Hole in One
the rest of the economy is in free fall, mergers and acquisitions in the
media industry are galloping along as large companies scoop up niche titles
from newspaper groups.
Within the last six months, two major golf journals have changed hands, sold by newspaper companies to large, cash-rich media conglomerates. The Tribune Company sold Golf Magazine and the rest of its Times Mirror Magazines to Time Inc., the magazine arm of AOL Time Warner, for $475 million. The New York Times agreed to sell Golf Digest and three other golfing magazines to Advance Publications for an undisclosed sum between $350 million and $440 million. Industry watchers like Tom Wolzien of Sanford C. Bernstein & Company, a research firm, regard these transactions as a response to the imperatives created by the advertising industry’s shift into niche markets (and away from broad-based demographic newsmagazines).
At the moment, the glittering prize for any golfing advertiser is Tiger Woods, and he has been delivered to Advance Publications with its purchase of Golf Digest. "Golf Digest owns an exclusive magazine contract with Tiger Woods," said John Fry, a former sports editor for The New York Times. Although it does not control images, typically an exclusive contract gives a publication the right to be the only magazine for which a celebrity will write. For instance, in the April 2001 edition of Golf Digest, a 10-page article by Woods gives advice on the game, complete with photographs in which he demonstrates points. Under the first page, in red, is the note: "Tiger Woods writes instruction articles only for Golf Digest."
Wolzien monitors AOL Time Warner as part of his job. He sees Time magazine, for instance, as being abandoned by some advertisers for targeted specialty niche markets. "Larger advertisers," he wrote, have "shifted a portion of their print advertising budgets to smaller, more tightly targeted publications." Although Walter Isaacson, editorial director of Time Inc., told journalism students at Columbia University that "nothing of value is created by a magazine dedicated to advertising," advertising remains the main source of revenue for Time Inc.
Also behind the purchases are the golf books’ healthy circulation figures. Golf Digest has 1.6 million subscribers; Golf Magazine has 1.3 million. S.I. Newhouse, the chairman of Advance Publications, has indicated that good journalism was a factor in his company’s purchase of the golf magazines.
But Thomas Maier, Newhouse’s biographer, thinks the deal’s timing was critical: "Advance Publications often picks up bargains when a recession hits."
The two newspaper groups’ motivations for selling appear to be a mix of financial opportunity, a return to core business for the Tribune Company and, in the case of the Times Company, which owns The New York Times, the threat of competition from Time, Inc. after it purchased Golf Magazine. Last year, The Times Company tried to buy Golf Magazine from Tribune, in order to control the competition with Golf Digest, which it already owned. But it lost out to Time Inc. Suddenly the Times Company was up against a magazine industry giant; it knew it could never compete, even though it would have preferred to keep Tiger Woods. Just a few months after Time Inc. outbid the Times Company for Golf Magazine, the Times Company took itself out of the magazine business completely, selling its magazine group.
There is something inevitable about the consolidation of the top golfing magazines within the folds of Time Inc. and Advance Publications, two publishers that receive a large proportion of their profits from advertising. It is part of a shift in which advertisers want to place their products. In some ways, Tiger Woods, with his $50-
million-a-year product sponsorships, represents a similar mix of sports and commerce. While he charms us with his graceful modesty as he strides smiling and unchallenged across the greens of the privileged at St. Andrews, he is also proving himself to be a master of the "sell."