Emap isn't the first British media company to swagger into the US
only to fall flat on its face. It probably won't be the last,
Last week, Emap, a publishing company that has known decades of
uninterrupted growth in the UK, let it be known that it was pursuing the
sale of its US division - the magazine outfit formerly known as
Emap bought Petersen, which publishes more than a 100 hobby and
lifestyle consumer titles, including Motor Trend, Hot Rod and NFL
Insider, for pounds 720 million back in 1999. But it has performed
poorly and things are unlikely to improve given that the US advertising
market is already slowing.
Market analysts now value the business at less than pounds 500 million
and Emap sources are privately resigned to taking a significant loss on
a sale. Anything, they say, to rid itself of one of the biggest factors
depressing its share price.
Where now for Emap? And, indeed, are there wider conclusions to be
Emap didn't mosey over to the US just for the sake of a change of
And it wasn't just about corporate vanity - though there was a large
element of that. Emap has always thought of itself as irrepressibly
cocky and brash, a culture that's unashamed of its efforts, which
generate more heat than light.
So there was a tendency to believe that it would not only be at home in
the US publishing world (as perceived via the medium of cable sitcoms),
but that it'd be able to show it a thing or two. If you've spent a
decade shaking up the London publishing scene, it's only natural to
start believing that you're smarter than everyone else. Especially
Americans who, as everyone surely knows, are stupid, unsubtle, crass or
But there was also an inexorable business logic at play here. The media
world will continue to consolidate - everyone agrees about that. And if
you're not buying you're going to be bought. Increasingly, successful
media properties will be global media properties. Global brands. If
you're not global then you will be swallowed up by someone who is.
Petersen was Emap's application to join the big league.
Has Emap now established once and for all its natural place in the order
of things? Can parochial UK publishers hope to survive as independent
entities? Will IPC, for instance, draw worrying conclusions from this
Paul Richards, an analyst at West LB Panmure, says it should be
remembered that Emap has significant interests in France and Germany.
And he argues that we shouldn't get too carried away with globalisation
theory. He states: 'It comes down to a question of whether magazines are
We can all think of lots that are - Cosmopolitan, Elle and even FHM. But
I think even now, 95 per cent of the magazine business is local. On the
other hand, if you understand the UK market, there's no reason you can't
make that work for you internationally.'
And he takes a fairly charitable view of the Petersen affair. He
comments: 'I don't think we can say that Peterson was the wrong thing
for Emap but what we certainly can say is that it was the wrong time and
the wrong price. It's not a bad business but they bought at the top of
the market and you wouldn't want exposure to the US advertising market
right now. The clouds continue to gather over there. But I wouldn't read
too much into it where Emap is concerned. Europe is a good place to grow
and the company will still want to grow internationally. It certainly
has the management and the structure to do it.'
But isn't there a case for more fundamental gloominess about this?
British-made international magazine successes are rather thin on the
ground. And you could say the same about TV. Despite our smug belief for
decades that we made the best TV in the world, the world actually
watches Friends, not Babes in the Wood. And despite our certainty that
we know a thing or two about newspapers, our press is owned by Canadians
We're not much good at this media business, are we?
Sue Unerman, the director of strategic solutions at MediaCom, doesn't
believe that. She doesn't believe in mono-lithic thinking either: 'It's
true that magazine brands are increasingly global properties, but you
don't have to have huge acquisitions to achieve that. You can launch a
title in another market without that.
It's not necessarily a case of all or nothing - media owners do need to
think global but they can do that by having global properties rather
than networks. There are other ways to give advertisers what they want.
The balance that's hard to achieve is between the creative expertise in
producing great media brands and the commercial skills needed to make
sure you get a return on investment.'
But Murray Dudgeon, the New York-based executive vice-president and
worldwide operations director of Universal McCann, argues that Emap
actually got quite a lot right. He says that if you look back at the
past few years, the group's two real US successes have been the lads'
magazines FHM and American football title NFL Insider - clearly
demonstrating Emap's ability not only to import titles successfully, but
also to develop local product. However, if you look at the year-on-year
advertising pages sold (2000 versus 1999) for the group as a whole, it's
clear that the rest of the group's publications did not fare so
But what can we learn from the whole episode? Dudgeon responds: 'While,
as ever, there is much hype associated with the constant consolidation
of media owners, there is no doubt that media groups with the ability to
really package up their channels are increasingly beginning to have a
real impact on the market. A softer economy will drive this even more,
not out of expediency, but necessity. In the UK, Emap has a much broader
base of different media types, which it has successfully taken to
In North America, it appears it may not have built that base quickly
enough either through acquisition or new launches.'
Ian Clarke, an international group director at Starcom Motive, agrees
that we can't read too much into this: 'Of course global properties are
important but you can be a strong media owner if you have a strong
domestic business base - and advertisers will always want to use strong
indigenous publishers. They are most likely to reflect or lead trends in
lifestyles or attitudes. They are best at conveying a local cultural
flavour. And the thing about having a strong local business base is that
if they can stay independent, they can always look at diversifying
overseas at some point again in the future.'