audiences across many titles. Brands seeking young males -- Rolling Stone’s core audience -- are shifting their spending to online outlets like ESPN.com or websites focused on video games.
Last year, Wenner Media responded by launching Glixel, a website devoted to video games. And Rolling Stone just made a year-long advertising deal with Levi Strauss & Co., the jeans company. Gus Wenner said he wants to strike deals with brands that go beyond advertising. He cited, as a model, making Rolling Stone’s archives available on the Google Play Newsstand.
“Long-term, I don’t want to be in the business of solely relying on ad revenue with the way things are changing so rapidly,” he said.
Wenner Media’s two remaining magazines, Rolling Stone and Men’s Journal, generated about $100 million in revenue in the 12 months ended last June, according to Moody’s. The company is profitable, Gus Wenner said, and its company’s digital revenue, excluding Us Weekly, has increased 70 percent since 2013, according to the company.
The magazine industry is struggling because Google and Facebook have absorbed the majority of online advertising dollars, said Nicholas Lemann, a dean emeritus and professor at Columbia Journalism School.
“It’s very hard for anyone else to make a dent,” Lemann said.
Lemann said Gus Wenner could help Rolling Stone reach younger readers but that he’ll need to “capture a cultural moment” like his father did in the late 1960s and 1970s.
Jann Wenner started Rolling Stone in 1967 from a San Francisco warehouse at time when the Grateful Dead and Jefferson Airplane were performing at local clubs.
On the wall of Gus’s office is an old photo of his father with long hair and a mustache in the early days of Rolling Stone, when gonzo journalist Hunter S. Thompson was writing drug-fueled dispatches for the magazine. Another photo shows father and son with Barack Obama after Jann interviewed him in the Oval Office the day after the 2016 election.
“This is a business that means everything to my family,” Gus Wenner said. “These are brands I deeply believe in and want them to be around another 50 years, at least.”