Just what is happening at Prometheus Global Media? The company that owns The Hollywood Reporter and Billboard appointed Dottie Mattison as CEO on Monday after quietly terminating Richard Beckman on Friday.
Few in the media were made aware of the news, but that may be because it’s not a pretty picture over there.
Beckman was fired after he was pushed aside a year ago when ad sales in the upscale fashion and luxury category did not materialize for Prometheus' revamped, glossy The Hollywood Reporter.
TheWrap spoke to two individuals with knowledge of the company who say that The Hollywood Reporter will lose $6 million in 2012. That is not hard to believe, given the thin number of ad pages that populate the magazine most of the year.
To be sure, Hollywood likes the magazine, and credit goes to editor Janice Min for making it a lively, attractive read. But with only 12,000 paying subscribers – according to several insiders – out of what they claim is a circulation of 70,000, the business model is not working.
So the burning question for Mattison is: who will pay for those losses going forward? And what is the strategy for turning things around?
Prometheus turned down a request by TheWrap to interview Mattison. And in a news release obtained by TheWrap on Tuesday, the company gave no indication of what strategy will rescue the $70 million investment made by Guggenheim Partners, led by Jimmy Finkelstein (above left) and Todd Boehly (above, right).
Finkelstein did not respond to an email seeking comment, but a Prometheus publicist said in an email: "The Hollywood Reporter is profitable... as usual u are incorrect in reporting on this company."
By insider accounts, Mattison has been basically running things since late last year. But other than that, her strategy won’t be based on past media experience, since Mattison comes from clothing retail (really).
The executive joined Guggenheim Partners in October 2009 after overseeing Wal-Mart's global apparel operation. During that time, she developed a diverse portfolio of private clothing brands and relocated Wal-Mart's apparel business to New York City.
“I have worked closely with Dottie over the last year and cannot imagine a better CEO for Prometheus,” Finkelstein, chairman of Prometheus Global Media, said in the news release.
“She not only has a tremendous business background and extraordinary leadership qualities, but she also brings a deep understanding of media. I am thrilled she has accepted the position and look forward to working with her as a colleague and friend."
But that’s not what insiders are telling TheWrap.
“Dottie is aloof. She is brutal in her communication style. The staff is panicked, they all have their resumes out on the street,” said one executive who works with Prometheus, speaking on condition of anonymity.
The executive added: “Todd has unmitigated faith in Dottie, who everyone else thinks is incompetent. Guggenheim isn’t stupid, but they have no experience with media.”
Executives were frustrated when Mattison brought Lionel Richie, a star in his heyday 30 years ago who was releasing a comeback album, as Billboard’s guest to SXSW, a youth-oriented music festival in Texas. Boehly has similarly angered staff at Billboard by imposing the '80s MTV VJ Downtown Julie Brown as host for its online video division, the insider said. Earlier this year, Billboard lost its publisher, editor and a number of other editors and staffers.
Finkelstein was running THR for several months last year after Beckman was eased into another position.
Two senior Prometheus executives have recently resigned, Doug Bachelis, vice president of marketing for the Billboard Music Awards, who went to Newsweek-Daily Beast, and Doug Ferguson, general manager of digital for Ad Week, who joined Blip Networks in June.
The financial situation at Adweek and Billboard is not a lot better, according to the individuals who have seen the books.
Adweek, having burned through Michael Wolff as editor, is losing money, according to the two insiders.
Billboard, which was in profit when Prometheus acquired it, is on the decline, with only the Billboard Music Awards television license providing significant growth.
I called Richard Beckman to find out his view on all this. He kindly wished me a Happy Fourth and hung up.
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