Orange County Magazine Owner Changing Publisher

The owner of Orange County magazine and the company that published it have parted ways after failing to come to terms on a joint operating agreement that they hoped would resurrect the struggling publication.

Michael L. Heath, whose SV Publishing in Aliso Viejo has run Orange County magazine since April, said he was told on Tuesday that his company would no longer operate the publication. Thomas K. Scallen, the owner of the glossy home and fashion publication, and his company, Magazine Publishing Inc. in Minneapolis, are negotiating with a new publisher to run the magazine, Heath said.

Magazine Publishing, which owns Orange County magazine and California Homes & Lifestyles, had allowed Heath’s company to use the titles under a tentative joint-venture agreement. But Heath said Scallen changed the terms of that pact.

“It never materialized,” Heath said. “We just decided that, unless we could do the deal the way we originally planned, we wouldn’t do it. We should have never proceeded to put one dime into the publication unless we knew we had an agreement.”

Heath said that he spent $60,000 of his own money to produce a commemorative issue of the magazine last month and that the magazine was already $500,000 in debt when he took it over.

Recently, some employees have complained that they have gone unpaid or that paychecks bounced. Heath blamed that on the company’s previous problems and the dispute he had with Scallen.

“We’re very remorseful about it, and we’re working on rectifying that,” he said.

Scallen was traveling Thursday and could not be reached for comment.