How is the magazine business?

[Mick Mc]

I just saw this...




News-press.com
Bonita Springs magazine publisher Source Interlink declares Bankruptcy

Source Interlink Cos., the Bonita Springs publisher of Street Rodder, Motor Trend, Hot Rod and Street Chopper magazines controlled by billionaire Ron Burkle’s Yucaipa Cos., sought bankruptcy protection as it moves to become a private company.

The company, which also distributes newspapers and other publications, listed debt of $1.9 billion and assets of $2.4 billion as of April 24 in Chapter 11 documents filed yesterday in U.S. Bankruptcy Court in Wilmington, Del.

Source Interlink publishes 75 magazines, mostly about cars and motorcycles, putting it at the nexus of two struggling industries. U.S. magazine advertising revenue in the first quarter fell 20 percent from a year earlier, according to the Publisher’s Information Bureau, an industry group. U.S. auto sales tumbled 37 percent in March. Source Interlink hasn’t reported a profit since the second quarter of 2007.
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“This restructuring will materially reduce our interest expense and debt levels,” Source Interlink Chief Executive Officer Greg Mays said today in a statement. The company also runs Web sites and distributes CDs, video games and DVDs in the U.S.

The company bought the automotive magazines, as well as Surfer, Lowrider, Power & Motoryacht and Snowboarder, from Primedia Inc. in 2007 for about $1.2 billion. It also acquired Soap Opera Digest and Soap Opera Weekly.

Under an agreement with its lenders, about $1 billion of existing debt will be canceled and about $100 million additional liquidity will be provided, the company said. Source Interlink said a lender-approved plan of reorganization will be filed.

In February, the company won a temporary court order prohibiting publishers from blocking magazine shipments to its distribution business. The publishers had objected to a 7-cent delivery surcharge, imposed by the company and since rescinded, according to court papers.

AEC Associates LLC, directly and indirectly, through Digital On-Demand Inc.; Yucaipa One-Stop Partners LP; Yucaipa AEC Associates LLC; OA3 LLC and R. Burkle, own 48.37 percent of the common stock of the company, according to court papers. Scopia Management Inc. owns 9.01 percent, Goldman Sachs Group owns 17.7 percent and the remaining common stock is owned by Dimensional Fund Advisors.

The case is Source Interlink Companies Inc., 09-11424, U.S. Bankruptcy

MORE…...........
Source Interlink Files Pre-Packaged Bankruptcy
by Judith Rosen—Publishers Weekly, 4/28/2009 8:16:00 AM

After trying to right itself financially at the start of the year by charging more for distributing magazines, then suing competitors and magazine publishers with collusion in U.S. District Court in the Southern District of New York when the increase was rejected, Source Interlink is trying a different tack. This morning, it filed Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Delaware as part of a pre-packaged bankruptcy plan. According to Source, the bankruptcy is part of an agreement with lenders to eliminate $1 billion dollars of existing debt and to privatize the company. And Source said it expects to come out of the prepackaged bankruptcy in 35 days.

Some may wonder if that’s possible given the level of debt reported in the Bonita Springs, Fl.-based company’s Chapter 11 filing, which owes more than $1 billion and has assets of between $500 million and $1 billion. Leading off the list of the top 30 creditors are: HSBC Bank, which is owed $455 million; Time Warner Retail, $75.5 million; and Comag Marketing Group, $53.2 million. Levy Home Entertainment, which handles book distribution for Source, is out over $14 million. Source said it will pay all creditors in full if they agree to maintain current credit and payment terms.Court, District of Delaware (Wilmington).




Now I just need to find 'the rest of the story'





Mick

[XcYZ]

Damn. I really hope that they can come out of this ok.

[James OLC]

Hopefully they can restructure and come out of this.

[mosconiac]

***Unpopular Opinion Alert***
***Unpopular Opinion Alert***

Paper magazines & newspapers are a dieing commodity. The electronic age is upon us. Paper magazines & newspapers will all but disappear in my lifetime. Using paper for the purposes of magazines & newspapers is a heinous waste of resources when the internet has permeated our lives so completely. I find most of my automotive information on-line and I rarely look at paper magazines.

***Unpopular Opinion Alert***
***Unpopular Opinion Alert***

With the above said, I will miss those days of curling up with the latest issue and reading from front to back several times. There was a time in my life when I had my collection of magazines memorized from front to back. I could glance at a cover and tell you what was featured inside. I could go to a car show with my parents and tell them what components were used in that car's motor just from recalling the article I had read in Car Craft. Time marchs on. Sorry if someone from this board is caught up in the turmoil of this issue.

[cencal69]

I'm a mixed breed. I like the internet, but I love my magazines. What will I do without Soap Opera digest? I'm switching to Novelas.

[Rybar]

****ty news

Speaking of ****ty, what am I gonna read when I sit on the can for hours on end???

I hope the chapter 11 can help them out.

[ironworks]

Originally Posted by Mick Mc

and has assets of between $500 million and $1 billion.

MAN were they exact when they did this estimate. I'm sure it is way more complex then I could understand, But that just seems funny to me

I guess I could say I have assets between $1 and $500 million.

Rodger

[Steve1968LS2]

Originally Posted by XcYZ

Damn. I really hope that they can come out of this ok.

Were fine.. a simple 30-day reorg to re-align debt.

In fact our magazine - CP - is having great growth.

Officil company memo:

Today, we entered into an agreement with our lenders to reduce our debt, and provide us with additional capital. This restructuring program will significantly improve our cash flow and position us to grow our business and is great news for us all.

Our current management team will remain at the helm and are committed to this business plan. More importantly, none of our employees will lose their jobs as a result of this reorganization.

In order to permit the lenders to realign our debt with available collateral, we have filed a prepackaged reorganization through the bankruptcy court. In a prepack, the critical parties have agreed to the business plan and, as a result, the entire process takes about 30 days to complete. Source Interlink will emerge from this process as a private company with a solid balance sheet.

We intend to operate in a “business as usual” manner throughout the reorganization. Most of you will see little or no change in the way we operate. Our business partners will continue to receive the same level of service they have come to expect from Source.

Be assured that we will do all we can to keep you fully informed of developments relating to our reorganization process. Later today you will receive instructions on connecting to the web cast and get important contact information in the event you have questions during the reorganization period.

On behalf of our entire management team, I’d like to thank you for your continued support.

[Steve1968LS2]

Originally Posted by mosconiac

***Unpopular Opinion Alert***
***Unpopular Opinion Alert***

Paper magazines & newspapers are a dieing commodity. The electronic age is upon us. Paper magazines & newspapers will all but disappear in my lifetime. Using paper for the purposes of magazines & newspapers is a heinous waste of resources when the internet has permeated our lives so completely. I find most of my automotive information on-line and I rarely look at paper magazines.

***Unpopular Opinion Alert***
***Unpopular Opinion Alert***

With the above said, I will miss those days of curling up with the latest issue and reading from front to back several times. There was a time in my life when I had my collection of magazines memorized from front to back. I could glance at a cover and tell you what was featured inside. I could go to a car show with my parents and tell them what components were used in that car's motor just from recalling the article I had read in Car Craft. Time marchs on. Sorry if someone from this board is caught up in the turmoil of this issue.

Yea, and as I remember computers were supposed to create "the paperless office of tomorrow"... how did that work out? lol

not saying that it won't eventually happen, but computers don't yet have the portability and other attributes of magazines.

[youthpastor]

Originally Posted by mosconiac

***Unpopular Opinion Alert***
***Unpopular Opinion Alert***

Paper magazines & newspapers are a dieing commodity. The electronic age is upon us. Paper magazines & newspapers will all but disappear in my lifetime. Using paper for the purposes of magazines & newspapers is a heinous waste of resources when the internet has permeated our lives so completely. I find most of my automotive information on-line and I rarely look at paper magazines.

***Unpopular Opinion Alert***
***Unpopular Opinion Alert***

With the above said, I will miss those days of curling up with the latest issue and reading from front to back several times. There was a time in my life when I had my collection of magazines memorized from front to back. I could glance at a cover and tell you what was featured inside. I could go to a car show with my parents and tell them what components were used in that car's motor just from recalling the article I had read in Car Craft. Time marchs on. Sorry if someone from this board is caught up in the turmoil of this issue.

ahh but there will always be bathroom reading material...