Out, Advocate Troubles Follow Years of Stumbles
Have nation’s two biggest LGBTQ magazines survived on luring greater fools?
BY DUNCAN OSORNE
In a 1996 story reporting that Michael
Goff, the editor-in-chief and an original
founder of Out, was leaving the LGBTQ
magazine four years after it launched,
The New York Times said Out was “one of the
most infl uential and widely read gay and lesbian
publications in the nation.”
That was the buzz that Out’s editors and
publishers thrived on for years. The magazine
wanted to be the gay equivalent of Vanity Fair
or Vogue. Out wanted to be seen as a player
like Tina Brown’s now-defunct Talk magazine.
What that desire ignored is that if gay men
want to read about fashion or the lifestyles of
the affl uent, they read Vanity Fair or Vogue.
Even if they were willing to buy yet another
lifestyle magazine, never enough of them were
buying to make the business model of a gay
Out has been plagued by fi nancial problems
since its earliest days. The recent departures of
Phillip Picardi, Out’s editor-in-chief, and Zach
Stafford, the editor of The Advocate, Out’s sister
publication, fueled speculation that Pride
Media, the current owner of those two publications
and three others, is headed for bankruptcy.
Women’s Wear Daily (WWD) fi rst reported
on the Picardi and Stafford resignations. WWD
has chronicled the recent fi nancial problems
at Pride Media, but those problems are longstanding
and, in Out’s case, have troubled the
magazine almost since it was founded.
Out had a single backer at the start — Robert
Hardman. His family once owned a chain
of small newspapers that it sold to The Boston
Globe. That sale made Hardman wealthy, but
he continued working on the copy desk at the
Globe. Over time, he loaned more than $5 million
to Out. That debt was an insurmountable
burden on Out’s balance sheet.
“The only thing that blocks it from making
a substantial amount of money, a profi t, is the
debt,” Hardman said in 1999. Out had a small
profi t in 1997. It had a small loss in 1998, and
similar results were expected in 1999, according
Henry Scott, who headed the magazine beginning
in 1996, stepped down in 1999. While
a press release that quoted him and Hardman
praised his leadership, Scott said in an email
he sent to friends at the time that the magazine
had been put up for sale. Liberation Publications,
the parent of The Advocate and other
publications, bought it in 2000 for an undisclosed
sum. That sale was ironic.
In 1998, Scott had hired James Collard as
Women’s Wear Daily fi rst reported on the departure of Phillip
Picardi as editor-in-chief of Out last week.
Out’s editor-in-chief. When Collard resigned
just over a year later, Scott, in a press release,
said Collard had “established Out as the best
and most provocative publication in the largely
stagnant world of gay and lesbian media.”
Responding to Scott’s jab, Judy Wieder, then
the editor-in-chief at The Advocate, noted that
Collard had presided over an 11 percent decline
in circulation. Following the sale, Out’s
editor-in-chief, whoever that would be, would
report to her.
Out and The Advocate were now linked.
While Out appeared to cut back on the extravagant
spending that was evident in its earlier
years, that had the effect of reducing the
glamor for advertisers and readers. And both
publications were being challenged by free content
on the web, as was every other publisher,
and the ability and willingness of advertisers
to reach an LGBTQ audience by means other
than the LGBTQ press.
Liberation was the last owner with a background
in and a commitment to journalism.
The magazines were eventually sold to a series
of what economists might call greater fools or
Out’s sister publication, The Advocate, is also losing its editor-inchief,
buyers who were driven by irrational expectations
as opposed to a realistic judgment of the
market value of the publications.
In 1995, PlanetOut debuted as “the fi rst comprehensive
service geared to the social, entertainment,
educational and political interests of
a vast and varied community of gay men, lesbians,
bisexual and transgender people,” the
company’s press release said.
PlanetOut did attract some private funding,
but it never achieved the scale to make it attractive
to Wall Street over the long haul. The
company, though, was able to go public, which
it did in 2004 with an initial public offering
of 4.7 million shares at $9 per share. The IPO
raised $41.8 million on the NASDAQ exchange
where it was listed with the LGBT ticker symbol.
That cash allowed PlanetOut to buy Liberation
Publications in 2005 “for $24.0 million in
cash and approximately $7.1 million in sellerfi
nanced debt. PlanetOut will also reimburse
certain prepaid and other expenses totaling
approximately $1.0 million,” the company said
in a press release, which continued, “PlanetOut
intends to fi nance the cash portion of the purchase
price with cash on hand.”
Lowell Selvin, then the chairman and chief
executive offi cer of PlanetOut, said in the press
release, “This transaction will further advance
➤ OUT/ ADVOCATE, continued on p.19
December 19, 2019 - January 1, 2 12 020 | GayCityNews.com