Time Inc. said Thursday that it has reached an agreement to sell Discover, its money-losing monthly science magazine, to Family Media, a New York-based magazine publishing firm, for $26 million.
The sale will end a frustrating seven-year experiment for Time, which struggled with changes in editorial format and bought the assets of two failing competitors in its efforts to sustain its smallest magazine. But though Discover's editorial content had won praise, the magazine never turned a profit, and it had recently lost money at the rate of about $10 million a year, according to publishing sources.
Time said its net after-tax investment in the magazine was $30 million. But sources said the pretax loss was about $60 million--far more than the $47-million pretax loss Time sustained in 1983 in its experiment with a cable listings magazine called TV-Cable Week.
The Family Media offer "is an incredible break for them," said a source close to the company. "They must be dancing in the halls over at Time Inc."
Subscription Lists Sold
General interest science magazines were among the hottest magazine categories between 1979 and 1981, when Discover, Science '81, Hearst Publications' Science Digest and Penthouse's Omni all made their debuts. But the magazines never attracted as many of the affluent readers as their publishers had hoped for.
Science Digest and Science '86, published by the American Society for the Advancement of Science, both closed last year and sold their subscription lists to Time.
The expected sale of Discover contrasts with less satisfactory outcomes that followed several other recent magazine ventures by Time, which is the nation's largest magazine publisher, as well as a cable, entertainment and book-publishing concern. In addition to the TV-Cable Week flop, Time last November abandoned a $30-million attempt to start a mass-market personality magazine called Picture Week.
Time is now concentrating on a variety of new special-interest magazines, with such titles as Real Estate, Parenting, Cooking Light and Women's Sports and Fitness.
Family Media, a privately held firm, publishes six monthly magazines: Health, 1001 Home Ideas, Homeowner, Savvy, World Tennis and Golf Illustrated. Jeremy Grayzel, Family Media president and chief operating officer, said the company hopes to turn a profit with Discover by relying on a smaller staff and taking advantage of lower overhead.
Discover "is not a failure, but the market is more confined than we had hoped," said Bruce A. Barnet, Discover's publisher. "There wasn't any event that could help the magazine, as high interest rates helped Money magazine, and as growing TV sports coverage helped along Sports Illustrated."
Growth in Sales
Barnet said Discover's sales and circulation have recently grown strongly. Circulation, 400,000 in the magazine's first year, is now about 925,000. Revenue was $6.9 million last year, compared to $6.3 million in 1985.
The new owners must overcome serious doubts about the category. "Time put a ton of money into it, put good editors on it, and it just didn't work," said David Lehmkuhl, vice 4president and magazine specialist at the N. W. Ayer ad agency in New York. "Now it seems like a really long shot."
Time and Family Media said they will hire some members of the magazine's staff, although some jobs will apparently be cut. The magazine's editor, Gilbert Rogin, who was brought in from Sports Illustrated in 1985 in an effort to resuscitate the magazine, will be reassigned to another position at Time Inc., as will Barnet.
"People thought Time might want to get rid of it, since we knew the magazine's finances were sort of shaky," said John Langone, a senior editor at the magazine. "But people here were surprised somebody made an offer for it."
Robert E. Riordan, Family Media's chairman and chief executive, gained a reputation in the magazine business by purchasing the money-losing Ladies Home Journal in 1982, making it profitable and selling it to Meredith Corp. in January, 1986, for $92 million.