Kelly writes:

ATTEMPTS by Newsweek CEO Tom Ascheim and Editor-in-Chief Jon Meacham to reshape the magazine into a lower-circulation weekly with a more Economist-like feel do not seem to be paying off.

Tucked in the fourth-quarter earnings report from parent Washington Post Company were numbers that suggest the magazine lost $28.1 million in 2009, the first year of the process.
…
Since Newsweek lowered its circulation — from 2.6 million to 1.5 million — it was forced to make corresponding cuts in its ad rates. The company hopes that lower production, distribution and employee costs will eventually enable it to return to profitability.

It is true that Newsweek lost roughly $28 Million in the last year. But to fully appreciate that number, one need remember that roughly two-thirds of that amount came in the the first quarter of last year, and included a write-down of over $6MM in severance packages. Further, Q2 of ’09 saw roughly $5MM in losses, and Q3 roughly $4MM. Q4? only $400k in losses. Correction! Newsweek actually turned a small yet significant profit of $400k in Q4 of 2009. However, to simply report annual losses, ignoring the revenue trend of Newsweek‘s core business – particularly in the midst an historic ad recession and repositioning in the market place, is not telling the entire story.

Frank De Maria, a spokesman for Newsweek, repeated this idea, telling Mediaite via email that “Q4 ’09 was actually very good for Newsweek in ad revenue, lots of momentum, new advertisers, good prices, best quarter by far of the year (new advertisers like Porsche, which shows we are attracting more luxury advertisers) – that momentum continues with advertisers like Mercedes just coming on, more Apple, Chevron, etc.”

De Maria continued, “Digital had a galloping Q4 – 100 million page views in September (highest ever) – 75MM avg for rest of the quarter, compared favorably to election time 08 (highest time in our history due to crazy national attention on election) – ad revenue also peaked in Q4 with our best quarter ever in ad revenue in our history.”

Measured purely by buzz, a fair and objective analysis of Newsweek’s redesign and market repositioning of its title has been a big success. And judging by the trending of its quarterly revenue numbers over the last year, it definitely appears to be heading in the right direction. But it also needs to be mentioned that 2010 will be a critical year for the news weekly – and the story of smaller quarterly losses will no longer be enough to quell its critics.

Writing in his Media Ink column, Kelly reports:

Condé Nast has corralled a pair of big-name Internet players in its bid to stop hackers from infiltrating the publisher’s computer network.

The owner of magazines like Vogue, The New Yorker and Bon Appetit, last week got permission from a federal judge to issue expedited subpoenas to Google and AT&T to try to obtain the identities of at least five hackers Condé claims are responsible for the breach.

The subpoenas are the latest chapter in S.I. Newhouse’s recently filed copyright infringement suit against the hackers who got their hands on material from Condé mags before publication, including GQ’s Men of the Year issue, and the December issues of Vogue, Lucky and Teen Vogue, which ended up on the Web site FashionZag.

Here’s a roundup of people who have reportedly taken the buyouts thus far via Michael Calderone, Gawker, Business Insider, and NYTPicker, which today confirmed that long-time Timesman Ralph Blumenthal is taking a buyout.

From Business Insider:

* Louis Uchitelle, who has covered economics for the NYT since 1987. Ironically, three years ago he was the author of “The Disposable American: Layoffs and Their Consequences.”

* Geraldine Fabrikant, who joined the NYT in 1985, has six publishers awards and a Loeb Award. She previously worked at Business Week

* Alex Berenson, who has been a reporter at The Times since 1999. He reported from Iraq in 2003 and 2004. He has written 3 spy novels. We hear he plans to become a full time novelist while still making occasional contributions to the Times.

* Jonathan Glater, who joined The Times in September 2000 after a stint as a Wall Street lawyer

Gawker has a much longer list:

This list is unconfirmed, but the source is generally reliable.

* Claiborne Ray — Deputy editor of the Obituaries desk and Q&A columnist in Science Times
* Nancy Sharkey – Editor; see this link.
* Andy Revkin – Science Reporter/Dot Earth. (Described as “possible,” not confirmed).
* George Kaplan — veteran national desk copy editor
* Juliet Gorman — a top web producer
* Mary Hardiman – Photo desk
* G. Paul Burnett — veteran staff photographer
* Jim Simpson – Photo editor
* Nicole Collins — A metro editor
* Barton Silverman – Veteran Photographer. He’s still a “Possible,” not confirmed.
* Additionally, eight more copy editors from various sections, three “Admin” personnel, and a foreign desk clerk are taking buyouts, according to our source.

Politico’s Michael Calderone has some D.C. names: Stephen Labaton, Neil Lewis, David Johnston, and David Stout.

Managing editor Bill Keller has said the Times needs to shed 100 positions so we may still be looking at layoffs in the coming days.

Writing for the NY Post, Keith Kelly had previously reported last Thursday that layoffs would be coming after several staffers would volunteer for buyouts.

“The biggest magazines in the Time Inc. empire — People, Time, Sports Illustrated, Fortune and Money — should find out today how many volunteers have stepped forward to accept buyout packages.

It appears that not enough staffers stepped forward for a buyout to preclude further cuts in staffing. The spokesperson for Time Inc continued, “Today’s layoffs will mean the vast majority of layoffs announced earlier this month will be complete.”

At this point, no numbers have been confirmed as to total staffers cut.

Hire a consultant, sure. Hire a turnaround expert, someone who can help you maximize the web. That one would have been useful, oh, three years ago. Or two years ago. Or one year ago. But of all the things to spend dwindling resources on besides town cars, they’re going with a PR crisis manager?

I need to calm down for a sec. From the Post:

CONDÉ Nast CEO Charles Townsend and Chairman S.I. Newhouse, Jr. are turning to Washington, DC-based crisis manager and media coach Michael Sheehan to help with PR.

Sheehan has coached Democratic presidential candidates from Bill Clinton to Barack Obama. He handled AIG during its near-death experience and JP Morgan in its acquisition of Chase.

A source said that Newhouse and Townsend were reluctant to make the hire, but did so under prodding from Lucky publisher Gina Sanders, who used Sheehan when she was launching Teen Vogue…morale at Condé has hit an all-time low. This year it has folded an unprecedented six magazines, including Gourmet and Cookie, and fired at least 460 employees. Its glitzy image has also taken a drubbing on Madison Avenue.

Here, let me save them some money: When your company’s “glitzy image” is part of the reason there’s so much schadenfreude about all the cuts you’ve had to make, maybe best PR move would have been to NOT hire the expensive PR manager.

It’s a little late to put a shine on this spin, I think. What is Condé going to do, un-shutter Gourmet ? Un-squander millions on Portfolio? Un-ignore the web from back when everyone was saying, “Why is Condé Nast ignoring the web?”

Un-spending money on frivolous things is a start; the cancellation of the annual Si Newhouse Christmas Luncheon & Seating Plan is a sad sign of the times but certainly appropriate given the jobs that have been cut. But the sad recent history of Condé Nast seems more like bad decisions following more bad decisions. It didn’t take a genius to figure out that there were spending issues at Condé. Maybe those might have been addressed before bringing in McKinsey, which presumably did not perform their services pro bono.

It may, on the other hand, have taken a genius to figure out that the Cookie, Gourmet, Portfolio and even Domino brands were worth something apart from glossy paper — clearly, because no one at Condé Nast seemed to have figured that out. (Domino — there is still nothing to replace it, especially for all those people aging into housing upgrades. Sheesh.) As my colleague Glynnis MacNicol has said, “Parsing the logic of Condé’s decisions is a frustrating game, one which we may not have to play much longer considering the pace at which the company is ridding itself of titles.”

Logic doesn’t matter so much when everyone’s rolling around in money. But things are different now, and Conde Nast has more than just its prestige glossy rep to preserve – there are jobs and people at stake, too. And customer who are already missing their favorite magazines. It may be Si Newhouse’s to screw up but its all of ours to lose.

Condé Nast hires crisis intervention expert [NYPost]

Related:
Why Did Time Inc.’s Layoffs Get So Much Less Attention Than Condé’s?[Mediaite]
McKinsey Bell Tolls: Condé To Shutter Gourmet, Cookie, Modern Bride [Mediaite]
Condé’s Cuts Come to Vogue [All Things D]
Chairman’s focus on glossies cost Gourmet dearly [AdAge]

Condé’s flagship Vogue, which is sticking to its tradition of putting its editors, including the imperial Anna Wintour, up at only the finest hotels.

According to sources, Wintour’s European entourage, which is usually about 10 people including her creative director, fashion director, several top stylists, European market editor, beauty editor and Publisher Tom Florio, is estimated to cost the company close to $250,000 in travel expenses.

A source said Wintour stays at the Ritz Hotel in Paris, while underlings are sent to the Crillon and the George V.

I know, I know it’s bad form, it’s bad business, it’s irresponsible, etc. But also, it’s sort of awesome that is Wintour refusing to give up her $30 pomme frites at the Ritz; at least she is living the life she’s attempting to sell us in the pages of Vogue. For the time being, anyway.

This morning, as we read Keith Kelly‘s media column in the New York Post and saw him use the phrase “Condé Nasty” for one of many times in the paper’s fine history, we found enlightenment. The paper has a distinct, reliable sound to it. Whenever there’s a mayor involved, you know he’s going to be called “hizzoner,” even though that sounds like a Yiddish word for a cantor and/or from the nineteenth century. For these reasons, and more, we’ve come up with an English-New York Post Translator. Behold:

Keith Kelly

Kelly reports:

Fashion magazines, which last week released their ad tallies for the all-important September issues, are having a very tough year as high-end luxury advertisers and retailers sharply cut back on ad spending amid the recession.

Through the August issue, Elle was down 20 percent to 1,099.5 ad pages, according to Media Industry Newsletter, giving it a brief lead over industry standard Vogue for the first eight months of 2009. However, Vogue, with 427 ad pages in September, passed Elle to regain the lead. Through September, Vogue has about 1,476 pages, compared with Elle’s 1,428, according to preliminary estimates.

Still, the fact that the race is thisclose is a boon to Elle and its editor-in-chief, Robbie Myers, since the magazine has never come close to beating the segment leader, which is led by Anna Wintour.

If rumors are true, why would Hachette want to sell off a profitable magazine that is on its way up? Perhaps because it’s one of the few titles of value that that they can use for liquidation. Publishing companies are looking to acquire magazines that make money, a rare breed in this current economic climate.

Many consider the selling off of successful title to be a drastic action for a publishing company in need of cash – something we could be seeing much more of in the future. Will Time Inc. look to sell InStyle? Will Conde Nast sell Glamour? If so, who will buy them? Bruce Wasserstein can only purchase so many titles.

The re-design is apparently in response to a severe decline in revenue — the same article mentions that ad pages for the first half of 2009 have been down a whopping 39%.  Maybe it IS the art and layout that are keeping the advertisers away. Kelly also reports that Fortune ME Andy Serwer is not involved and quotes an unnamed source as saying “I don’t think it’s a happy situation.”

John Korpics will helm the re-design, a name that is almost synonymous with re-designing titles at Time Inc. After leaving InStyle, Korpics re-imagined Entertainment Weekly, then Money magazine – two titles whose total pages have not increased since getting a new look. A well-respected design director, Korpics has long been considered “one of Huey’s boys” by industry insiders. A senior editor at a major national magazine said of Korpics “Martha Nelson fired him from InStyle and Huey keeps looking after him.”

The notion of Huey taking care of his own is not lost on many – back in 2002 he created a bit of stir by removing Jim Seymour as Managing Editor of EW at the height of its success. In that spot he placed Rick Tetzeli, a trusted Huey ally and former deputy from his days of Fortune. Tetzeli stepped down from that spot earlier this year, getting “kicked upstairs” to run “special projects” for Time Inc.  Rumors of EW folding have only recently abated, perhaps due to the new leadership of new top man Jess Cagle.

Looking after his “boys” is not uncommon practice for Huey, as Kelly reports:

“To assuage any potentially bruised egos, Huey in the past month awarded Serwer with a new three-year contract, insiders said, which will keep him on the payroll until at least 2012.”

An industry insider who no longer works in magazine publishing said “What they’re doing with Andy is exactly what they did with Rick. Give him a contract to be nice, and let him work on a redesign. He probably has no idea if he’ll be fired.” The fact that Serwer was quoted by Kelly appears to support the idea that he is “playing nice” and still a company man. Serwer did play a touch of defense, admitting that he’s entertaining offers outside the magazine world.

Huey’s power at Time Inc. has been diluted recently, when a management restructuring redistributed the titles that he directly oversees.  Nelson, the highly respected former ME of People now oversees the very profitable “People Group” (made up of EW, People and InStyle). Bill Shapiro oversees the lifestyle group (various shelter titles including Real Simple) and Huey has the News group (Time, Fortune, Sports Illustrated.) Shapiro and Nelson still technically report to Huey, but a former Time Inc staffer says “Martha has all the power now – she’s the only one with succesful magazines.”

Apart from the real success of Real Simple, InStyle and People, the once august publisher founded by Henry Luce has recently lost a lot of value in the eyes of Wall Street. And while rumors of a spin-off from the Time Warner mothership persist, Huey continues to avoid direct criticism. A recent BusinessWeek column by Jon Fine posited the Time Inc problem’s thusly:

“The current environment for selling all of Time Inc. is terrible. And before you sell, you’d want to know how much of the current bad news comes from a temporary ad downturn and how much comes from permanent structural change in the media world.”

A germane concept, but curiously absent is any notion of questionable (bad?) management decisions. The page counts of former industry stalwarts like Time, Fortune and Sports Illustrated are pamphlet-esque. Is the Time empire burning? If so, why is no one pointing out that Emperor Huey has no clothes? A Google News search for “John Huey” reveals only corporate press releases, passing mentions or glowing reviews.

A number of insiders suggest that the real reason John Huey has gotten a pass from the media is that he’s a notorious leak to the press. No reporter wants to anger him for fear of losing a generous source. A 2006 New York Magazine profile written by Kurt Andersen is titled “The Good Old Boy of Time Inc.”

The Time Inc. ship has brought on a lot of water under the helm of Huey, and no one seems to be willing to report that the Titanic is sinking. Perhaps the old boy network extends beyond the hallowed halls of Time Inc.

UPDATE – Keith Kelly reports today that John Korpics has been named Creative Director to Fortune, replacing outgoing Design Director Robert Perino.

(Disclosure – my wife Geraldine Hessler worked under John Korpics in the Entertainment Weekly Art Department from ’98 to 00, then replaced him as Design Director, a title she held until 2008.)