It is 54 years since Time Out magazine was launched by UK student drop-out Tony Elliott. This month, the magazine which kicked-started a worldwide portfolio of magazines and guide books, is publishing its last printed edition in London. The company plans to concentrate on digital information and the expansion of its food markets across the world.
The magazine closure poignantly marks the second anniversary of the death of the visionary founder Tony Elliott from cancer. But he had long since lost his fight to keep control of the business.
Time Out was effectively rescued in 2010 by Peter Dubens, a low-profile, tech-focused investor, whose Oakley Capital in 2016 sold the sizzle for its IPO: “Since Oakley’s initial investment, Time Out has significantly grown and developed its digital media and e-commerce business, transitioned the magazines to a free print model in key geographies, consolidated the brand ownership by acquiring back the key licensee territories and acquired the Time Out food market in Lisbon, Portugal.”
But, six years later (and even after successive capital raising) the company’s market cap is 15% below the IPO valuation – and it’s still lossmaking. For all the growth in its food markets, Time Out is still dependant on digital advertising but the print revenue has fallen to £3m – 60% down in 10 years, and now that’s coming to an end.
Time Out is no longer primarily a media brand.
The future depends on its concept of food markets (bringing together a city’s best restaurants, food shops and culture under one roof) which had begun eight years ago in Lisbon, Portugal and which now extends across North America, the Middle East, and Asia.
It’s very different to the 1968 of the US assassinations of Martin Luther King and Bobby Kennedy, street battles in France, Russian tanks suppressing the Prague Spring, and violent anti-Vietnam war demonstrations in London. That was the year when Tony Elliott produced the first edition of Time Out from his mother’s kitchen table, on his summer vacation from Keele University.
The magazine started as a fold-up A5 black & white sheet. Elliott himself sold copies for one shilling (5p) on the streets of Central London. It covered the youth issues of the day including racial equality and police harassment. The first issue featured a Ronald Reagan movie season, and an “AgitProp” section which listed all the week’s political meetings and demonstrations. It invited readers to “meet the fuzz” at an anti-Vietnam war march.
Elliott was fascinated with the underground culture of 1960s London and the apparent need for reliable information about what was going on, in the arts, sports and political activism. Early issues even helped promote some well-publicised, illegal “squatting” at prominent (but unoccupied) London houses. Time Out was an instant success, and the ads started flowing in.
Over the years, the magazine shed its political roots and swelled to a 110,000-circulation weekly at its peak, but it remained the trendy voice of London. There were troubles along the way, including a 1981 strike by journalists who walked-out to start a co-operative-managed rival, City Limits, in protest at Elliott’s decision to scrap his policy of paying all journalists the same (yes). That rival lasted more than a decade, while Richard Branson’s well-funded Event magazine, closed after just six months.
Time Out gradually shed the politics and grew to become London’s leading lifestyle and listings magazine, then expanded into New York and other cities in the 1990s, as well as publishing best-selling city guides around the world. In the 1970s, Condé Nast was reported to have offered £100m to acquire it. Although the offer was never quite that high, Elliott came to regard the US owned glossy publisher as the perfect partner, the one that got away. There was no shortage of lesser suitors with which he flirted. But the history of Time Out has been punctuated by financial pressure. It always had many more plans than cash.
Elliott had been determined always to remain in sole control of his business. He was a popular, enthusiastic and passionate boss who never quite trusted anyone else with his brainchild. A former colleague once said: “Tony is a suburban cottage industry. He’s essentially a small shopkeeper.”
But, by 2004, the Time Out founder was saying: “The company was started with no money and we’ve traded for 36 years and constantly expanded using profits and bank backing. Its reached the point when, if we could find the right financial backer, it would make a lot of sense for me to sell between 15-30% of the company to give it some working capital and so I can take a bit of money out.”
Three years later, Elliott gave an unwitting clue to the company’s financial fragility in a newspaper interview: “One of the reasons my salary is so high is so I can service a huge mortgage on my £5m six-bedroom house in St John’s Wood. The plan was to reduce the mortgage by taking dividends out of the company in bite-size chunks over the years, but we’re continuously expanding so I’ve never done that. In the meantime, I end up being the bank guarantor for the business overdrafts because I’ve got such a valuable house, so I have to have it.”
Time Out had a number of very profitable years, but the founder seemed unconcerned about the losses in between. And, while the magazine industry was consolidating, Elliott clung to his independence. He had always been much more interested in ensuring the quality of magazine content than in managing the business fundamentals, even though he himself made almost all the company’s key decisions.
He frequently spent months with a succession of financial advisers and brokers discussing how to raise capital for the cash-strapped business. But interested investors wanted to know how they could ever earn a return on their cash if there was to be no change in Time Out’s no-low profit strategy or an eventual sale of the business.
Elliott was having none of it. The result was that his widely-admired company perpetually lacked the funds to support its ambitious strategies. And that was even before digital disruption shook the foundations of print media everywhere. While his magazine had survived an onslaught of new UK print listings rivals, the web caught him flat-footed. Time Out’s listings content made it especially vulnerable to replication online.
The irony is that Tony Elliott was an early buyer – more than 15 years ago – of all the latest Apple gadgets, while Time Out itself was falling behind in technology. His cash-strapped sites around the world did not even share a common platform.
Although the company subsequently developed its digital audience, it never had the robust strategy or the investment with which to counter falling advertising and copy sales (which eventually prompted the switch of most Time Out editions to free distribution).
The once-golden magazine gradually ran out of options.
In November 2010, Oakley Capital bought a 50% share in a deal which paid-off Elliott’s company and personal debt and valued Time Out at some £20m. The Time Out founder sounded enthusiastic: “I have considered many potential investors over the last seven years to help the brand with the next phase of development and I believe that Oakley Capital, with its entrepreneurial operational focus, will help us with this. I genuinely believe that I have found a real partner for what I expect to be a hugely successful worldwide digital journey.”
But the 50:50 partnership lasted just six months.
The business soon needed more cash and, in exchange, Oakley increased its shareholding to 66%. Tony Elliott had lost control. Before the £195m IPO, his shareholding had fallen further, to 2.6% and, after the IPO, to just 1.4%. Having relinquished the chairmanship, the Time Out founder spent his last years merely as a non-executive director of the company he had built.
Time Out is a 54-year-old media parable. It pioneered a magazine style across entertainment listings, classifieds, and the arts in many cities, and went global with its travel and restaurant guides. But the financials never quite caught up. The upshot is that the founder – who had, for so long, been reluctant to reduce his 100% ownership – lost the lot for a small fraction of the millions he once waved away. And, now, the very survival of the legendary brand depends primarily on the success not of media but of food markets.
But an Australian entrepreneur may just be preparing to fill the gap left in London by Time Out.
He is Nick Shelton, founder of the 12-year-old Broadsheet Media which self-describes as “the authority on the cultural life of your city”. It’s a highly successful digital media brand, with a free quarterly print magazine which had a pre-pandemic circulation of 100k.
His inspiration, ironically, was London where he was living in his early 20s (during 2005-6). He was struck by how difficult it was to engage with the cultural side of the city: “You had to know people who held the information. There was no media adequately serving as a resource for the city. Especially online. When I returned to Melbourne, I found my city was going through an exciting cultural boom. The food culture, in particular, was booming. However, again, there was no media covering the city in a way that reflected it. So I launched Broadsheet… and found an audience that quickly adopted it. We launched Sydney two years later and are now across the five Australian capital cities, and in New Zealand. “
But (apart from working for a catering company in university and as a barista in London), Shelton had experience neither in media nor hospitality.
Broadsheet was launched with a A$20k bank loan (secured on his parents’ house). All the growth has been funded from cashflow. The business was soundly profitable in three years and is believed now to have A$10-12m revenue and A$2-3m of EBITDA. Some 85% of revenue is from advertising and 15% from branded product sales (of books, wine and art) and affiliate revenue.
Shelton retains 100% of the company which is now in the early stages of building membership (A$10 per month or A$78 per year). He expects the “Broadsheet Access” – which gets members into booked-out restaurants and sold-out shows – is to generate 30% of all revenue within three years.
Broadsheet employs 70 people (50 in Melbourne, 15 in Sydney), some 40% editorial. Over the past 12 years, it has produced lots of video and audio and has published five big-selling cookbooks. The site claims almost 2m monthly uniques and is credited with creating huge traffic for restaurants it recommends. It has also been responsible for its own pop-up restaurants and cafes.
Although the stylish web site covers all the lifestyle and cultural components of a city, food is at the heart of Broadsheet: “Our aim is not simply to tell you about a restaurant opening – we’ll spend time in the kitchen, chatting with chefs over the clatter of pans, and to the designers while poring over their drawings. What we’re excited about is not led by breathless hyperbole, but specifics. We don’t need to tell you your city has great cafes. But, by telling you who’s making them great, and why, and where you can find them, we want to add to your insight into what makes the city tick.”
But Australia and New Zealand may be just the start for Shelton who plans to internationalise his company: “We are looking very seriously at further overseas expansion. We believe we have a brand and a model that will work in any culturally rich market.”
Ironically, he’s been in London this month, just as Time Out prints its last magazine. Not many years ago, Nick Shelton shared always-learning lunches in the city with Tony Elliott. Will those memories inspire him to launch Broadsheet in the UK?
