Orange County Magazine’s Publisher Fired After Suing Owner

The owner of Orange County Magazine fired the publication’s co-founder Thursday and hired a Seattle sales executive to take her place, restructure operations and boost the magazine’s revenue.

Susan McFadden, who with her husband, Michael, started the magazine 11 years ago, was fired as publisher and managing officer by Thomas K. Scallen, a Minneapolis entertainment impresario who bought the magazine’s parent company two years ago.

McFadden’s dismissal came less than a month after the McFaddens sued Scallen for $654,000 on allegations of fraud and breach of contract.

Scallen, in the meantime, has tried to sell the publication but now says he has decided to restructure the company and continue publishing.

Nevertheless, the McFaddens and Norman Adams, a Newport Beach magazine broker, said they are still looking for buyers at Scallen’s behest.

Scallen’s new publisher is Mark Marth, 26, who had been Southern California sales manager for Craftsman Press Inc. in Seattle, the company that prints Orange County Magazine. He has been involved in the printing business for eight years.

Marth also becomes president of Magazine Publishing Inc., the company that owns Orange County Magazine and California Homes and Lifestyles.

The McFaddens’ lawsuit alleges that Scallen failed to pay the remaining purchase price of $397,874 for their 49% stake in the company and did not pay back $94,620 in loans that the McFaddens had made to the magazine in the last year to meet payroll and pay other bills.

The suit, filed in Orange County Superior Court in Santa Ana, also seeks punitive damages and $162,000 for the remaining value of Susan McFadden’s five-year employment contract.

Scallen said Thursday that he had not been served with the suit yet and could not comment on it. “I don’t want to be in a fight with anyone,” he said. “I don’t like going to court.”

The lawsuit is not the reason that McFadden was fired, Scallen said, but “when people start filing lawsuits, that doesn’t help.”

He credited the McFaddens for creating a “beautiful” magazine but said Susan McFadden was not handling the business side of the operation very well.

The monthly publication, which lists a paid circulation of up to 12,000 issues a month, has long been a money loser. McFadden said it dropped nearly $400,000 for the fiscal year ended June 30.

The McFaddens said Scallen knew that the magazine needed more money, and he simply has not put enough into it.

“Scallen’s hoping the new publisher will perform miracles, and I hope he does,” McFadden said Thursday. “But in my opinion, it’s a long shot. The magazine business is not exactly peachy keen now.”

Scallen is president of International Broadcasting Corp. in Minneapolis. The company’s holdings include the Harlem Globetrotters, the Ice Capades, amusement parks in New York state and metropolitan Detroit, a Minneapolis dinner theater and 19 ice-skating rinks across the nation.