Masthead News Archives
September 2005

September 29, 2005
Gardening, childrens and telemarketing mags sold
TORONTO/MARKHAM/WINNIPEG—In three separate transactions announced this week, equity in Gardening Life, POP!, Powerplay, Whoa, The Grind and Contact Management has changed hands.

• On Monday, St. Joseph Media announced that it had acquired 100% ownership of Gardening Life. St. Joseph was a silent 50% partner in the glossy bimonthly; Lynda Reeves’ House & Home Media, which also publishes Canadian House & Home, ran the show. St. Joseph acquired its 50% stake in 2002 when it bought the assets of Key Media. Reeves launched Gardening Life in 1996. Rival Toronto Life Gardens (Key Media) launched around the same time and the two titles went to battle; the partnership was struck when Key agreed to fold Gardens. Five editorial staffers and one consumer marketing manager will relocate to St. Joseph’s offices, says Giorgina Bigioni, vice-president and group publisher of the Style Group, which will house the title.

• On Tuesday, Paton Publishing (POP!, Powerplay, Whoa, The Grind) announced that it had been acquired by Torstar’s tumescent community media division, Metroland Printing, Publishing and Distribution, which acquired Formula Publications in 2003 and in 2004 bought bimonthly paid-circ consumer glossy World of Wheels and monthly sister trade title Canadian Auto World from Simcoe, Ont.-based Annex Publishing & Printing. Paton claims to be Canada’s largest audited youth magazine publisher; Paton also creates in-school programs and has a custom publishing division.

• On Wednesday, Markham, Ont.-based Lloydmedia Inc., publisher of Direct Marketing News, acquired Contact Management from now-defunct August Communications, whose parent, Winnipeg-based PW Group, filed for bankruptcy protection earlier this year. The title, which ceased publishing due to August’s problems, was sent to 5,000 call centre managers, executives and suppliers across Canada. “This is an excellent publication in a market that needs to be kept informed and up to date,” said Lloydmedia president Steve Lloyd in a release. “Beyond its role in marketing, the contact centre is a dynamic and vital component in many corporations today, which Contact Management will continue to recognize and write about.”

September 27, 2005
Editor, art director gone at Cycle Canada
TORONTO—Bruce Reeve, the award-winning editor of Cycle Canada magazine, has quit and freelance art director Chris Knowles has been fired. Alluding to problems he encountered with the magazine’s new corporate owner, Brossard, Que.-based, LC Media, Reeve wrote in Cycle Canada’s online forum that “After 16 years as editor of Cycle Canada and nearly 24 years in total with the magazine, I have decided to resign. It wasn’t an easy decision to make as the magazine has been a big part of my life for so long. I don’t want to go into detail about my reasons for leaving, but I have been disappointed in some recent decisions by the LC Media owners, and finally I felt I had no choice but to resign.”
Reeve submitted his notice in late July; he met earlier this month with technical editor Costa Mouzouris (who succeeds him as editor) and feature editor Neil Graham to discuss transition issues. Chris Knowles, CC’s art director since he redesigned the monthly glossy in 1996, is based in Camden East, Ont.; LC Media decided to bring the art direction in-house. He was let go shortly before Reeve resigned. LC Media principal Jean Lemieux says the next issue of Cycle Canada, appearing next month, will sport a redesign with added emphasis on photography and an enlarged trim size.
LC Media acquired Cycle Canada last year, along with its French counterpart Moto Journal and other assets of Turbopress Inc., for an estimated $2.5 million.

September 22, 2005
Editorial control an issue at RedPoint
CALGARY—Alberta’s largest independent publisher has fired the editor of its flagship title, Avenue—Calgary’s biggest city magazine. Speaking from her home in Calgary yesterday, Avenue editor Janice Paskey, who was also RedPoint Media’s editorial director, says she was handed her walking papers on Tuesday. RedPoint has not been the picture of stability this year. Six months ago, Avenue founder and publisher Dan Bowman, who was also president of RedPoint, got squeezed out by business partner Don Graves in a humiliating powerplay. Paskey has been editor since September 2002, during which time the magazine has grown from about 64 to 172 pages in size, she says. “What I can say is that things were not the same for me since [Bowman] left the company,” she writes in an e-mail. “Our sales director [Tannis Biddell] was made associate publisher and given full authority and she wanted a new direction.” Paskey adds: “I was asked to produce an ‘uplifting, motivating and positive’ magazine. I fulfilled these requirements as I understood them, but it was never enough. I could have been Bonnie Fuller, Graydon Carter, Tina Brown and Lewis Lapham and it wouldn’t have been enough.” Paskey has retained legal representation. Avenue is a controlled-circ glossy that was voted best magazine in Alberta in 2003 “This was not to do with cause,” Paskey says. “It was a game of Survivor and I got voted off the island.” Biddell did not return a call yesterday.

September 20, 2005
Magazine wholesalers back in the distribution game
TORONTO—In a stunning move announced late last week, it was revealed that one of Canada’s largest magazine distributors, Coast To Coast Newsstand Services, has been acquired by a cartel of magazine wholesalers, including The News Group and Metro News. Here’s what it means.In effect, Coast to Coast has been purchased by its suppliers. Sources say the deal was a couple of months in the making. Rogers Publishing retains its stake in Coast to Coast, believed to be in the neighbourhood of 25%. What’s changed is that the two other principals, CEO Glenn Morgan and president Frank Auddino, have sold their shares to the following wholesalers: Jimmy Pattison’s The News Group, Metro News, Benjamin News of Montreal and Calgary’s News West. To get your head around the implications, it helps to understand that the path to the newsstand typically goes like this: publisher hires distributor who then must go through a wholesaler who has a lock on retail accounts, such as Chapters, HDS Retail and a variety of other newsstands, including supermarket and drug store racks. Traditionally, distributors have championed the interests of publishers to wholesalers. Now that this cartel of wholesalers doubles as many publishers’ distributor (Coast to Coast handles the bulk of Rogers’ and Transcontinental’s consumer titles), the supply chain has been reduced by one level.

It means that now you will have on the board of directors at Coast to Coast, Rogers Publishing CEO Brian Segal sitting alongside representatives of the wholesaler community. Segal, new to the board, takes over a seat formerly occupied by Mike Fox, Rogers’ senior vice-president of consumer marketing. “I call Brian our newsstand CEO. He’s become quite involved in the single-copy, newsstand side of things,” says Fox, “both in terms of attending the big conference every year that the MPA [Magazine Publishers of America] puts on and he’s certainly been, with our editors and so on, more engaged in trying to make sure that we’re responding to newsstand.” (Interesting to note that both Segal and Transcontinental Media president André Préfontaine have emphasized the growing importance of newsstand sales in the wake of escalating postal costs that have been eroding the profitability of subscriptions. Per unit of circulation, Fox says source evaluation reveals that newsstand sales, with their blow-in subscription cards, can be four times as profitable as traditional methods of generating subscribers, such as direct marketing efforts, which must cover the high cost of addressed ad mail associated with such mailings.)

So, with a publisher now having the ear of wholesalers, things look pretty good. At least for Rogers. Transcontinental’s director of newsstand sales, Tom Worsley, said the deal took him by surprise and that he’s going to “wait and see” what the implications are. Transcon switched from Curtis Circulation Co. to Coast to Coast in 2004.

Other distributors might not be so happy. Coast to Coast rival, Disticor Magazine Distribution Services, is based in Ajax, Ont. Will Disticor really bid aggressively on RFPs for Canadian titles that are, in effect, owned by the wholesalers whom Disticor supplies? Disticor CEO John Lafranier could not be reached for comment. Another party that may not be celebrating the deal is Curtis Circulation Co., the New Jersey-based distributor owned by publishing giant Hachette Filipacchi, which also owns retailer HDS Retail. The same wholesalers that purchased Coast to Coast also serve as suppliers to those Curtis titles that want space on Canadian newsstands; in effect, then, Curtis’s suppliers have, with this deal, become a potential rival to Curtis in the business of magazine distribution. At the moment, Coast to Coast represents mainly Canadian magazines, many of them high-volume titles such as Chatelaine and Canadian Living. Will Coast to Coast bid on future RFPs to represent high-volume (i.e., high-profit) foreign titles, currently represented by, say, Curtis? Coast to Coast CEO Glenn Morgan (who retains his job but not his stake in the company), could not be reached for comment. Frank Auddino, who is no longer an employee of Coast to Coast, could not be reached for comment and has, according to an automated e-mail response, taken a sabbatical until Jan. 2, 2006. Dennis Porti, executive vice-president, circulation, at Curtis, could not be reached for comment.

Dan Shapiro, CEO and president of NewsWest, said in an interview that the wholesalers will make capital investments in Coast to Coast’s information systems, but wouldn’t elaborate on the details. In a released statement, Morgan said, “The advent of an investment in our business by the wholesale community will allow Coast to Coast to further enhance our Canadian-made strategy with respect to our primary mandate of promoting Canadian publications and expanding sales opportunities across Canada.” In the same statement, Segal said he was “excited” to be working closely with wholesalers to achieve his company’s objectives and to making information and reporting systems “more effective” for “all publishers.”

Last summer, the same wholesalers who now own Coast to Coast, sold Gordon & Gotch, Canada’s largest distributor of specialty foreign and Canadian titles, in part, because the wholesalers’ involvement in distribution didn’t sit well with its clients, such as Curtis and HDS Retail, both of which are owned by Hachette.

September 15, 2005
Frank set to rise from the dead
OTTAWA—There will be no printing costs. There will be no paper costs. There will be no postage costs. But the spectre of costly libel suits will no doubt return after next week’s resurrection of Frank online. The guttersniping, gossip y, satirical biweekly that Michael Bate captained to infamy in the 1990s will make its comeback next Tuesday as a paid-access website at www.efrank.ca. For $9.95 a month, subscribers can get their fix of rumour and parody written by many of the old contributors who, Bate says, are “back in their harnesses.” Stickmen, bingo callers, fartcatchers, little shits, bootboys, shineboys, flunkies, braunnosers and obergruppenfuhers in the fields of politics, media, business and entertainment are hereby forewarned.

Bate sold Frank in 2003 to a number of anonymous Bay Street investors fronted by ex-Globe and Mail business columnist Fabrice Taylor. The magazine folded last fall following a disastrous reposition upmarket. (See News Archives, December 21, 2004.) The brand reverted to Bate.

The new online format will allow for some new features, such as breaking-news e-mail bulletins and Frank TV, which will feature spoofs on political advertisements; for example, look for a parody of an ad from Tory party leader Stephen Harper. Bate estimates a critical mass of 3,000 subscribers (or roughly $360,000 in circ revenue) will bring the operation to a break-even point. “We have several thousand names from old Frank subscription lists,” he says, adding that he’s harvested about 1,000 e-mail address from a “teaser” website that was discretely promoted earlier this summer. The new site will utilize Flash programming so that the content can’t be copied and pasted. Look for a Christmastime promotion including ads in The Globe and Mail. “[The ad campaign] is going to cost money but we do want to attract some attention to it,” Bate says.

September 13, 2005
Publishers “should have been aware” of PAP reductions
OTTAWA—Recent reductions in the federal postal subsidy ought to have come as no surprise, says the Department of Canadian Heritage. Gordon Platt, director general, publishing policy and programs with the Department of Canadian Heritage, said that “[b]ased on the Canada Post rate increases of 5% in January 2005 and 2.9% in January 2006 and in light of the reduced budget [from $49.4 million this year to $45.4 million next], publishers should have been aware that there would be adjustments in the percentage of postal costs we could fund.”

Platt was asked to comment on a recent Magazines Canada bulletin that expressed shock and dismay after DCH announced reductions in Publications Assistance Program funding levels effective Nov. 1 resulting in increased costs to publishers ranging from 7% to 35%. (See www.magazinescanada.ca/files/PAPchanges.pdf to see the new funding levels.) Magazines Canada warns that further funding reductions are likely to kick in next April 1, the beginning of DCH’s fiscal year.

In an urgent letter sent to DCH Minister Liza Frulla last week, Magazines Canada CEO Mark Jamison has requested an immediate meeting to explain that the Publications Assistance Program cannot sustain further erosion without undermining publishers’ ability to create content, hire freelancers and fend off foreign competitors. In the letter, Jamison strongly urged the minister to immediately invest $10 million into PAP, which he estimates will fall $8.3 million short next year due to increased draw on the program — a program whose budget is set to shrink by $4 million to $45.4 million in fiscal 2006-2007.

The new funding levels that come into effect on Nov. 1 will dramatically impact the country’s largest magazines. It’s estimated that Maclean’s alone faces a 35% funding cut equivalent to roughly $970,000 per year that it will now have to pay. The estimated figure for Chatelaine is $345,000; L’actualité will have to pay an estimated $148,000 more in postal costs as a result of reduced funding levels. Collectively, the industry will be paying millions more per year as a result of PAP reductions. PAP used to have a budget of approximately $200 million 15 years ago when controlled-circ titles were eligible.

September 9, 2005
Rogers fires Glow’s top two creatives
TORONTO—It’s been a tough month so far for Rogers Publishing. Last week, the editor of its biggest magazine (Chatelaine) resigned and publicly remonstrated her publisher for alleged editorial interference. Now, Rogers has fired both the editor and art director at sister title Glow, the company’s second-biggest magazine with a controlled circ of 428,000, published for Shoppers Drug Mart Optimum cardholders. Glow associate publisher Kelly Whitelock Latimer today confirmed that both editor Nancy LePatourel and art director Alan Belcher were “let go” yesterday. No word yet as to why. LePatourel, formerly editor of women’s extreme fitness mag Oxygen, was hired just 18 months ago. Neither LePatourel nor Belcher could be reached for comment. Ad revenue at Glow was up 15.8% last year to $10.9 million, according to LNA Canada.

September 8, 2005
Freelancers caught in Walrus cash crunch
TORONTO—Money’s tight at The Walrus these days. Publisher and editor Ken Alexander confirms the magazine has been tardy in compensating a number of freelance writers who’ve yet to be paid. “We’re late in many instances for two reasons,” he said in an interview yesterday.
“Our ad revenue is late in coming in and we’re battling with the feds over charitable status.” The Walrus Foundation, which owns The Walrus, has been involved in a lengthy application process to become a registered charity, a designation accorded by the Canada Revenue Agency. Once that status is obtained, money can flow in from The Chawkers Foundation, a charitable organization established by Alexander’s father, Charles. “Until we get this matter sorted out, we are begging people’s indulgence, asking them to wait 30 to 60 days after publication [to get paid], but this is a temporary situation.”

Several writers hope so. Many declined to speak on the record about their particulars. “I think writers need to make their needs known,” said one freelancer, speaking on a not-for-attribution basis. One freelancer who counts The Walrus as a client is David Hayes. “I’d really like to be clearly on the record as saying I support The Walrus, because that’s true. I really do admire what Ken’s tried to do. I know it’s hard. I want it to work and I believe in this kind of a magazine. But as a full-time freelance writer who depends entirely on his income from freelance writing, I have to know that I’m going to be paid at the appropriate time,” which he suggests is upon acceptance, not one to two months after publication.

The Walrus is an ambitious general-interest glossy modeled on Harper’s magazine and serves as one of the few mainstream forums for long-form journalism in Canada. Since launching it in September 2003, Alexander has made good on a promise to pay top writers more than the $1-per-word rate at which they’ve been stuck for decades, but the current cash crunch is eating into some of the goodwill earned. Asked how it is that he and others seem to be getting paid but not the writers, associate publisher Bernard Schiff points out that in fact he’s not getting paid, nor is Alexander. “I’m here courtesy of the University of Toronto pension fund,” says the retired Schiff, a former U of T psychiatry professor. Alexander says he’s personally loaned The Walrus Foundation $2.5 million so far.

The bid for charity status is key. There’s speculation that the reason Ottawa has been slow deal with The Walrus’s application is that it could set a precedent and prompt other magazine publishers to do the same thing. Currrently, This Magazine, Canadian Art and Canadian Geographic and The Beaver are all part of registered charities; prospective charitable publishers must demonstrate a strong public education element and contribute to elevating the level of public discourse.

Schiff and Alexander are very optimistic after meeting with CRA Minister John McCallum last week. They're both set to meet with McCallum's chief bureaucrat, CRA Commissioner Michel Dorais, next week.

Meanwhile, Alexander promises that “everybody is going to be paid. They have my personal guarantee.”

September 6, 2005
Best (and worst) newsstand performers
TORONTO—Preliminary circulation data for the six months ending June were recently released by the Audit Bureau of Circulations, and Transcontinental Media’s Canadian Home Workshop leads the way with a 36.5% gain in unit sales. Rounding out the top-five gainers are: Canadian Home & Country (33.2%), Canadian Living (16%), L’actualité (14.3%) and Gardening Life (12.1%). Leading the pack of worst performers on the newsstand in the first six months of this year was, understandably, The Hockey News (-55%), whose fortunes should now improve following the end of the NHL lockout; Capital Santé (-43.2%), revue commerce (-42.5%), Maclean’s (-29%) and Decormag (-26.8%). These results are based on the publishers’ statements, which have yet to be formally audited.

September 1, 2005
Chatelaine editor resigns, declines to be “hand puppet”
TORONTO—Just nine months after she was hired as editor-in-chief of Chatelaine, Kim Pittaway resigned suddenly this week, leaving Canada’s second-largest paid-circ magazine (645,000) without an editor. “It’s a situation that’s been building for some time. I think the people that know me, know that I wouldn’t make a decision like this without considering long and hard what the alternatives and options are.” Pittaway began freelancing for the magazine in 1994 and was appointed managing editor in 2001 by Rona Maynard, who handpicked the Moncton native to succeed her as editor-in-chief last December. Pittaway says she resigned on principle, claiming that her editorial autonomy had been undermined by publisher Kerry Mitchell, who came to Chatelaine a year ago this month via Rogers’ sister title Profit. Pittaway says the matter “culminated in an e-mail [earlier this month] from Kerry with some very specific discussion about what should happen on the page. We had a further discussion at that point and I asked for some clarification about which of these decisions were the editor’s decision and which were a publisher’s decision, and the answer made it clear that she considered those to be a publisher’s decision and, you know, from my perspective they were clearly an editor’s decision and, you know, I’ve been a managing editor before and I don’t want to be a managing editor with an editor’s title.”

The exchange occurred prior to Pittaway’s two-week holiday, which commenced Aug. 15. During that time, she decided upon her resignation and tendered it when she returned at the beginning of this week. “I offered to leave immediately, knowing that hanging around for a couple of weeks was going to make it difficult for everybody. There was no discussion about severance because I resigned. What it really came down to was that I needed to be an editor and I wasn’t going to be a hand puppet,” she said yesterday. In the July issue of Chatelaine, the magazine ran an editorial feature sponsored by The Home Depot in which the retailer’s logo was reproduced alongside the editorial—a clear violation of the Canadian Society of Magazine Editors guidelines designed to maintain a rigorous separation between editorial and advertising pages. So, was the church-state wall a bone of contention between Pittaway and Mitchell? “It was one of the issues,” Pittaway says. “It was not the only issue. And in fact it wasn’t the issue over which the disagreement culminated. But, you know, I’m not naïve about the world we live in, where advertisers are pushing harder and harder. I think the challenge in opening that door wider and wider is that that can only work when the editor is in a position to veto, because if the editor doesn’t have as much strength in that relationship that the publisher has, then I don’t care how ethical a publisher you have, that publisher is still subject to that heavy push from the advertisers and there needs to be somebody at the table whose only priority is the readers. And I think that person needs to be the editor.”

Mitchell says she was taken aback by Pittaway’s resignation. “Kim’s decision to resign came as a complete surprise. She did not express any concerns until the end of her relationship with Chatelaine. We’ve worked closely together and I’m surprised that she was unable to voice any concerns she may have had,” she wrote in an e-mail response yesterday. “Chatelaine has done some innovative stuff with clients but we’re committed to full transparency with our readers. Nothing has appeared in the pages of Chatelaine or on our site that has not had the full blessing and involvement of Kim in her role as editor-in-chief so, again, her comments come as a surprise. I have a great deal of respect for Kim. She has done great work in her role as editor-in-chief and the editorial team at Chatelaine will continue to build upon it. I am surprised by her decision and her comments but I wish her very well.”

The search, says Mitchell, is on for Pittaway’s successor.

“The thing that I feel crummiest about,” says Pittaway, “is that I know this is causing a huge work burden on the team that I put together there…I know that it’s gonna be a challenge for them but I know they’ll figure it out.” In the meantime, “Chatelaine’s capable and experienced executive editor Beth Hitchcock will manage Chatelaine editorial until a new editor-in-chief is announced,” wrote Mitchell in an e-mail to staff.

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