Make Money

G+J: Spending Money To Make Money

September 2nd, 2007 by monies

If there’s some measure of quiet or not-so-quiet desperation in many consumer marketing departments these days, you couldn’t prove it by G+J USA Publishing. In those Manhattan offices, everything seems to be coming up Rosie–and not just because of the initial success of that much-publicized reincarnation of Mc Call’s.

What’s the “secret” behind what appears to be genuinely high morale in the G+J quarters? In a word, change. Not so much in the consumer marketing staff–”There were a lot of really great people here” before Dan Brewster took over as president and CEO in May 2000, says senior VP, consumer marketing Diane Potter–hut in the top management ranks, the organizational structure and the general vibe.

Potter, a veteran of Time Inc., Times Mirror and American Express Publishing who was quickly recruited to G+J by Brewster, her former Amex boss, isn’t claiming that G+J is immune to the industry’s current circulation challenges. But she’s clearly energized by being charged with re-evaluating virtually everything that circulation touches-and being given the testing budgets and other resources needed to actually make the needle jump.

“What’s great about being here is the pace and the energy flow,” she says. “We’ve got an almost entirely new roster of top executives, and our target is very clear: To double the size of the company within the next five years. There’s a real sense of moving to a new place. A lot of that excitement has to do with the enormous focus we’ve put on revitalizing the editorial products during the past year. It’s happening–you can pick up just about any of our magazines and see a real change from month to month. Plus, Dan’s management style is to empower those to whom he’s given responsibility. And there’s nothing more exciting than that.”

Potter, who holds a masters degree in business administration from Harvard, isn’t given to hyperbole. Along with its management team, G+J’s product stable has indeed been reworked from top to bottom since Brewster’s arrival.

In addition to joint-venturing with Rosie O’Donnell to revive the moribund McCall’s, the company has redesigned and editorially repositioned four titles–YM, Fitness, Homestyle and Child-and updated the look of another, Family Circle. It acquired its first two business titles, Inc and Fast Company, from Mortimer Zuckerman for a reported $542 million-a move that’s been Monday-morning-quarterbacked due to the subsequent economic downturn, but which Brewster views as a long-term investment in diversifying to even out cyclical market ad swings. G+J also acquired subscribers from three folding titles. Jump’s 400,000 subscribers were folded into YM (which has a 2.2-million rate base), and subscriber segments from Dads and Home Office Computing were added, respectively, to the Parents’ file (2.125-million rate base) and the Inc file (650,000 rate base).

Then there’s the newly formed launch-incubation program–certainly an ambitious undertaking, although perhaps not ideally timed. (The company recently back-burnered its first two launch ideas. Friday, a lifestyle title for women in their 20’s to early 40’s, was shelved after what was described as an “inconclusive” one-million-piece direct mail test last December, and a planned March direct mail test for the self-explanatory Real People was canceled.)

To be sure, there are significant hurdles in the path of Brewster’s determination to push G+J from sixth place among the nation’s consumer publishing players to fifth or fourth. The division’s previous CEOs have run up against management philosophy differences with German parent Bertelsmann AG. And several G+J titles are struggling on the advertising front Ad pages for Fast Company and Inc dropped by nearly 60 percent and 50 percent, respectively, in this year’s first half; Homestyle and Family Circle suffered 20-percent page losses; and Parents’ pages declined by 14 percent.

On the other hand, even in a dismal advertising climate, ad pages at YM and Fitness leapt by 40 percent and 28 percent, respectively, during the period, and Child saw 4-percent growth. Rosie’s first two issues in May and June surpassed McCall’s’ ad page performance for the same issues last year by 25 percent, though growth stalled on the July and August issues.

Author: Array

Posted in Uncategorized | No Comments »

Not only Posh but with the money to make it work

September 1st, 2007 by monies

Imagine Niall Quinn on speed and you get an impression of this businessman, who moved to Spain as a teenager with his parents, Austin and Elizabeth, after the retirement of his father, who had run nightclubs and restaurants in Dublin.

Today, at 30 years old, he is the youngest chairman in the Premiership or Football League. Early this year, he made Darren Ferguson, son of Sir Alex, one of the youngest managers in the game. Suddenly the club are dominated by youthful endeavour. But can they flourish?

MacAnthony would respond by suggesting you scrutinise his portfolio. He started up MRI (MacAnthony Reality International) seven years ago with [euro]6,000 ([pound]4,000). Today, the company sell over [euro]2 billion of property a year. “Rome wasn’t built in a day, but I always say that if I’d been involved I could have done it in two,” says the businessman who owns properties in Sunningdale, Spain, Florida and Switzerland, mocking his own pace of thought and deed.

None of which explains why this Liverpool fan decided last summer to buy League Two Peterborough, a club who, since their formation in 1960, have bobbed between the old Fourth Division and what is now League One, with only Barry Fry’s presence, in various roles - currently director of football - daubing some colour on to an unexceptional tapestry. He claims that Reading and Wigan are his blueprints for success, unfashionable clubs who have been elevated to the Premiership. “[Dave] Whelan and [John] Madejski have shown it can be done, and how to do it without spending stupid money,” he says. But, you interrupt, their hearts are in their local areas. You are an occasional visitor from Spain, with a UK home in Sunningdale. “I just wanted to buy a football club,” he retorts. “I wanted to support that club, and come over and have a release from my day-to- day work. You have to appreciate that I’m always in a hurry. So, I said to my advisers, ‘Go find me a club’, because you don’t normally find them advertised in the newspaper, do you?”

“I did look at a couple of other clubs, but then a friend of mine who was looking for me met someone who knew Barry Fry. There was a programme on TV the following night on the club, involving Big Ron [Atkinson], and I thought, ‘OK, it looks good’. The following week we tied up a deal. It gives me a rush every day, just being involved. It may be League Two, but there was opportunity and possibility. In the next three years, there’ll be an extra 300,000 people in and around this town to boost attendances.”

On his website, MacAnthony lists his personal rules. One is: never be afraid to take risks. He can certainly be said to have followed his own principles with the appointment of the former Manchester United, Wolves and Wrexham midfielder Ferguson as player- manager successor to Keith Alexander in late January.

“We had over 100 applicants, and there were a couple of managers with plenty of experience, but they didn’t ask me about the players, or the club, or the future,” he says. “All they wanted to discuss was the bottom line for them, including cuts of commissions on player-transfer fees.

“I don’t want to discuss that. I wanted someone to excite me about the prospects for the next five years. Darren Ferguson was the only one who asked to see videos of our previous 10 games. Sure, he’s a rookie, but I’m a good judge of character, and I liked what I saw and heard.”

Nevertheless, being the son of the godfather of football management brings both the benefits of connection and the stresses of expectation. “I do think he’s under more pressure than he should be because of who he is,” says MacAnthony. “It’s tough following your father. But he’s his own man, and wants to do his own thing here. For a 35-year-old guy, he’s years ahead of himself. He was ready to step into management. I think he’s going to be a brilliant manager for this club.”

Author: Nick Townsend CHIEF SPORTS WRITER

Posted in Uncategorized | No Comments »

Premier League out to make money

September 1st, 2007 by monies

Just a week after officially taking over at West Ham, Icelandic businessman Eggert Magnusson dismissed Alan Pardew on Monday.

Pardew is the latest victim of a scramble by foreign investors to make money out of a league which is becoming richer year after year.

His departure came two days after a 4-0 loss at Bolton left the Hammers in the relegation zone instead of chasing honors at the other end of the standings. West Ham, last season’s FA Cup runner- up, is already out of the UEFA and League Cup competitions.

That wasn’t what Magnusson envisioned when his consortium bought the east London club for $166 million three weeks ago.

“My aim is to take the club to the next level — challenging for the highest honors and every year competing for a place in the Champions League. But I realize it will take time. It will not happen tomorrow,” Magnusson said then.

More like the day after tomorrow.

Domestic television rights deals worth $3.4 billion already guarantee that millions will be headed for Premier League clubs over the next three years. There are reports that a contract for overseas rights will push that figure well past $3.9 billion.

It’s that sort of income that’s attracting foreign investors like Magnusson.

A multimillionaire, Magnusson has joined Chelsea’s Roman Abramovich, Manchester United’s Malcolm Glazer, Aston Villa’s Randy Lerner, Portsmouth’s Alexandre Gaydamak and Fulham’s Mohamed Al- Fayed as foreign owners of Premier League clubs.

Liverpool is being targeted by a wealthy consortium led by Sheik Mohammed bin Rashid al-Maktoum, the ruler of Dubai. If that goes through, a third of the Premiership clubs will be in foreign hands.

Traditionalists don’t like the trend because they feel that people who have no feeling for the history of English soccer will be treating their clubs like commodities, and coaches’ jobs will be even more at risk than usual. While the Glazers have no reason to end Alex Ferguson’s hugely successful 20-year stint at Manchester United, Pardew was on thinner ice at West Ham.

A week ago, Magnusson said the manager appeared to be the right man to lift the Hammers out of their slump.

“I’ve been impressed with Alan Pardew,” he said after the Dec. 3 2-0 loss at Everton. “I’m not worried about relegation. The manager and the players are far too good for that. I have full trust in Alan as manager. He is a very important part of this club.”

Not any more.

John Barnwell, chief executive of the League Managers’ Association, said Magnusson should have given Pardew more time.

“I’m never surprised in the position I’m in at some of the almost bizarre dismissals but this one, the timing of it, has come as a surprise,” Barnwell said. “New owners will have new agendas and new ideas, one accepts that, but they seem to have acted with great haste and that did surprised me.”

Barnwell said Pardew was a victim of the new pressures gripping the English game as a result of the foreign investments.

“Alan raised the standards to a very high level last year and had possibly become the victim of his own success,” he said. “That success was expected to be built upon, but things outside of his control seemed to take over the football club with talk of new owners and the bringing in of two foreign players possibly not at his request and it seemed to destabilize everything at that football club.”

Before Magnusson’s consortium bought the club, West Ham signed Argentina stars Carlos Tevez and Javier Mascherano, two players who could have gone to richer, higher profile clubs such as Chelsea or Barcelona. The deal was done with the company which owned their contracts and was linked to a rival takeover bid which lost out to Magnusson.

“What’s become obvious with all this foreign investment is that business people have realized that you can actually make money out of the Premiership,” Barnwell said. “Just to be in it next season will be a starting price of $68.25 million.

“If you suddenly find that in jeopardy and you’re investing money into that you’re doing something rather quickly. Unfortunately that intensity has increased.”

On the field, Glazer’s Manchester United has opened an eight- point lead over Abramovich’s Chelsea, with Gaydamak’s Portsmouth and Liverpool another eight points back in third and fourth place.

That’s where Magnusson wants West Ham to be. After a week at the club, he decided Pardew wasn’t the man to do it after all.

Author: Robert Millward Associated Press

Posted in Uncategorized | No Comments »

The Motley Fool: Inform, amuse and help you make money

September 1st, 2007 by monies

What’s makes mortgage interest go up and down?

R.W., Norwich, Conn.

Interest rates are influenced by inflation and the market for debt (notes, bills, bonds, etc.). With inflation relatively low in recent years, we’ve enjoyed low interest rates. But when the economy appears to be growing too briskly, which can spur inflation, the Federal Reserve (led by Alan Greenspan’s successor, Ben Bernanke) may hike short-term interest rates via the “federal funds” rate. That’s the rate a bank can charge another bank for use of its excess money. When the economy is sluggish, the Fed might cut rates to boost American enterprise. Lower rates give companies and people (including home-shoppers) an incentive to borrow money.

The Fed can also change the “discount rate” — the rate paid by a bank to borrow short-term funds from the Fed. The prime rate and other interest rates are based primarily on these two interest rates, while mortgage rates are linked to Treasury bill rates. The money markets themselves (basic supply and demand for money) also exert great influence over interest rates.

If I sell a stock for a loss in my IRA account, ca I deduct that loss on my personal tax return?

-R.Y., Lawrence, Kan.

Nope. You typically deposit pre-tax money into a traditional IRA. Eventually, you’ll be taxed on your entire withdrawals from it, regardless of any gains or losses. (Of course, if you make non- deductible contributions to your traditional IRA, they won’t be taxed when you take them in the form of distributions.) With Roth IRAs, you invest post-tax money and eventually withdraw it all tax- free. But you don’t claim losses (or pay taxes on gains) in the interim.

THE MOTLEY FOOL’S TAKE

NO ZZZ’S FOR ZUMIEZ

RETAIL: IT’S HOT, BUT PROCEED WITH CAUTION

High-growth board sports retailer Zumiez (Nasdaq: ZUMZ) may not be invincible (its shares wiped out at one point last year when it couldn’t keep up with investors’ high expectations), but its recent fourth-quarter earnings release drove shares to a new 52-week high.

The company reported net profit up 67 percent over year-ago levels and sales up 49 percent. Cash and short-term investments rose 21 percent, with free cash flow rising by 56 percent. Zumiez also offered an outlook for 2007 above analysts’ expectations.

Among the elements at work for Zumiez is its acquisition of Fast Forward stores last June. According to its management’s conference call, all the Fast Forward stores now have in-store Zumiez branding, and almost all have been refurbished to allow for greater capacity. Outside signage on the stores should bear the Zumiez name by the end of this year.

Zumiez expects impressive 30 percent growth, and factors like that explain the premium valuation attached to the shares. It recently traded at a price-to-earnings ratio of 54. While you may like Zumiez as a company and a concept, and you may respect its strong growth, hold your horses. You may well end up with a more appealing stock

FOOL’S SCHOOL

MULTIPLE GROWTH

Imagine you’re researching PomPoms.com (ticker: RAHHH), an online cheerleading supply firm, and you read that “it deserves to trade at 24 times earnings, or about $56 today.” You’re flummoxed. The concepts involved are simple and valuable, though, so let’s clear them up.

The word “multiple” usually refers to a company’s price-to- earnings, or P/E, ratio, which is its current stock price divided by its last 12 months of earnings per share. A company trading at $40 per share with an EPS of $2 has a P/E of 20. It is trading at “20 times earnings,” or at “a multiple of 20.”

It can be helpful to compare a company’s multiple with what seems to be a fair multiple, given its industry and competitive position. Let’s say that PomPoms.com’s peers all have multiples in the high 20s and its own multiple is in the mid-teens. A low multiple can be promising, suggesting that the stock is undervalued and that the price will increase as the multiple catches up to its peers.

Also auspicious are briskly growing earnings. Earnings growth drives stock price growth. Rapid growth can sometimes justify a relatively high multiple. How fast earnings grow is also a good indicator of how high a company’s P/E should be.

Expected earnings growth coupled with multiple growth can offer a powerful one-two punch. (Warning: numbers ahead!) Imagine a stock trading at $30 per share — 10 times its EPS of $3. As earnings grow, the stock price will likely increase, maintaining the multiple.

For example, when earnings are $5 per share, the stock price should be near $50. But if the multiple itself is also growing, the price is likely to increase even more. If a reasonable multiple is more like 15 and the earnings are $5 per share, the stock should eventually approach $75 per share.

MY DUMBEST INVESTMENT

GOOD FRIEND, BAD INVESTOR

Author: Array

Posted in Uncategorized | No Comments »

Categories

Archives

Meta:

Blogroll

Recent Posts

Search

G+J: Spending Money To Make Money

Not only Posh but with the money to make it work

Premier League out to make money

The Motley Fool: Inform, amuse and help you make money