Did Gourmet Die Because Si Newhouse Doesn’t Like To Cook?

The Monday morning Gourmet quarterbacking continues a full week after Condé Nast decided to shutter the much-loved foodie mag along with three others. Now that the initial dust has settled from the first round and the much of the magazine world is waiting for the second shoe to drop, a number of folks are taking a peak behind the curtain at the wizard himself. It ain’t pretty.

Last week Newsweek speculated that Condé could see a $1 billion ad revenue drop in 2009. Today Keith Kelly at the New York Post is speculating the Newhouse family may be filling the money gap out of its own (very deep) pockets.

For the first time in nearly two decades, the Newhouse family is personally having to underwrite the losses at Condé Nast, a source told The Post. It’s one of the reasons for the intense cost-cutting at the glitzy — and historically profligate — magazine publisher run by billionaire Chairman S.I. Newhouse Jr.

“It’s not just Si now,” said the source, who is close to Condé Nast. “It’s the family trust…”Si hates to lose money, and Si hates to lose money that he wasn’t planning to spend.”

Some industry observers predict losses at Condé Nast may hit $200 million this year, as the company is reeling from an advertising-revenue shortfall of more than $400 million. Newhouse having to dip into his own pockets to keep Condé Nast going comes at a time when his personal fortune has declined by about 50 percent in a year to just over $4 billion, according to Forbes.

Sheds a bit of a new light on things, doesn’t it? If you were floating a stable of magazines out of your own pocket you might be more inclined to let personal preference influence your decision-making. It’s long been rumored that Si has a soft spot for the New Yorker and in fact it was the only magazine at Condé to be spared the McKinsey interrogation (though as we’ve pointed out before, there are a number of reasons it may have qualified for this exemption). So it is just that Si doesn’t like to cook? Probably the decision-making process was slightly more complicated than that, though AdAge thinks Si’s personal approach to magazines has been a destructive force.

But [Gourmet‘s] owner, Condé Nast, the high church of glossy magazine publishers, has also maintained a steady magazine-rather-than-brand approach over the years that has increased its exposure to the recession and narrowed the range of possible responses. Quickly-changing conditions outside Condé’s soaring headquarters are extracting a price for that loyalty — and Gourmet, the first of the company’s crown jewels to fail, probably paid a portion of the cost.

Why didn’t Condé try harder to save Gourmet, perhaps by changing its business model? …Condé, which declined to comment for this article, may have modeled such possibilities and decided they wouldn’t work, or at least weren’t worth the effort. Yet observers feel that the frame for any such analysis is still set by the company chairman, S.I. Newhouse Jr., who remains true to a pair of longtime loves: gorgeous editorial products and ad pages to pay for them. He seems considerably less interested in digital revenue streams, subscription-based models, direct-to-consumer retail or even cross-platform media offerings.

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