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At the end of a difficult 12 months at B2B publisher Incisive Media, the company is majority owned by its lending banks and lost control of American Lawyer Media just two years after buying it. But global CEO and founder Tim Weller tells paidContent:UK that this is the most optimistic period in the company’s history and after nine months of financial talks he’s looking forward to concentrating on making money online, including charging customers for access.
Weller admits the company “overstretched its balance sheet” on two fronts: a leveraged Apax-backed MBO in 2007 and the debt-funded $630 million American Media Lawyer acquisition the same year left its debt at nine times EBITDA. Weller says: “Yes we have new owners but they are much more long term in their approach (than Apax) as they’re looking to 2013 for a view (on a possible exit).”
— Debt-for-equity: So Incisive was re-financed in a debt-for-equity deal that emerged last week and was formally announced on Tuesday. As Telegraph.co.uk this week reported, in this month’s deal a syndicate of 18 banks plus RBS took on 82.5 percent of shares in the business in return for writing off more than £110 million in debt — the rest is owned by management and Apax, which has seen its investment of more than £100 million written down to a fraction.
— What happens next? “Our focus now is ensure that we accelerate the migration of our content from the print to the online.” Weller says that involves mobile publishing (eight magazines rolled out mobile version last week), financial data, communities and online video. Weller has said before that the traditional B2B controlled circulation model is unsustainable, so now he’s “accelerating the process of how we monetise our brands and charge for content, including paywalls“. The options being considered and experimented with are selling content on a pay-per-story model, via subscriptions and — perhaps most appropriately for a niche business audience — corporate site licenses. Some Incisive sites, such as Risk.net are already subscription only, but others like the flagship Investmentweek.co.uk are not. That could be about to change.
— Not just a UK concern Incisive might have lost a sizeable chunk of itself as ALM is spun off to a separate business, but Weller stresses that it’s “not just a UK business” and still has almost 100 North American staff as well as between 70 and 80 in Asia. Ironically, ALM and Incisive have spent time and money integrating with each other in the last two years, but will now have to unpick and rebrand themselves in the US.
— No sell-offs needed In contrast to some public and private B2B publishing rivals, Weller hastens to points out, Incisive acted early to cut costs through mag closures and redundancies and now doesn’t need to find more savings. “We don’t have loss-making assets in the business. Whilst we’ve had too much debt, the business is still very profitable,” he says. Incisive isn’t ditching its magazines — a subscription to Risk is almost £1,000 a year and is now printed in seven languages — but he accepts that mags have to be more analytical these days.
— Downturn is here to stay: Forget the cautious optimism we’ve heard from the like of Sir Martin Sorrell of late: “Anyone who thinks 2010 is going to be better than 2009 is kidding themselves and has probably still got their head in the sand,” says Weller. Media businesses should plan to experience the same volatility and slowed growth of the last nine months for the next 15, though on a bright-ish note he adds that “at least we know where we are”.