The nation’s number one African-American magazine is reported to be in financial trouble, stated Newsweek magazine.
Johnson Publishing, which publishes Ebony and Jet magazines, is seeking a buyer or investor for its flagship publication, Ebony, to ensure that it survives, the report said.
|THE END?— Ebony’s latest issue features an interview with music legend Whitney Houston and coverage of President Barack Obama in Ghana.
CEO Linda Johnson Rice, daughter of legendary founder John H. Johnson, has approached, among others, the report says, Time Inc., Viacom, as well as private investors.
The story primarily referred to Ebony, however, Jet has the higher circulation and has been a mainstay in Black homes throughout the country as the main source of Black news and information, whereas Ebony concentrates on features. The company is split into two divisions editorially, but there’s only one advertising and circulation department. With Ebony being the larger of the two publications in physical size, it is more costly to publish, plus sales have dropped more rapidly than Jet. Calls to Johnson Publication in Chicago were not returned by Courier press time.
There are also rumors that the Johnson Publication building in downtown Chicago is also up for sale.
|LINDA JOHNSON RICE
If Johnson Publication fails, it would be the last of the Black communication giants to fall. Time Inc. already owns Essence, a monthly lifestyle magazine for African-American women. Viacom, meanwhile, owns BET. Ebony’s woes seem to dash the hopes that African-American- owned or oriented media would see a big lift in the marketplace with the election of Barack Obama. Rice is a close member of the Obama’s Chicago social circle, the report says.
It’s unclear if negotiations are presently under way between Ebony and any potential rescuers. Rice, given the magazine’s historical significance and its deep roots in her family, hopes to remain an integral part of the publishing company, say sources. This suggests she prefers to woo a partner rather than sell the magazine outright.
According to Chicago Business, Johnson Publishing Co. is experiencing the worst financial downturn in its 67-year history. In the article, “Legacy on the Line,” the online magazine states that in the past three months Johnson has been hit with contractor liens claiming the company failed to pay for work worth nearly $500,000. In May, Johnson mortgaged its South Michigan Avenue headquarters building and parking garage to its printer, R. R. Donnelley & Sons Co. Loan documents say the deal secured previous debts to Donnelley totaling $12.7 million—another sign of financial distress for the nation’s largest Black-owned publishing company.
Chicago Business cites other Johnson Publishing woes:
•Revenue fell 28 percent to $328 million
•Their employee head count tumbled to 340 from 503
In an e-mail message to Chicago Business, publisher Linda Johnson Rice called the mortgage and a $2.6 million trade credit from Donnelley a “prudent” move. It acknowledges the liens and says, “We fully intend to pay the contractors.”
“It’s no secret that the entire publishing industry, including Johnson Publishing Co., is feeling the pressure of the current economy,” the statement said. “And, like any conservatively managed company, we’re taking whatever precautions we believe are prudent to give us the necessary resources to weather the current economy.”
“As we’ve indicated previously, we are exploring a range of options to support our core media business,” according to a statement issued by Johnson spokeswoman Wendy Parks.
But Johnson Sept. 28 denied the Newsweek report that the company has discussed or is talking about a sale or investment with media conglomerates Time Inc. or Viacom.
It is not known whether any of Johnson’s other holdings, including the digest-sized weekly Jet, are included in any sale or investor talks.
Johnson, the world’s largest African-American owned and operated publishing company, is facing the same dilemma as much of the print-media world—sharply declining advertising revenue.
The Media Industry Newsletter reported last week that Ebony’s advertising pages were down 40 percent this year through October compared with the same period last year.
Johnson also canceled this season’s Ebony Fashion Fair, the first interruption in the 51-year history of the legendary fashion show launched by Eunice W. Johnson, wife of company and magazine founder.
Parks declined comment on the company’s finances. Johnson Publishing was born in 1942 with John H. Johnson’s dream and a $500 loan on his mother’s furniture. Johnson died four years ago. The late Johnson is credited with introducing Rev. Dr. Martin Luther King Jr. to Chicago, and making such breakthrough decisions as publishing a picture of the severely mutilated face of Emmett Till.
Michael Corty, analyst with Chicago-based Morningstar, said magazines have been struggling much the same as newspapers because of declining revenues. Though Corty declined to speculate who might buy or invest in Ebony, he said media giants Disney, Viacom, Time-Warner and the like “are not putting their money into magazines.”