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Lampoon to Be Sold; Red Ink Can’t Be Laughed Off

TIMES STAFF WRITER

National Lampoon Inc., that humor-meister of print and film that fell off the laugh track in recent years, has agreed to be acquired by video distributor J2 Communications in a stock swap worth about $4.7 million.

“We thought the best thing to do was to find a strategic partner to really grow this company,” said producer Daniel Grodnik, who took control of the money-losing company last year with actor Tim Matheson.

The two were made co-chief executives, and part of their mission became finding new capital for the Los Angeles firm, which publishes the National Lampoon magazine and produces movies. The company’s latest hit was last year’s “National Lampoon’s Christmas Vacation,” starring Chevy Chase and Beverly D’Angelo.

“Lampoon is really on the skids . . . and yet the potential of that company is just fantastic,” said James P. Jimirro, chief executive of J2 Communications. National Lampoon will become a division of Los Angeles-based J2 if the merger is approved, and Matheson and Grodnik, who own 13% of National Lampoon, will continue to head it, the companies said.

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National Lampoon Inc. has not made a dime since 1982, and Matheson, 42, and Grodnik, 37, face the decidedly unfunny task of regaining all that was hip and humorous about the Lampoon of old.

“All magazines are fragile. A general-interest magazine is tough, and a humor magazine is even harder,” said magazine analyst James T. Kobak, who has watched the industry for years at his Darien, Conn., consulting business. “Humor changes. . . . They have to hit the stands fast and make an impression.”

National Lampoon, which now is published every other month, reads rather like Mad magazine with sex. Included in the April issue, a parody of the Sports Illustrated swimsuit edition, are features titled “The Lost Bar Mitzvah of Jesus Christ” and “TV’s Reluctant Nice Guy: Pat Sajak’s Dark Secret.”

Matheson and Grodnik said they are about to begin redesigning the 20-year-old magazine with the help of new Publisher Michael T. Carr and new Editor Billy Kimball. The reborn Lampoon should appear by the end of the year, the executives said.

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“The reason the company has had hard times is it lost its vision and it lost its dream,” said Matheson, who starred as Otter in Lampoon’s comedy hit “Animal House” in 1978. For the first nine months of 1989, the most recent period for which financial information is available, National Lampoon Inc. lost $915,000 on revenue of $3.8 million.

“We’ll lose money before we make money,” Matheson said. “A turnaround is a long-term thing.” Circulation for the New York-based magazine has risen to 250,000, up 30,000, since the two took over a year ago, he said, noting that the latest issue has 40 ads, compared to 10 in a less recent issue.

Under J2, National Lampoon hopes to expand its motion picture and television operations and to enter the video and merchandising arenas, said Jimirro, a former president of the Disney Channel who founded J2 in 1986.

Under the letter of intent signed by the two companies, National Lampoon shareholders would get two-thirds of a share of J2 common stock for each Lampoon share. They would also receive a warrant worth at least $1 for more J2 stock. J2 closed Friday at $3 in over-the-counter trading.

Perhaps reflecting the uncertain value of the securities involved in the transaction, National Lampoon’s stock slipped 37.5 cents in over-the-counter trading Friday to close at $3.125.

The transaction, which is expected to be completed in May, must still be approved by the stockholders of both companies.

NATIONAL LAMPOON AT A GLANCE

Three Months Ended Sept. 30, ’89 Sept. 30, ’88 Revenue $1,382,300 $1,208,900 Net inc. (loss) ($435,300) ($109,200) Net loss Per share ($0.28) ($0.07) Avg. shares outstanding 1,553,427 1,550,427

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Nine Months Ended Sept. 30, ’89 Sept. 30, ’88 Revenue $3,829,800 $3,229,700 Net inc. (loss) ($915,000) ($386,300) Net loss Per share ($0.59) ($0.25) Avg. shares outstanding 1,552,920 1,550,427


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