CBS and Rupert Murdoch divide the Ziff-Davis publications
When William Ziff put 24 profitable periodicals on the block last month, there was no shortage of eager bidders. Ziff-Davis, a subsidiary of the Ziff Corp., was offering for sale twelve consumer magazines and twelve technical and travel publications, most of them leaders in their markets. Among those interested were the New York Times Co., Time Inc., Hearst, CBS and ABC. The massive sell-off was accomplished in just 24 hours last week, when CBS purchased the consumer group for $362.5 million, and Australian Press Lord Rupert Murdoch bought the trade publications for $350 million. Although the cash may have sounded middling by the standards of current Wall Street corporate transactions, the sales ranked as the biggest and second-biggest deals in magazine history. Said Smith, Barney Analyst Edward Atorino: "Ziff got much more for his magazines than anyone thought he would. In terms of getting the best price possible, Ziff is clearly the winner."
Many other industry observers felt, however, that the buyers were as fortunate as the seller. Since the Ziff magazines are among the most lucrative in publishing (each of the two groups had annual profits of some $32 million last year), the impact of the acquisitions will be dramatic for both purchasers.
For CBS, the Ziff publications (Backpacker, Boating, Car and Driver, Cycle, Flying, Modern Bride, Popular Photography, Skiing, Skiing Trade News, Stereo Review, The Runner and Yachting) are a windfall. In one stroke, CBS added a dozen established moneymakers with a combined circulation of an estimated 4.7 million to its publishing operation. The company already owned eleven titles, including the Sunday newspaper supplement Family Weekly (circ. 13 million), Woman's Day (circ. 6.9 million), Field & Stream (circ. 2 million) and Mechanix Illustrated (circ. 1.6 million). Ziff called CBS "a great new home" for his magazines. A delighted CBS Chairman Thomas Wyman, who helped engineer the deal, described it as "a rare opportunity to acquire a very successful, well-managed business."
One immediate advantage of the purchase is that CBS will be able to offer advertisers more enticing combinations of readers. A common practice in advertising is to buy space in a number of a publisher's magazines. The advertising rate is lower than it would be if space were bought in one publication at a time, the advertiser reaches a broader audience with similar interests, and the publisher is able to use the range of his titles to increase ad pages across the board. Some areas of overlap at CBS resulted from the acquisition. Ziffs Cycle and CBS's Cycle World, for instance, are the two leading motorcycle magazines; Ziffs Car and Driver appeals to many of the same readers as CBS's Road & Track; Ziffs Stereo Review and CBS's Audio are rivals, as are Popular Photography (Ziff) and American Photographer (CBS). Nevertheless, CBS said none of these publications would be dropped. The move to beef up the CBS publishing division follows the company's recent decision to shut down such video ventures as a cultural cable network, a videodisk operation and a direct satellite broadcast operation that suffered estimated aggregate losses of $100 million over three years.