Magazine article Folio: the Magazine for Magazine Management

Worth Publisher Gets Re-Capitalized

Magazine article Folio: the Magazine for Magazine Management

Worth Publisher Gets Re-Capitalized

Article excerpt

After a six-year relationship with the venture capital arm of Fidelity Investments, Capital Publishing founder/CEO Randy Jones decided he needed room to move. In early April, Jones arranged to buy out Fidelity's majority stake in the company with new financing and a new partner, New York City-based private investment fund Greenwich Street Capital Partners.

"I didn't want Fidelity to go away," Jones says. "They were the original money, but I needed a new partner who had the same sort of growth ambitions that I did." The deal frees up Jones to grow Capital quickly, and gets the company's flagship title, worth, out from under competitors' charges that it couldn't be fully impartial while owned by a financial company.

In addition to Worth, New York City-based Capital Publishing publishes Civilization, a bimonthly general-interest title, and The American Benefactor, a philanthropy quarterly. Worth is considered one of the top personal finance titles (it earned four National Magazine Award nominations this year), but competitors have alleged that Fidelity's majority ownership could have possibly led to bias. "That was never really the case, but perception is a powerful thing," Jones says.

Steven Swartz, editor of SmartMoney (a Worth competitor jointly owned by Dow Jones and Hearst Magazines), says that although he considers Worth head John Koten an excellent editor, "He probably finds [the new arrangement] liberating." Worth was originally launched as a Fidelity house organ called Investment Vision. When Koten took over in 1993, he moved the staff to New York City and strove to emphasize the magazine's editorial independence.

Capital's Jones, who was the youngest-ever publisher of Esquire, adds that he anticipates a significant financial benefit from the split with Boston-based Fidelity: "Mutual fund companies within a 50-mile radius of Boston would not advertise with us. We [left] about a million or two million of ad revenue on the table every year. That [income] should help my bottom line."

Jones acknowledges that although Worth is profitable, neither of the other two titles is making money, nor is Capital Publishing as a whole. But black ink might not be far off. Civilization, the official magazine of the Library of Congress, may break even this year and should be fully profitable by 1999, Jones says. According to Audit Bureau of Circulations figures, subscriptions at Civilization for the final six months of 1997 were up 35 percent over the year-earlier period, when it was foundering under previous owner Petrus Partners.

Capital recently moved Civilization's editorial offices from Washington to New York and announced it would use a guest editor for every issue. (Martin Scorcese edited the January/February issue; the future lineup includes personalities ranging from Vaclav Havel to Julia Child. …

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