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As far as I recall, Stereophile is one of Source Interlink's magazines (along with Motor Trend, etc).
Is there any impact?
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> Stereophile is one of Source Interlink's magazines (along with Motor
> Trend, etc). Is there any impact?
No. It is business as usual and perhaps better than usual as with the
parent company's debt burden significantly reduced, there may well now be
increased investment in its properties, like Stereophile.See the press release at the link below
John Atkinson
Editor, Stereophile
Edits: 04/28/09
though I've been critical of your magazine in the past-I'd hate to see it no longer exist. Hope it all works out well for you, your staff, and the Stereophile brand. Think I'll order me up a subscription right now....seriously.
I'll also take this opportunity to comment on how gracious you've always been on this blog, even in the face of sometimes withering critiques, or simply assinine commentary. Thanks for that, and...
vaya con dios
"dammit"
The linked article says that the lenders wrote off $1 billion in debt and agreed to provide another $100 million in cash. So what do the lenders get out of the deal?
In short - they get paid.
In more detail: The creditors (e.g. banks) think they can get more money if the company continues to operate. It needs more money to continue operating.
> The linked article says that the lenders wrote off $1 billion in debt and
> agreed to provide another $100 million in cash. So what do the lenders get
> out of the deal?
Ownership. By the end of May, Stereophile and all the other magazines in
Source Interlink Media's portfolio will be owned by a consortium of banks.
Why would banks rather have ownership than continued interest payments?
Because SIM's debt-to-revenue ratio was too high for continued healthy
operation and this way they get all the profits.
John Atkinson
Editor, Stereophile
So the shareholders get nothing. And the banks get all the money. I wonder how big of a bonus the CEO got this year?
Yes, "bend over share holders" is a common theme these days, the corellary to which is "you took the risk, too bad, you lost". Still, the staunchest defenders of unrestrained capitalism seem to be the people who will lose the most as a result of it.
That is what I call effective marketing.
"Live free or die"
Lenders get a fixed return and, unlike equity holders, do not share in the upside of a successful venture if its valuation increases. In exchange, they get more protections in the event of insolvency. Equity holders take the risk of losing their invested capital, but get all the upside if the venture goes gang busters. What is wrong with that? It's just logical to me.
.
The worst thing in 1954 was the bikini; see the girl on the TV dressed in a bikini; she wouldn't think so, but she's dressed for the H-Bomb!
Honestly, you have all lost me. I was responding to one particular comment about the supposed unfairness of how stockholders are treated relative to creditors. That's it. That is all I was responding to.
...when banks lose all their money as a result of poor investing and excessive leverage, they get all their debts paid off by somebody else. Or hadn't you noticed?
big j
"...only a very few individuals understand as yet that personal salvation is a contradiction in terms ."
But that is not what we are talking about here, or hadn't you noticed?
Also, the bank bailouts are not intended to protect the stockholders, even if that is an incidental result. Like it or not, the government sometimes bails out businesses that are perceived as so important to the economy generally, or to certain sectors of the economy, that they should not be allowed to fail. Municipalities get bailed out too (NYC during the late 1970s, for example).
NT
"Live free or die"
What, exactly, did you mean?
I just looked at the report on Bloomberg. This is a prepackaged bankruptcy plan, which means that debtor Source Interlink has arrived at an agreement with its creditors before filing bankruptcy and that it will come out of bankruptcy pretty quickly as a new entity, as opposed to a liquidation. I don't know the details, but there is no reason it should have any specific impact on any specific magazine.
Prepackaged bankruptcies can be quite effective. In fact, I would like to see GM go through something like that!
First off let me the first to admit, I am dunce in high financial matters.
But, with all of these bailouts with large companys that the government feels are neccesary to the economy. In the long run wont it be worse for the economy if these company feel they dont have to be fiscally responsible and want to get bailed out all of the time they loose money?
I will take my answer off the air.....
I don't know. If I was in JA's position, I'd be very nervous - or perhaps as the good captain I think he is, would work twice as hard and hope storm's going the other way...
Over half of the publishing portfolio is print based, car related magazines. Magazines (and print based industry) are going down the drain, and we all know about the auto industry. So an increase in advertising revenue is not something I'd expect.
Parent company prime business is fullfilment. I wouldn't bet on the content part of the business. I doubt business is really as usual. If it is, I'd rather be elsewhere.
Well, I enjoy the paper magazine and have found that the web site is getting better. I wish the whole stereophile crew the best of luck and would guess that they are in the same boat as most of the rest of us. Reorganization, re-prioritization, and a move towards positive change. Keep up the good work.
There will always be demand for quality intellectual content. However, the delivery model (the whole economics of publishing) needs to be changed from A to Z.
There is a very interesting canadian research project implemented in large chinese universities, where a small fee is charged to each student for internet content access (i-e music downloads). Something like $5 per student per semester.
For the first year, music downloads revenues went from less than 5 millions to over 500 millions. This is a very clever system: the researcher underlined that instead of spending 90% of revenues in advertising (old model) to gain market share, you could very well get 100% market share by charging 10% of what's being charged now for content.
I don't know how it could work for the publishing industry, but advertising alone cannot and should not pay all bills.
In Canada, we have a cable/satellite system that regulated by government. Part of the subscription revenues is fed back to content suppliers (specialty channels). Since the system is regulated by Law, each content provider must provide so many hours of canadian content and no more than x minutes of advertising.
The system works and producers are paid for content.
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