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BIG MAG TITLES BECOME VICTIMS OF WHOLESALER STANDOFF

CHAOS from the ongoing maga zine wholesaler war has officially arrived, and it looks likely that many celebrity weeklies won't be heading to many local Wal-Marts this week.

Wal-Mart, the single-biggest magazine retailer in the country, will be without copies of People, Sports Illustrated and Time. They will also not have Bauer Publications' In Touch and Life & Style, and American Media-owned Star and National Enquirer.

While it's too early to know how many of Wal-Mart's 4,200 US stores will be affected, it appears a majority of them will be.

A Wal-Mart spokeswoman confirmed that some stores are expected to be without magazines this week, but did not offer specifics on the titles or how many stores will be affected.

At the heart of the mess is a standoff between magazine publishers and two of the country's largest wholesalers, Anderson News and Source Interlink Cos., both of which on Sunday began imposing a 7-cent surcharge on every copy they deliver to retailers.

Both Time Inc. and Bauer said they won't pay the surcharge.

"You basically have the whole industry in a standoff," said one publishing executive.

Anderson News delivers magazines to more than 2,300 Wal-Marts, while Source delivers to an estimated 700 Wal-Marts.

The only celebrity weeklies that appeared likely to land on their shelves by presstime were Us Weekly, owned by Wenner Media, and OK!, owned by Northern + Shell.

There are four big national wholesalers: Anderson News, which is run by Charles Anderson; Source Interlink, which is controlled by billionaire Ron Burkle; News Group, owned by Jimmy Pattison; and Hudson News, which is owned by Jimmy Cohen. The latter two companies indicated they wouldn't impose the hike.

Late Monday, Curtis Circulation, the national distributor for American Media's Star and National Enquirer, said it would not ship any copies to Anderson News and Source Interlink, join ing Time Inc. and Bauer in telling the two wholesalers to take a hike.

Wal-Mart had said late last week that it was standing firm be hind Anderson News and Source Interlink. But there may be some behind-the-scenes negotiations taking place to minimize the impact.

"There will be some Band-Aids and some blood, but it will all probably calm down in about a month," said one source.

A Time Inc. spokesperson insisted that it is working toward a solution. "We're feeling quite good about the network of wholesalers we've pulled together."

Afar and wide

Greg Sullivan made a small fortune when he sold National Sports Games, the Phoenix-based basketball-arcade company that he founded, to Skee-Ball Inc. in 1994.

Then he landed as the president and CEO of the Ugly Duckling Rent A Car chain in 1995, turning a three-car dealership that rented clunkers into a powerhouse that by 2006, when he sold his 10 percent stake, had sales of more than $1 billion.

Now the non-practicing lawyer is hoping to enter the media business with Afar magazine and a related Web site aimed at what he calls the "experiential traveler."

On the surface, his company, Afar Media, would appear to have no chance in this economic climate.

After all, American Express Publishing recently laid off 33 people in part because Travel & Leisure's ads fell 7 percent last year to 1,481 and the prospects are bleak for the rest of 2009.

"It's a tough time for all magazines and travel magazines are not immune, luxury notwithstanding," said industry consultant Martin Walker.

But Sullivan is undaunted.

"I can see magazines are having a tough time, but I don't think they'll die," he said. "I think niche magazines will survive and thrive if they have a well- defined niche."

He claims he has $10 million of his own money and no outside financing that he is ready to plow into the project. He aims to keep it small, starting with a 50,000 circulation, moving to 100,000 and eventually topping out at 300,000.


"He certainly has chutzpah," said Mark Parker at Ad Media Partners, a merger-and-acquisition firm that specializes in magazines, "but I wonder if $10 million will be enough."

Sullivan concedes he's a publishing novice, but insists he has had some success in other completely unrelated businesses.

"All my businesses did their best in tough times," said Sullivan.

He and co- founder Joe Diaz, a former teacher, said they think the magazine will click.

"Nobody says they think they need another travel magazine, but Henry Ford said if he gave people what they wanted he'd have built a faster horse," said Diaz.

They plan two issues in 2009 and hope to go six times in 2010.

A 700,000 direct mail drop is planned for June.

The first issue is slated for August, the next for November and then publishing six times in 2010.

Several publishing pio neers from San Francisco are on board, including John Sheehy, who is the president and publisher, and Susan West, who was most recently an executive editor at Smithsonian.

Shutdown

Doubledown Media, publisher of Trader Monthly, Corporate Leader and for a time an ill- fated business partner with former pro-baseball player Lenny Dykstra, has shut down.

Insiders said that the company failed to deliver all the copies of the November/ De cember issue of Trader Monthly, and that media en trepreneur James Dunning refused to put any more money into the troubled company after kicking in more than $4 million when Magnus Greaves balked at making more investments.

It had recently lost a $1.25 million arbitration decision to Private Air founder Dee Dee Morrison and a last-minute deal to sell future receivables to Tarrytown, NY-based Keltic Financial apparently collapsed. keith.kelly@nypost.com

i'd scared shitless if my product wasn't getting to the #1 retailer in the world. it's not like folks are gonna go out and try to find a People magazine. i'm surprised people still buy mags--most people just read them while they wait in line

Fury said:

Amen these type of publications are nothing more than impulse buys anyway, trust me people aren't going to stop going to Wal Mart cause they don't have the latest issue of People or Time.

Most people who love the magazines listed most likely already subscribe. This will effect the sales much more than Wal Mart's bottom line.
[Edited 2/4/09 9:48am]

Source Interlink also ships all US Magazines over 2 the UK for Borders Bookstores!! I hope that doesnt mean that we wont b getting any US Magazines over here anymore!!!! People, Entertainment Weekly, Redbook, Ladies Home Journal, Good Housekeeping plus a lot of other US magazines are my only link 2 the USA, whenever I am over in the UK!!!!

Misleading thread title!

I know for sure there be some there!