Entrepreneur Magazine, the fast-growing publication for start-up businesses, is in joint venture discussions with a Swiss publisher and several other overseas media companies, Chairman Peter Shea said Wednesday.
The discussions are aimed at assuring the long-term financing necessary for the company's continued growth, Shea said, and a deal could be announced within the next couple of months.
He said the talks are aimed at forming a 50-50 joint venture or some other type of partnership arrangement. Shea confirmed that he has been talking with Omni Group, a New York-based publishing arm of the diversified Swiss conglomerate Omni Holdings, as well as other firms in Europe and Asia.
Shea acknowledged that cash flow is "tight" but denied that the company is facing serious financial problems. He said the magazine's revenue for the fiscal year that ends June 30 will reach $26 million with operating income of $3 million, the highest in the company's history.
Entrepreneur earlier this year launched Entrepreneurial Woman magazine, and Shea said the new publication is being evaluated on an "issue by issue" basis. The fourth issue has already been printed, he said, and advertising is being sold for the fifth issue.
Tom Delaney, publisher of the Delaney Report, a New York-based media newsletter, said the fact that Entrepreneur is seeking partners suggests that there are some financial strains. "You don't talk to people about partnerships unless you have to," he said. "Why take somebody on unless your cash-flow isn't that strong?"
He noted that the magazine business is experiencing difficult times and that many publishers are in search of partners. But Shea said the severe national advertising slump has not affected Entrepreneur, which draws most of its advertising from franchisers and "business opportunity" vendors.
He said that ad lineage was up over the last quarter and that the trends at the magazine are running converse to what the industry is doing. Delaney said, however, that ad lineage is not always a good measure of performance because it does not reflect the cost of selling the ads.
Entrepreneur, founded 13 years ago, has survived some previous rough spots. It was in bankruptcy when Shea and several partners purchased it in 1986. But this year, the magazine is the fastest-growing in the country, Shea said.
The latest annual report by the Audit Bureau of Circulation put the circulation of Entrepreneur--a glossy monthly--at 307,826.