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Wednesday, March 27, 2013

BUTTERED UP, THEN BATTERED DOWN

Several days after we had been sold, the CEO of Cahners (Reed) called to introduce himself and make an appointment to come to my office. At 10 a.m. on Wednesday, October 8, 1986, two  executives showed up in my office, Bill Platt, the CEO, and Terry McDermott,, the president. I showed them into my office, and offered coffee. They declined. They were all business. I had approached this meeting as if it were a chess match. For a couple of days, I had been keeping a check list of the moves I would make if I were in their position. But, when they arrived, I felt much like a homeowner, who had a visit from burglars. assessing the valuables they couldn't wait to get their hands on. I realized immediately that I was "them" and they were "us". If you've ever been acquired, you'll know how I felt.

 I sat them on one of the couches, and pulled up a hard backed chair. I wanted to be sitting on a higher plane than they were. Platt did most of the talking. He had done his homework, and had an accurate read on Graphic Arts Monthly's meteoric growth and Fire Engineering's turnaround. He started by complimenting on the job we had done. He explained that Tim Burkholder would have responsibility for the Barrington, Illinois transition, and I'd oversee the New York operations. Technical Publishing had about 350 people in the Midwest location and we had about 400 employees in New York City. They asked some personal questions, continuing to say nice things about the job I had done. I was trying to read them without success. Platt said, "We see your Publisher's Perspective is the best read page in GAM," McDermott chimed in, "And you're the only publisher who has come from the editorial side."  I nodded my head in agreement, while allowing them to do most of the talking, but I felt the boot ready to kick me in the butt.

 And it did. (To better understand what they were to tell me, readers should know that magazines operate with an advertising/editorial ad ratio, usually 60/40, but every additional percentage point of advertising is worth about $15,000 to the bottom line, depending on the circulation base. As GAM continued to prosper I had brought the ad percentage to 74%) "We want you to make some changes. First, we operate on a strict 60/40 formula company wide and we want you to abide by that." (In my mind I quickly calculated $225,000 erased from the bottom line.) Secondly we want you to stop those "begging letters". (That was another $125,000 wiped out on GAM alone and more than $600,000 company-wide,) I could believe what I was hearing. Within minutes they had lopped 15% off of our bottom line.

Then came the telling blow. Because Jim Morris, publisher of Datamation, the largest magazine in our family, was one of the consortium, he had been severed, and that book was without a publisher. "We'd like to you replace him," they advised me, They asked about Ron Andriani. "He's a great salesman, but he's not a publisher," I replied honestly. "We have to make do," they answered in unison. You'll be publishing director of the three magazines, including Fire Engineering." There was not much more to say, but on my check list I had two questions that needed answers. The first involved contracts for 1987. Platt told me the current agreements would be extended to March 31, the end of Cahners' fiscal year. (The first thought in my mind was that March 31st would be my last day. (How appropriate I thought.The next day was April Fool's Day.) My final question was the most important. "I know you have your circulation department in Denver and accounting Newton, Mass. What do I tell the 160 people in those departments about their future?" Without blinking an eye lash, Platt replied, You can tell them we are going through a reorganization, and won't make decisions for six to nine months, maybe a year.. But, if they are interested in relocating to Denver or Newton, they should let you know."

It sounded reasonable to me. But, you guessed it. They were lying through their teeth. By the end of the year, I knew exactly where I would be on April 1,..out in the cold (The best part of this story in tomorrow's post. I when I tell Platt  he should do something Clint Eastwood had noted in his "chair speech" at the Republican Convention, was a physical impossibility.