IN THE NEWS: LA’s Frontiers to emerge stronger after bankruptcy protection; Bay Area Reporter restructures, links with mainstream papers, with eye on survival; The Advocate print edition moves to NYC, while digital stays in LA; The Advocate launches new app Advocate Discovery; Canada’s largest LGBT publication launches Xtra Living
LA’s Frontiers to emerge stronger after bankruptcy protection
by Chuck Colbert
In a move to restructure its debt and emerge with a stronger balance sheet, Frontiers Media, LLC, has filed for bankruptcy protection from its creditors.
Based in Los Angeles, the media company publishes Frontiers Magazine, the oldest and largest circulation LGBT publication serving Southern California. It is distributed free of charge primarily in San Diego, Long Beach, West Hollywood, and Palm Springs.
News of the filing came in a March 20 press statement, which said Frontiers Media filed a voluntary petition for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Central District of California.
Frontiers has liabilities of $3.2 million and assets of $342,000, only $58,000 of which is in cash, according to the filing.
If approved by the court, the move means that Frontiers will continue its daily operations and regular publishing schedule as “debtor-in-possession” for the duration of its bankruptcy case. Meanwhile, the bankruptcy court and bankruptcy trustee will determine which creditors get paid and how much.
Frontier Media owes Wells Fargo Bank, its largest creditor, $1.6 million. Other creditors are the estate of the late Mark Hundahl, a co-owner ($246,000), current owner and publisher David Stern ($191,000), printers, lawyers and landlords for Frontiers’ offices, freelancers, an associate publisher, and the managing director of integrated media.
“Mark Hundahl and I, as the publishers of IN Publications Inc., purchased Frontiers in 2007 when the landscape of media looked quite different,” publisher Stern said in a statement. “With the passing of Mark in December 2012, I felt this was the right time to restructure the debt of Frontiers Media so we could remain a strong and viable resource for the LGBT community.
“So, after careful consideration of various economic factors, I made the decision to enter formal Chapter 11 restructuring. Our circulation [30,000] and advertising base remain strong, and we fully expect to emerge from the reorganization process on sound financial ground. Filing under Chapter 11 will not only allow Frontiers to publish its biweekly editions while restructuring certain legacy costs, but also to propose a future operations plan to the court that further enhances the company’s value.”
During a recent telephone interview, Stern declined to discuss the bankruptcy process in any detail other than to say that his next court appearance is in July, and the judge has approved ongoing operating cost. Meanwhile, Frontiers Media is required to file monthly reports.
Still, Stern said he is “looking to come through [Chapter 11] stronger or have the right type of investor who understands the vision of what I am trying to do — merge events and merge digital and print.”
Stern was referring to Frontiers’ newly designed web site and new online core business model, which features LACityScoop, a directory of gay-friendly businesses and hottest deals in Los Angeles.
Stern said Frontiers’ online presence has been “growing at a nice pace in two years,” up from “4,000 hits per month on average to 60,000-plus.” More recent statistics showed that for April, there were 90,000 unique visitors per month
Stern said that with financing, he would like to move into mobile apps and video-driven content.
Stern was also referring to Frontiers’ addition of events sponsorship to the company’s business model. Last year, for instance, Frontiers held the first-ever West Hollywood Auto Show, a two-day event.
“Frontiers is a brand the LGBT community knows it can trust,” he said. “Car dealers reaching out and partnering with our brand let people know their dealerships are gay-friendly and supportive.”
Other revenue generating events are Frontiers’ annual birthday celebration and Community Builders Awards. Frontiers celebrated its 31st anniversary in April.
While Frontiers editor Stephan Horbelt emailed staff and freelancers to reassure them, News Editor Karen Ocamb posted an entry on her LGBT POV blog (http://www.lgbtpov.com).
“Frontiers is not folding; no one’s getting screwed out of wages and I, for one, am as committed as ever to producing accurate, interesting and thoughtful news, opinion and public affairs stories to our readers,” she wrote. “Please check out Part One of the history piece on Prop 8 (http://www.frontiersla.com/foundation/marriageequality/prop8archive/index.aspx). I would not have put such time and care into a project for which there is no future.”
Ocamb’s history piece is posted through a web link to the Frontiers Awareness & Education Foundation (FAEF), a separate non-profit organization established in 2012. The foundation has already created a marriage equality microsite through a $5,000 grant from the Walter and Evelyn Haas Foundation. FAEF’s mission is “to empower the next generation of LGBT media professionals and allies, training authentic new voices through evolving sustainable media platforms that will ensure our stories continue to be fully and accurately told.”
Publisher Stern points to FAEF as an example of “having a non-profit as a completely separate company under the same brand serving the [LGBT] community in so many ways.”
The hot topic of marriage equality and Proposition 8, he added, presented Frontiers Media with an opportunity to produce a variety of stories through multimedia venues just in time for oral argument before the U.S. Supreme Court.
“We got the web site up in three weeks time, along with most of the archives,” said Stern, “and we’re still loading up the whole platform to show the history of marriage equality.”
Bay Area Reporter restructures, links with mainstream papers, with eye on survival
by Chuck Colbert
In a move to maintain local control and ensure survival, the nation’s oldest continuously publishing LGBT newspaper announced a restructuring plan, which includes shareholders in local mainstream and alternative media. Top management at the Bay Area Reporter (BAR) announced the plan to staffers during an April 22 meeting. BAR broke the news to the public in a story written by Assistant News Editor Seth Hemmelgarn later that week.
During the meeting, BAR publisher Thomas E. Horn and general manager Michael Yamashita explained that the Bob Ross Foundation — the owner of BAR — has signed a letter of intent with Todd Vogt and Patrick Brown. Vogt and Brown are shareholders in the San Francisco Newspaper Company, which owns the Examiner, the San Francisco Bay Guardian and SF Weekly.
Under the restructuring, a new company, BAR Media, Inc., will be created in order to acquire 100 percent of Benro Enterprises, Inc. Benro’s primary asset is the newspaper. Currently, the Ross Foundation owns all the stock of Benro, which will cease to exist.
Yamashita will own 31 percent of the new company and will become the paper’s publisher. The foundation, named after BAR’s co-founder and former publisher, will own 20 percent. Vogt and Brown will own 49 percent, collectively. (Ross died in 2003.)
Horn, the foundation’s director, will become publisher emeritus and chair of the BAR Media board, with Vogt and Brown serving as management advisers.
The paper’s current staff will maintain “total, independent control over editorial decision and content,” according to Hemmelgarn’s reporting.
During a recent telephone interview, new publisher emeritus Horn explained the impetus for restructuring.
The Bob Ross Foundation owns BAR, and the Internal Revenue Service prevents a for-profit business like BAR from being owned by a private foundation. “I had a certain amount of time [until 2016] for the foundation to divest itself of the [80 percent] business interest,” said Horn. “We were able to obtain one extension during the time period. But the IRS only permits one.”
Restructuring achieves two main objectives, Horn said. “The principal motivating factor was the requirement to comply with the IRS code and divest the private foundation of BAR.”
The Bob Ross Foundation holds an IRS non-profit classification as a charitable organization. Under IRS tax code, the foundation is permitted to hold a minority interest.
Currently, the foundation owns the BAR, but the two enterprises have been required to be financially and completely independent, Horn explained.
The second objective, Horn continued, was “to the extent possible — because it would have been what Bob wanted — preserve BAR as an LGBT asset for the community and have BAR remain an integral part of the community.”
Ross knew BAR would have to be sold or restructured, Horn said. But he hoped that “in an ideal world, BAR remained a community asset” as the same “ownership would remain local. We got both of those hopes in restructuring.”
Bay Area Reporter’s restructuring comes as the newspaper industry continues to grapple with economic realities resulting from the Digital Revolution, the 2008 recession, and declining advertising revenues.
“It’s an industry-wide problem, and not a problem unique to us,” said Horn. “It’s harder and harder for small independent operations totally dependent on themselves to survive.”
Horn discussed a telling example. “At the paper’s apex, 60 percent of revenue came from classified advertising, which came from people selling cars, looking for an apartment, and personals. That percent has drained to nearly nothing, as is the case with all newspapers. Classifieds now account for just 10 percent.”
Consequently, “We’ve become much more aggressive with display ads,” he said. “But we are just too small to leverage national contracts.”
“We hope that by creating a partnership with a much larger media operation that we will be able to leverage that for national advertising and be able to use their economies of scale to make our operation more efficient and to ensure the long-term survival of BAR,” said Horn.
BAR’s restructuring model, he said, “will work for an established publication. You have to start with a product that has already captured the demographic. On BAR’s editorial side, we fill a demographic that their other papers don’t. They are very desirous of the content that we are able to provide.”
Horn said that Brown and Vogt are partnering as individuals, not as the San Francisco Newspaper Company. While BAR Media will have access to the other company’s resources, “We will not become part of it,” Horn said, quoted by Hemmelgarn.
Brown told BAR, “We have no intention of changing the news perspective,” but “if we can enhance things, whether it be content or advertising or whatever, it would be silly, even foolish, if we didn’t look at that.” Brown also said that he and Vogt would have “absolutely” no role in editorial decisions or content.
Currently BAR’s print run of 29,000 is distributed free of charge throughout San Francisco. It has an estimated readership of 120,000. Under the new partnership, distribution may expand in the East Bay and perhaps the South Bay and Peninsula.
Another benefit of restructuring is leveraging the new media partners’ operations for assistance in production and advertising and in accounting and administration.
For his part, Horn is not stepping aside. As chairman of BAR Media’s board and chair of the publication’s editorial board, he will continue to be “the public face of the paper,” Horn said. “I’ve been publisher in name for the last 10 years. Mike [Yamashita] has done the responsibilities of publisher. His new title is more in line with what he really does.”
Reaction to BAR’s restructuring has been encouraging. “We got no push back,” said Horn. “The staff has been positive.”
One former staffer, Will Snyder, posted his thoughts on BAR’s web site. “My happiest time was my four-and-a-half years with the Bay Area Reporter 1985-90,” he wrote. “As a BAR ‘alumnus,’ I still follow the progress of this very unique publication. … This new deal … should enable it to continue to serve the LGBT community.”
Another reader, Skeeter Sanders noted, “Michael Yamashita is gay — and will be making history as the first Asian-American publisher of a major LGBT newspaper in the United States. … It’s certainly a new era for the BAR.”
Other public reaction, said Horn is, “Ho hum. ‘You’re restructuring, so what?’ The community is more up in arms about Bradley Manning in the Pride Parade.” Horn was referring to the U.S. Army private who is charged with leaking hundreds of thousands of classified government documents through WikiLeaks. Initially, the San Francisco Pride Committee named Manning an honorary grand marshal but reversed its decision prompting angry reactions and a commotion during a recent Pride board meeting.
BAR’s restructuring is expected to be completed within three to four months, said Horn.
Todd Evans, president and chief executive officer of Rivendell Media, the nation’s leading gay and lesbian placement company, praised BAR’s move as a model for others. “BAR’s model might be a model to save other LGBT publications,” said Evans.
(Editor’s note: Chuck Colbert is a frequent contributor to BAR. Rivendell Media publishes Press Pass Q.)
The Advocate print edition moves to NYC, while digital stays in LA
by Joe Siegel
Not long after its return to newsstands as a bimonthly magazine, the Advocate is about to experience another major change.
Here Media, which publishes the Advocate and Out, will be producing the magazine through Grand Editorial, the media company run by Out Editor in Chief Aaron Hicklin. Matthew Breen, the editor in chief of the Advocate, will retain his title, but the magazine’s print focus will shift from the magazine’s current Los Angeles headquarters to New York, where Grand is based.
The change is not unprecedented. Here Media transferred the entire staff of Out to Grand Editorial last year, with the entire staff being laid off and some brought back on a contract basis. This time only Breen will be on contract, the rest of the Advocate staff will continue to work for Here Media and will stay in Los Angeles in order to focus on the company’s digital properties.
Here Media Inc. produces and distributes niche content across all platforms worldwide. Its distribution platforms include television, video on demand, broadband, online, print and mobile. It earns subscription, advertising and licensing revenue from its award-winning content.
Here Media owns and operates a variety of media assets, including Here TV, The Advocate, Out, HIV Plus, the Alyson Books publishing division, and online properties including Gay.com, Advocate.com, Out.com and SheWired.com.
In an interview, Breen said the decision makes sense for Here as it tries to invest more in its digital properties. “The biggest growth opportunity for the Advocate brand generally speaking is online and mobile,” Breen said. “Here is devoting more of its resources that went in the past to print to online and mobile.” (See “The Advocate launches new app Advocate Discovery” below.)
These have been trying times for print journalists, particularly at news publications with the rash of staff reductions and outright eliminations of some newspapers and magazines. The Advocate’s move back to a print publication took many media observers by surprise.
“(The Advocate) will still be available on newsstands and by subscription,” Breen said, noting that the magazine will be bundled with issues of OUT. A digital edition will also be available.
Readers shouldn’t notice any changes to the print edition, Breen noted. “There will be no changes in terms of frequency or availibility,” Breen said. “Those will remain the same.”
The Advocate has had a tumultuous history as a business, verging on extinction multiple times in its 45 years. Just three years ago, contributors were vocal about not receiving payments for their work. In spite of the difficulties, the magazine manages to stay in business. Breen hopes the Advocate will continue to serve as a voice as well as to document the “cultural touchstones” of the LGBT community.
“I would like to continue to do more investigative reporting and some thoughtful provocative cover stories,” Breen added.
The Advocate launches new app Advocate Discovery
by Chuck Colbert
The Advocate has launched a new advertising-supported iPad application, Advocate Discovery, through a partnership with web discovery engine Trapit. The new free app allows users to aggregate LGBT content from around the world and tailor it to a reader’s specific interests.
The Advocate Discovery app allows iPad users to find news important to them in a user-friendly, comprehensive manner. The app delivers a selection of the most recent articles, features, blogs and videos on the topics most important to individual readers. Each user can create new “traps” that pull content from Here Media’s network of websites — including Advocate.com, OUT.com, Gay.net, OutTraveler.com, HIVPlusMag.com and SheWired.com, as well as hundreds of thousands of other LGBT-relevant and mainstream news sources.
As they continue to use Advocate Discovery, the app learns more about its users and delivers an ongoing personalized selection of content.
Advocate Discovery also allows readers to easily share important news stories through social networking platforms, including Facebook, Twitter and LinkedIn, or schedule headlines and features to share using Buffer.
“For over 45 years, the Advocate has been the news source of record for the LGBT audience. The brand has grown and evolved from a newsletter to a glossy print publication and now has a robust, growing web presence,” said Paul Colichman, CEO of Here Media, in a statement. “The Advocate Discovery app is the next step in the evolution of this trusted and iconic brand and will surely be the only app anyone concerned with gay news ever needs.”
Here Media chose to work with Trapit for the new Advocate Discovery app, according to a press release, because of the unique way Trapit gathers its content and compensates publishers. While most discovery apps pull content from publishers without linking back to the original source or showing ads from that publisher, Trapit discovery apps display the same advertisements that would be seen on the original publisher’s site.
“We are proud to partner with Here Media, publishers of The Advocate, to combine Trapit’s advanced AI and content personalization with the most forward-thinking and largest LGBT media company,” said Gary Griffiths, CEO of Trapit. “The new Advocate Discovery app will allow Here Media’s loyal readership to get all their news and headlines from sources around the globe in one convenient and easy-to-use app through the Advocate brand.”
Advocate Discovery can now be downloaded through the Apple app store and will be curated by the Advocate’s editorial team.
The Advocate editorial group is comprised by 16 staffers including editors, reporters, copy editors and art department, according to Editor in Chief Matthew Breen.
And yet the Advocate has had two key departures — New York correspondent Julie Bolcer, who left at the beginning of 2013, and Washington, D.C., correspondent and news director Andrew Harmon, who left several months earlier. However, Breen said, the Advocate is currently hiring for a D.C. correspondent, which will be a paid staff position.
The Advocate is currently available to consumers via the print publication and online at Advocate.com.
Earlier this year and after a two-year hiatus, the Advocate returned to newsstands for sale and distribution. “Some 18,000 copies of The Advocate to newsstands and bookstores including Barnes and Noble (631 stores),” Breen said. “The Advocate has over 100,000 paid subscribers of which 93,000 are subscribers, 7,000 newsstand.”
Asked what the Advocate’s return to newsstands might indicate about the overall state or health of LGBT media, Breen said, “While we all like to keep on eye on the state of LGBT media in general, it wouldn’t be accurate to say that our return to newsstand is a bellwether of some kind. As the only American LGBT news brand with both print and online expressions, the Advocate is unique, so reader and advertiser interest is unique to The Advocate as well.”
Canada’s largest LGBT publication launches Xtra Living
by Joe Siegel
Toronto-based Xtra has announced the launch of a new print publication, Xtra Living (XL), a consumer-focused publication to be released in the spring and fall.
“Each issue is a content-rich product and services directory that focuses on the best of Toronto: where to eat, shop, hang out and find the products and services needed for getting the most out of life,” said Derrick Branco, Xtra’s national account manager. “Our readers enjoy spending money and are loyal to businesses that support the LGBT community. Compared to the Canadian average, XL readers eat out more frequently, socialize more and spend more money on clothing, electronics and home goods.”
Branco said XL has received “an overwhelmingly positive and popular response with our advertisers.”
XL is a free pickup publication, just like the primary biweekly Xtra newspaper. XL is being distributed by insertion into Xtra. The premiere edition hit streets on May 16.
Branco believes XL will be able to thrive in a competitive media environment.
“XL is a unique product that will create its very own market segment; a first of its kind in Toronto,” Branco said. “So we are not concerned about it eroding revenue or resources from its parent product, Xtra newspaper. We also understand that there is still a need for an LGBT resource guide for our readers.”
Volume 15
Issue 2
IN THE NEWS
Comments
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