(FinalCall.com) – Despite rising ad sales and circulation numbers in an industry where others were taking a nose dive, Vanguarde Media, publishers of Savoy, Honey and Heart & Soul magazines, filed Chapter 11 bankruptcy November 25 and liquidated all assets of the company, effective immediately.
“While this is no easy decision for any of us, our most recent efforts at securing funding proved unsuccessful, and we are no longer able to sustain operations,” said Keith Clinksdale, chairman and CEO of Vanguarde Media.
“The last several years have been difficult for the publishing industry and for Vanguarde especially, like all independent publishers. Our decision is in no way indicative of the phenomenal strength of the urban media marketplace, and I look forward to creating other opportunities to reach this most influential audience.”
The announcement came as a shock to the Black community.
“Approximately 70 full-time employees will lose their jobs, including many NABJ members who stepped out on faith to pursue their dreams,” said Herbert Lowe, president of the National Association of Black Journalists (NABJ).
“This is not only a huge disappointment for them but for our community, as well,” said Mr. Lowe, a criminal courts reporter at Newsday in Queens, N.Y.
NABJ, a longtime advocate of Black journalists and proponent of Black entrepreneurship in media, is troubled by the lack of diversity in magazines. To address these issues, NABJ is launching several initiatives, including meeting with magazine leaders and reaching out to Black journalists in magazines, offering training and support.
“With so few voices for and by African Americans, the closure of the Vanguarde publications is another tragic loss for the magazine industry and Black journalists nationwide,” said Bryan Monroe, NABJ vice president for print and assistant vice president for news at Knight Ridder. “Who will step up to replace Vanguarde and speak for and about us? We should be adding voices, not silencing the few out there already.”
“Magazines are already woefully underrepresented by Black journalists–a fact that is suddenly reinforced by the loss of Vanguarde,” Mr. Monroe said. “Let’s all hope the industry works hard to find jobs for the scores of talented Black journalists who now find themselves out of work. We’ll be watching.”
Growth in the midst of loss
“Vanguarde was building its business in a magazine industry that has struggled with dramatically lower advertising revenue due to the downturn in the economy. Throughout this period, Provender Capital Group has provided the primary financial support to the company,” explained Vanguarde’s major stockholder, Provender Capital Group, LLC, led by CEO Frederick O. Terrell.
“The company’s plan for growth required additional financing in 2003. However, the environment for raising capital for a young company remained difficult this year and the sources of capital are limited. As such, it was the fiduciary duty of the company’s board to support a decision to file for bankruptcy protection.”
Sagging ad sales wasn’t the problem with Vanguarde Media, however. Roland Martin, editor of BlackAmericaToday.com, reported that, “for the first ten months of the year, according to Publishers Information Bureau, Heart & Soul’s ad pages were up 39.9 percent to 421.6 pages; Honey’s rose 9 percent to 500.9 pages, and Savoy’s rose 18.1 percent to 454.5 pages. Circulation for the largest title, Honey, was 419,621 for the first six months of the year.”
Not only were ad sales going up, according to Mr. Martin, “its three titles generated more than $32.2 million in advertising revenues for the first ten months of this year. The magazines had growth anywhere from 26 percent to 46 percent in revenue over the same period in 2002. This (occurred) at a time when magazines in general are recording only 9% growth in revenues.”
While things were going up at Vanguarde, other publications were going down. According to Mr. Martin, “Grace, a publication for full-figured women, shut down after only eight issues. Book, a magazine backed by Barnes & Noble went through $6 million in three years, and the large book retailer wasn’t interested in investing additional dollars with no sign of profitability in sight.”
“A&E closed the six-year-old Biography magazine after failing to find a
buyer and Worth, an upscale personal finance magazine, closed its doors in
Vanguarde Media was started in 1999 by Mr. Clinksdale who left Vibe magazine to start the new company. The move was heralded and The Washington Post called him “The boy wonder of Black magazine publishing.”
The struggle to survive
Mr. Martin told The Final Call, “There are three significant factors that affect the success of Black publications: the need for capital, adequate advertising sales and support from the Black community.”
“It’s expensive to run and operate a magazine. You have to have the ability to access capital. The magazine may generate close to $500,000 in advertising sales, but you have to wait for the check. In the meantime, bills have to be paid. You become dependant on cash flow.”
He explained that advertisers are not respectful of Black publications and they don’t receive the ad dollars that they deserve.
“BET never got the advertisers commensurate with the audience that it had. Advertisers value certain viewers and readers; they pay more to publications that have 32-year-old White male readers than to a Black audience.”
He also says the Black community must also support Black publications.
“The African American community is not fully supportive of these publications. One magazine shouldn’t have to serve all the needs of the Black community. We have to support them. We say we want more voices speaking from our community, but we don’t support them.”