Immediate Media, the UK subsidiary of the €3bn-revenue Burda, has appointed Sean Cornwell as CEO. He succeeds Tom Bureau, chairman (and also CEO of Burda International) who had been CEO since Immediate was formed in 2011 with the £121mn private equity buyout from the BBC. Burda acquired it for £275mn in 2017.
Cornwell, who joined Immediate in 2021 as chief executive of “platforms”, was formerly CEO of Direct Ferries and marketing director of Travelex, in addition to having held executive posts in Google and dating platform eHarmony.
At Immediate, he has overseen the growth of digital subscriptions, the launch of paid-for digital products in Food, History, and Gardening, and the 2022 acquisition of the £10m-revenue Nutracheck, the UK’s leading subscription weight-loss platform, said to have 350k paying subscribers.
His appointment as CEO will lead to further investment in all-digital media. Of course.
Immediate is the UK’s second largest magazine-media company (after Future Plc) with a print and digital portfolio that includes the country’s largest (and oldest) programme listings weekly, Radio Times, and the market-leading BBC Good Food, acquired for £32mn in 2018. It also publishes BBC Top Gear Magazine and BBC Gardeners World. In terms of a UK magazine market still dominated by newsstand sales, Immediate has a disportionately large subscriptions base, some 1m people. It claims to “engage” 75m global consumers across its platforms each month.
It is believed that the Radio Times printed magazine may still account for some 40% of the company’s profit, despite a 50% circulation fall in 10 years and a 25% decline in the last four. It may be surprising just how long paid-for listings magazines have survived (and thrived) in the UK in an era of free newspaper supplements, online listings and electronic programme guides. Radio Times certainly is a stronger brand (with more advertising) than its UK peers; crucially, 60% of its circulation is subscription. But it’s still a race to digital.
Immediate’s future depends – of course – on growing digital profits, not least from its legendary listings brand. But Sean Cornwell may be focused equally on the gilded BBC Good Food, in the hope that he can convert its 14mn all-media audience into consistent profit growth – in an online recipe market overflowing with free content. The Nutracheck acquisition may point the way towards “menu/recipe” membership, not just for weight loss.
The financials show how Immediate (which has de-merged Our Media, its £40mn-revenue specialist, Bristol-based subsidiary) needs to regain its growth momentum:
| Immediate Media* £mn | 2021 | 2020 | 2019 |
| Revenue | 174 | 153 | 188 |
| EBITDA | 44 | 36 | 40 |
| Margin | 25% | 24% | 21% |
Cornwell’s appointment this month completes the changes at the top of all the UK’s Big 4 magazine-centric companies this year.
Arguably, the biggest change is happening at the UK’s biggest magazine company.
Last month, Jon Steinberg the founder of Cheddar News and former president of BuzzFeed, moved to London to succeed Zillah Byng-Thorne as CEO of Future Plc. The company has tripled profits in the past three years – and 14x since 2018:
| Future Plc £mn | 2023* | 2022 | 2021 | 2020 |
| Revenue | 790 | 825 | 607 | 340 |
| EBITDA | 250 | 272 | 196 | 93 |
| Margin | 31% | 33% | 32% | 27% |
Steinberg is a star recruit and underlines Future’s determination to intensify digital growth especially in the US. But he is also expected to de-clutter the business (including, perhaps, reducing the 100-magazine print portfolio) and create some new international brands, presumably from The Week (currently published in the UK and US), TechRadar and in the entertainment, wealth and homes sectors.
He may have to be patient.
The 2022-23 half-year results, released yesterday (18 May) underline the current challenges, with revenue flat and operating profit down 3%. eCommerce (33% of revenue) is off by 10% – a reality check after the pandemic WFH tech boom. The downbeat forecasts (reflected in our estimates above) spooked investors. Despite a stunning nine-year transformation under Byng-Thorne, the setback has jogged investment analyst memories of how (a quite different) Future collapsed – more than once – in financial crisis during the first decade of the century.
But almost everything about the company and how (and where) it makes its profit is different. Future is a new company with an old name. But analysts can be forgiven for pondering past crises. The corporate history was the elephant in the room when Jon Steinberg introduced himself (and the disappointing numbers) this week.
Future shares lost some 10% after yesterday’s profit warning. It now has a £1bn market cap – less than one-third of its peak. And its £390mn debt is now 40% of the market cap. The company was keen to underline its healthy cash generation and its acquisition success. Notably, TI Media magazines (acquired for £140mn in 2020) may generate some £45mn of EBITDA this year – almost doubled in the three years.
Investors have been warned that full-year profits will be towards the bottom of market expectations. They may be half-expecting a further downgrade later in 2023. Some were surprised that this week’s alarm was not accompanied by a program of cost savings – not least to insulate the company against further macroeconomic shocks. That may yet come during what will not be an easy six months for the new CEO.
The profit fallback has consequences.
Investors (and especially the disruptive activities of short-selling speculators) will test the commitment and navigational skills of Future’s new management team. There may be more turbulence.
But the publisher has the brands, passion-fuelled content, technology, and ‘high intent’ audiences it needs to become that transatlantic leader in specialist video and text media. Despite the economic headwinds.
It’s different for Hearst.
Although Hearst UK is not a listed company, many of the same pressures on digital advertising, eCommerce and audiences will be felt by Katie Vanneck-Smith who this year became its fifth CEO in 14 years.
Like Cornwell and Steinberg, Vanneck-Smith – the longtime News Corp newspaper executive and co-founder of Tortoise “slow news digital” and podcast publisher – is “new” to magazines. She is also one of the few Hearst UK CEOs not to have had an advertising sales background, significant for a publisher that – like most others – must now increase its revenue from readers.
The financials show the challenge for the the CEO even in a family-owned company with legendary strategic patience, whose US and international earnings have shifted profitably towards business and financial information:
| Hearst UK £mn | 2021 | 2020 | 2019 |
| Revenue | 129 | 116 | 141 |
| Op Profit | 5 | (9) | 2 |
| Margin | 4% | — | 1% |
Vanneck Smith’s marketing-readership CV implies a commitment to expansion of the Hearst Institute testing operations and of Good Housekeeping, Hearst’s most profitable brand on both sides of the Atlantic. Could its highly-rated product reviews spawn a new membership brand? Could Hearst start to build B2B research and data services to mirror the US parent’s expansion? What can it do to maximise earnings from food and recipes, even more a core resource for Hearst than for Immediate?
The German-owned Bauer, once the runaway leader in UK magazines, faces other challenges.
It has more than 30 print and digital brands right across the specialist, women’s, and mass market. Like his Hearst counterpart, CEO Chris Duncan was formerly at News Corp. Since 2020, he has led a subtle but steady pruning of the long tail of minor brands. He reports to ex Axel Springer and RTL executive Jan Wachtel, recently appointed president of its worldwide publishing business comprising 400 magazines and 100 digital products in Germany, the UK, Poland and France.
Wachtel is one of a number of senior appointments at the €2bn-revenue Bauer Media following the appointment of Paul Keenan as group COO after almost two decades variously as UK CEO of the publishing and fast-growing radio operations which had been acquired from EMAP in 2008. Last year, he appointed ex BBC executive Richard Dawkins as president of Audio, which – in 2021 – may have achieved €550m+ of revenue and some €150m of profit – perhaps 30%+ of the entire Bauer Media Group – and 45% of its international profit.
Bauer is Europe’s largest commercial audio group with more than 100 radio brands across the UK, Ireland, Poland, Slovakia, Denmark, Sweden, Finland, Norway and Portugal.
What does that mean for its legacy of magazines?
It is notable that – less than a decade after the once so-private, family-owned business lost A$600mn on a disastrous acquisition in Australia and New Zealand – Yvonne Bauer’s seven-person management board now includes no fewer than three Brits. Big change from the years when strategy was decided at the family Sunday lunch in Hamburg.
But change is what’s happening right across the UK’s four leading magazine companies. In their own ways, the new CEOs all signal changes in emphasis, including ramping up paid online subscriptions and cutting print budgets. More acquisitions, divestments and innovation are on the way. Presumably, we won’t be calling them ‘magazine groups’ for too much longer. Buckle up.
