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The death and life
of Fast Company
It was a goner, kaput, until its editor stepped in
By Sean Leahy
It's a special sense, a feeling in the gut,
one of sudden alarm. It's the sense that the magazine you're editing
is about to fold. It came to John Byrne a few weeks back, on May 24.
That morning, in a stunning announcement, Gruner + Jahr
said it was selling its four family magazines to Meredith. But left
on the table in the deal were Inc. and Fast Company, Byrne's
magazine. Word on the street was that someone would buy Inc.
Not so Fast Company. It was a goner, dead, or so the
street had it.
"It was kind of like being in a hostage
crisis," says Byrne, recalling the feeling that crept over him
that day.
Today, these weeks later, Fast Company lives. It has a
new owner, Joe Mansueto, the CEO of Morningstar, the Chicago
investment research firm, and a commitment. The long-struggling
title has a shot at again becoming the hugely successful business
title it was when Mort Zuckerman sold it to G+J for more than $350 million in
2000.
In a full-page ad in Monday's New York Times,
Mansueto declared his commitment to reviving Fast Company and Inc.,
which he also bought: "I have promised the two magazine teams
that they will have all the resources required to build their great
brands."
Mansueto is in every sense Fast Company's savior. Among
the potential buyers who came forward, he was the only one committed
to keeping Fast Company alive. The others wanted Inc. They would
have folded Byrne's magazine. It was Byrne who brought Mansueto into
the bidding when the two titles were put up for auction, and in so
doing he saved his magazine from sure death.
It's rare for a magazine editor to reach out to save his or
her magazine. It's far rarer to pull it off.
Both timing and luck were on Byrne's side.
That very night of the G+J announcement, Byrne attended
a dinner honoring his old boss, Steve Shepard. Shepard had been Business
Week's longtime editor, and for years Byrne was a top Business Week
writer before
jumping to Fast Company in 2003. Everyone that night was talking about Fast
Company, and the talk was that it would fold.
But as it would turn out, that night Byrne ran
into a former colleague, Paul Sturm, now a writer for Smart
Money.
"Paul motioned to me to leave the dining
room," Byrne says. "The two of us walked into the library,
and he said, 'I know someone who could help you. He wants to get into
the magazine business, and this could be a perfect opportunity for
him.'"
That person was Manseuto.
The next morning began an exchange of emails between
Byrne and Manseuto.
"I made sure the higher-ups knew he was interested, made
sure he could get all the offering documents and made sure he had an
invitation to talk to me at any time," recalls Byrne.
Fast Company was not healthy. Ad pages through May had fallen
15 percent, and they were a fraction of what they had
been five years earlier, at the height of the ad economy.
But there was another problem, the documents G+J had
prepared in putting Fast Company on the block. They fell
considerably short of dressing the title up as a good buy. "Not a single person was mentioned directly or
indirectly in the offering document," Byrne says, "not in
terms of their talent, their belief in the magazine, their
experience, nothing."
Clearly, G+J had given up on the magazine. Says Byrne:
"I showed the offering documents to a friend of mine who's a
lawyer, and he told me, 'John, I've just read your death
warrant.'"
Byrne set about to persuade Mansueto that the ills of
Fast Company were the result of G+J's neglect, not of a poorly
executed magazine or dissatisfied readers.
"I felt our case hadn't been made," he said.
"I basically said 'Joe, this is an asset that has been grossly
mismanaged by G+J."
So at 9 a.m. on Saturday of Memorial Day weekend, Byrne
sent Mansueto an email telling him that he was putting together his own
argument for Fast Company. He wrote about the base of loyal readers
and the
awards the magazine had won. He wrote about its promise.
Mansueto was Byrne's one hope. While a number of
first-tier publishers were in the bidding for Inc., it was now clear
to Byrne that none would come forward for Fast Company.
Byrne had canceled a
trip early in June to be on hand to field questions from bidders. But the phone never rang.
"What that told me was that we had one shot at
survival," he recalls. "It was bring Joe along because he believes in us
and loves the magazine or prepare for the eventuality that another
buyer wouldn't want us."
As it turned out, Mansueto was not simply a money man. He
had been a Fast Company reader. He remembered the magazine when it was
strong. He knew the potential was there.
"He dug into the numbers in a really smart and
thoughtful way," Byrne says. "He asked challenging
questions. He did homework on both assets."
Within days, Mansueto won the bidding for both
magazines, paying somewhere between $35 million and $40 million, and
the mood at Fast Company went from despair to elation.
"There's a sense of liberation," says Byrne.
"I think the staff is really happy,
jubilant really. It's not just that we have a new owner. We have a
new owner who believes in running an innovative organization and who
believes in investing instead of disinvesting."
"We actually got into the hands of a guy who runs
his business the way we say businesses should be run, the way we
advocate our readers to run their organizations, and a guy who has
enough money to do that without regard to the bottom line
immediately."
Now the rebuilding begins.
Under Mansueto, each title now has its own
sales and marketing staff. G+J had combined them. Fast Company had already hired one new sales rep, and
as many as another half dozen will be added.
"Our most important job right now is on the sales
side," Byrne says. "This is a full-court press, and we intend
to be extremely aggressive in hiring the best sales and marketing
people possible."
Mansueto plans to increase the magazine's newsstand
draw, which had been cut way back by G+J, and to improve the quality
of the paper stock.
In March, Matt Barba was hired away from the Atlantic
to be Fast Company's publisher, and he will oversee the
expansion efforts.
Even so, Fast Company faces some real challenges, among them
the five years it lost between the ad recession, the collapse of the
dot.com boom and the cutbacks under G+J. It must convince
advertisers that beneath it all is the magazine they once knew.
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July 13, 2005
©
2005
Media Life
-Sean Leahy is a Baltimore
writer.
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