Features
Bauer has left the building. What next for magazines in Australia?
Bauer has sold its Australian arm to investment firm Mercury Capital, signifying the next chapter in a tumultuous few years for magazines in this country. Here, CEO of Bauer Media Australia Brendon Hill speaks to Mumbrella's Vivienne Kelly about what the future looks like.
Are there more job losses to come? Is the carnage finally over? What will the new company be called? And what would he like to say to Bauer on their way out the door?
INTERVIEW:
Brendon Hill, CEO, Bauer Media Australia (BH)
Vivienne Kelly, editor, Mumbrella (VK)
VK: In the press release you were very upbeat about this being a new chapter and a positive for Bauer. But one of the perceptions that pervades sales to private equity is that all private equity want to to do is cut things up, slash them and sell them off. So what would be your response to the perception that this is going to be a slash and burn situation?
BH: Mercury Capital are an investment firm, and they have three big funds where they buy a lot of companies in those funds and hold them for a return – quite different to private equity.
VK: So you think they are going to continue to invest in and build the business?
BH: They told me they’re going to spend the next two to three months with the senior team and get to know the business really well, and then we’ll come back out with a strategy for the future and a long-term future growth plan for the business. But the deal’s just been inked, so they need a couple of months to get to know us all and get to know the business better, and then we’ll come back out with that.
VK: Will you be sticking around – or do you not even know the answer to that yet?
BH: Yes, I’ll be sticking around and the executive team will be sticking around. So, we’ve got a great team here, and the business is doing really well to be fair – albeit with the impact of COVID. But since we got Pacific we’re really poised for growth and the team’s really stable.
Bauer Media’s suite of brands
VK: I’m assuming you can’t tell me how much the sale was for?
BH: No.
VK: Well I had to ask.
Now you’re obviously going to have to rename the business. Any thoughts yet on what the naming or branding would be?
BH: Not yet. We just inked this, this morning.
But I’m delighted at the prospect of that. Bringing Bauer and Pacific together was never about buying Pacific – it’s the amalgamation of two great companies and two great lots of brands. So to have a new name and a fresh start is something that will be really positive for our team and for the advertising market, with a new narrative out there.
VK: Often when agencies merge, they just sort of weirdly combine the names of the two existing entities, so as long as you don’t call yourselves Pac-er or something, I’m sure it will be an exciting time.
BH: [Laughs].
VK: Speaking of the merger with Pac Mags, one of the concerns from the ACCC before they did eventually let the deal through, was that there was too much crossover between the titles. Now that you’ve got everyone together, how are you feeling about the multiple brands that you have, and how much they might crossover or cannibalise each other?
BH: Yea, look, as I said prior, they’ve always worked together. They’ve always been competitors and they’ll continue to be competitors. All of them have their own targeting for advertising clients, and all of them have their own audience targeting and so they work really well and they will continue to work really well. That hasn’t changed.
VK: Now a lot of people have lost their jobs throughout the COVID situation and obviously the acquisition of Pac Mags. How do you feel looking forward now? Are the job losses and the carnage for yourselves and the industry going to start to slow down, do you think? Are you seeing any greenshoots? Any reason for optimism?
BH: Yes. We have. The last three or four weeks, the advertising market has been a lot more buoyant. There’s been a lot more briefs and a lot more activity. The team are working around the clock trying to get as much money as they can. I think the market understanding our combined reach now and how we are the number one voice for Australian women – six and a half million readers of our mags, nearly nine million digital users, it’s a big reach – and hopefully that puts us in good stead to pick up some more of that money that’s targeting women.
And subscriptions have been growing amazingly through this period. And you can’t forget that because we’ve got print products, we’re an FMCG product as well, and our sales in supermarkets and newsagents have been excellent through this period as well.
I’m very bullish about the future. But then again, who knows, with COVID how long it’s going to carry on for, what long-term impacts it’s going to have. We’ve got to take it as it comes. But at the moment, there are some greenshoots out there.
The Bauer and Pac Mags brands will disappear
VK: And what about the digital side of things? Over the years, Bauer’s various digital plays have attracted some criticism. How do you think your digital strategy is at the moment, particularly with the Pacific assets as well?
BH: I think the scale we have there is really great. And I’d actually like to commend Bauer for the amount of money they invested in digital in this market. They have reinvested a lot of our profits into digital and really, when they bought us, we didn’t have a digital play at all. So there is a lot to be grateful for with how much they believed in that, and how much energy and time they put into building those products and those teams up.
So, we’ve got a good base there now, but we need to continue to evolve it and grow it and launch new products and services off the back of those audiences we have.
VK: Were there multiple buyers in the ring for this deal? I’m just interested why Mercury was chosen, or what they had to offer, compared to say other potential suitors?
BH: We’ve been in high demand for a while.
Anyone that has a look at any company, you let them have a look and work it through, and see what it’s like.
But there were a few interested parties and Mercury were best-suited to help us grow and transform us for the future.
VK: And when you delivered this news to staff – they’ve obviously had a tumultuous few weeks and months – what did you want them to take away from the news? What did you want the message to be?
BH: I wanted it to be a ‘thank you’ to Bauer, firstly, and what they’ve done for magazines in this country and how much energy and time they’ve put into it. Secondly, I wanted it to be a fresh start. A new name. Pacific and Bauer coming together to make a new company under new ownership is a great opportunity for all the staff. And I also just wanted to thank the staff for all their efforts during this period, because it has been hard – for all media companies it’s been hard – and they’ve been fantastic and I couldn’t ask for anything more.
VK: And what about a message to marketers who have only been reading negative news about the state of the media? What would be your message to them?
BH: Audiences are still there. And that’s across all media. TV numbers are up. Radio numbers are up. Digital numbers are up. Audiences are craving news and entertainment more than ever before. I think audiences are there, so it’s time to start investing in your brand. And when there’s not a lot of noise out there it’s a great opportunity to grow them and come through the other side.
Working in the industry for many years . ACP were very protective of the industry and its competitors. The demise for publishers like me was when we lost Network Services.
Sometimes I think more should have been done for the publishing industry to keep it afloat, like other industries.
This is just another nail in the coffin for the print media sector. The loser being the last one standing.
Good luck
Simon – Woodlands Publishing
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Spin, spin, spin.
Bauer destroyed the Australian magazine industry and obliterated the only way forward; Pacific’s successful digital strategy. They ditched the whole thing and sacked the entire Pacific digital team.
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What was Pacific doing so well?
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Chief survivor so far, Brendon Hill, says: “Mercury Capital are an investment firm … quite different to private equity.” But Mercury Capital’s website labels itself a private equity outfit where slash and burn is the way you make your profit. With so many Bauer and Pacific titles having spent a lifetime fighting over the same ground how can this nifty bit of ducking and diving end up being anything but a blood bath. Bring out your dead!
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It’s such a shame that you didn’t use this opportunity to ask Brendon some of the tougher questions that hundreds of former and current employees would want to know the answers to. The business logic for some of the recent decisions is understandable (albeit with upsetting results) but the way the whole situation was handled by Brendon and Bauer (and of course also by Pacific) was pathetic. This interview should have been more than an opportunity for him to praise Bauer and repeat the same rehearsed lines about the future of the company.
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I’m tipping Bauer was super keen to cut their losses and ditch Australia. Contrary to the interviewee’s claims, I suspect competition for the assets was close to zero. At a sharp enough price, Mercury will be able to eventually engineer a profit.
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90% of Pac revenue was print.
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You forgot to mention how much was Bauer’s.
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Reading this Four things immediately come to mind:
One, her mention of clients, team then her family, as a working mother, (mentioned again and again), why isn’t she putting family first, she should be! Sorry but the poor me attitude says it all.
Two, why can’t she promote someone in the business to do the job?
Three, you have the opportunity to ‘possibly’ earn $100,000 to $150,000! Yeah sure, I’m old enough and thankfully wise enough to know you will NEVER get the $150,000, (which reading glassdoor confirms).
Four, why the hell is wrong with Australian wines? Are NZ wines a client?
Come back in a year and interview the person who was ‘lucky’ enough to get the job, we’d all like to know.
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Would be interesting to know what clients think about this, if any are prepared to voice their support or if any now cut ties as a result.
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Be keen to see how this mob of financial engineers will miraculously turn around the fortunes of the declining magazine empire.
And who’s going to actually buy them out when they want to sell it off?
As previous commentator said, this is a game where the loser being the last one standing / last one to own the business before it folds
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Rebrand as Pacific Media going forward?
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