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Tuesday, March 26, 2013

WHERE DO I GO FROM HERE?-EXPLORING OPTIONS

It certainly wasn't the  best of Times. The rumors were rampant. Though most knew something was going on, we tried to operate as normal. In the midst of the turmoil and uncertainty, key people were leaving. My phone was ringing off the hook. One call from Joe Webb, Chemco's marketing manager posed an interesting opportunity. Joe, studying at NYU, was looking from someone to underwrite the research for his doctoral thesis on marketing in the printing industry. He needed $1500 and since he had recently doubled his ad pages in GAM, how could I refuse. There was one hook. When it was completed, I wanted him to put it in lay language and submit it in two parts for a special feature in GAM. I could then charge it to the editorial budget, and at the same time, solidify our campaign and strengthen our focus on marketing, a win-win situation..

A couple of days later, Ron Andriani came into my office with annother proposal, to acquire the regional printing publications. I wan't sure if he had heard the rumor or was just floating a dumb idea. I played it as dumb idea. I asked, "Why would you want to siphon of ad dollars from the mother ship and compete against yourself?" He shrugged his shoulder at the rejection. But it wasn't a bad idea if you weren't connected with Graphic Arts Monthly, and my gut told me that when the sale was finalized,  I'd be out. Leo Joachim had launched Printing News East in 1928. When he passed away in 1985, his wife Florence, who still loved him dearly, continued the publish the weekly news publication. She was about 78, but tiny and frail. I called her and visited the PNE office which looked like it had in the 1940's. I asked if she would be interested in selling since Leo had been gone a year. She surprised me by saying she no longer owned it, and that Playbill, the theater handout had purchased it. I called the owner whose name was Brill. He explained he and Leo were good friends and had promised Leo, that when he passed, Brill would buy the publication to protect Florence. "It's my fiduciary duty to Leo to keep Printing News in the family," he explained. (The end of this story will come next week.)

So much for making an acquisition.. But the next day another opportunity A phone call from PIA Chairman Bob Houk informed me that Rod Borum was leaving (translation, fired) and he and Bob Jocham, my travel companion in Italy in 1983,  thought I'd be a good candidate to replace him. I asked Bob to send me the prospectus and the job description. A week later I received a large envelope with "CONFIDENTIAL" written in red ink. I opened it and started laughing. The first paragraph contained a physical description of the perfect candidate."Tall, slim, full head of hair, white (the word Christian was not included, but implied.) I called Bob Houk and asked if he had read it. "No", he answered.  "Bob, you know there is nothing in this about business acumen, intelligence or knowledge of the industry. And we are friends. You know I'm short, fat, bald and Jewish. I wouldn't get by the first interview. They wanted a robot who won't disturb the board," I told him. Ray Roper, who took over the job in 1987 was just what they were looking for.

Ironically I was in Arlington Virginia at PIA for the 1986  Marketing Excellence Awards, when I learned that  the deal had been done. It was late September. Jack Abely called as I was making myself presentable for the presentation. It was about 7 p.m. and I was in my jockey shorts when the phone rang. I sat on the bed, picked up the phone and heard Jack's voice on the other end. "The deal has been finalized. We've been sold to Cahners (Reed) for $161 million. The six of us still in the consortium have been axed. You and Tim (Burkholder) will oversee the transition, They (he didn't say who) will be in your office next week to discuss the change in management" he told me in resigned, staccato tones. I thanked him for the information and we both disconnected simultaneously.

My mind was whirring with the information. Cahners had paid 33% more than I had valued our company. Was I wrong, or were they idiots? Of course, they had no debt service to worry about, with a several billion dollar entity backing them. But there was no way this acquisition would work. I went to the presentation, and, by the way, Dennis Castiglione of Carpenter Reserve repeated his 1983 victory with another outstanding marketing program. (In tomorrow's blog the new bosses show up in my office.)