Investor Buys ‘Passive’ Stake of 17% in Plaza

A New Jersey investor and publishing executive purchased on the open market a 17% stake in Plaza Communications, a Newport Beach publisher of two financial magazines, according to documents filed with the Securities and Exchange Commission.

Theodore Cross, whose holdings include interests in at least six publications aimed at the financial community, said his $600,000 investment is a passive one and does not signal a future takeover attempt. Plaza Communications founder and chief executive Tolman Geffs, who controls 50.1% of its stock, said the company is not for sale and that he has held no discussions with Cross regarding a future sale.

However, Cross’ investment does come at a crucial time for Plaza Communications. The company, founded in 1977 to publish a magazine for stock brokers called Registered Representative, is struggling to firmly establish its second publication, Personal Investor magazine. The six-month-old publication is aimed at affluent families who need investment advice for their savings accounts, as well as for their Individual Retirement Accounts.

Ambitious Goals

When it was unveiled late last year, Personal Investor’s ambitious goals included an immediate paid subscription of 150,000, a monthly publication schedule and the ability to sustain editorial offices in New York and production facilities in Newport Beach. But Geffs admitted that the magazine’s goals have proven a bit too lofty and that the company lost more than $2 million in the fiscal year ended July 31 as result of the publication’s start-up costs.

So far, he said, the magazine, which competes against such well-established publications as Money, Business Week and to some degree, the Wall Street Journal, has earned a paid subscription list of about 100,000, about two-thirds of the original goal.

Furthermore, in an effort to save money as well as maintain tighter control over management of the editorial operation, Geffs shut down the New York offices and fired the magazine’s editors and reporters. Responsibility for writing and producing the magazine was given to the Newport Beach-based staff of Registered Representative.

Finally, Geffs said that beginning next month, Personal Investor will shift to six issues a year, from its current monthly publication schedule.

“We should have started in the slow lane, not the fast one,” Geffs said. “I had forgotten how sensitive people are to how a magazine looks and feels rather than how often it appears.”

One Staff Used

Under the new arrangement, Lauri Brannon serves as editor of both Registered Representative and Personal Investor and the same staff of writers turn out articles for both magazines. “There are some subjects you only need to understand once but you can still write two separate articles,” Geffs explained.

Priscilla Meyer, the magazine’s first editor who was fired after preparing its initial edition last February, agreed that the original plan to write Personal Investor on the East Coast and print it on the West Coast “was a disaster.”

However Meyer, who now writes a money-management column for the New York Daily News, disputed Geffs’ contention that the same staff of writers can prepare two separate magazines with two separate readerships, especially audiences as diverse as professional stock brokers and amateur investors.

“It’s ridiculous,” she said. “But I have to believe that it’s not going to be done this way permanently.” Geffs declined to speculate on future plans for the magazine, saying only that the magazine’s goal now is to establish itself in the competitive market.

Despite Plaza Communication’s intense attention to Personal Investor, it was the company’s Registered Representative magazine that attracted investor Cross to the company, he said.

“It’s a good property and the most interesting part of the company,” he said. “I don’t even know about Personal Investor.”

Cross, 61, who met with Geffs last week in New York, owns a majority interest in Dealers Digest Inc., the publisher of four trade publications for the banking, stock brokerage and Wall Street communities. He is also listed as editor in chief of Bankers Magazine and Business and Society Review.