Buzz Magazine Folds Suddenly Amid Money Woes

Reducing Los Angeles’ city magazines to one, 8-year-old Buzz magazine closed suddenly Tuesday after mounting losses prompted the majority owner to file for bankruptcy.

Employees in Buzz’s West Los Angeles offices were assembled Tuesday, informed that Buzz was closing and asked to clear out of their offices by day’s end. The magazine’s June issue, already completed, will be Buzz’s last.

Buzz’s majority owner, Sharon Chada, said in a phone interview Tuesday: “Editorially, we were definitely going in the right direction. Unfortunately, there are also business considerations in life.”

Chada said negotiations to sell Buzz’s assets to Los Angeles magazine, which is owned by Fairchild Publications, a unit of Walt Disney Co.’s ABC, began recently, after it became obvious that Buzz was not going to be profitable any time soon. Chada said she invested more than $2 million in the magazine since taking control last fall.

Buzz filed for bankruptcy under Chapter 11, which allows the company to reorganize. But Chada said there is no plan beyond the sale of subscription lists and trademarks to rival Los Angeles magazine.

Chada emphasized that she expects to be able to pay the thousands of dollars owed to freelance writers for recent stories. “It’s not a question of if, just when. Payments have to be approved by the court,” she said.

The closing ends a troubled tenure for the lifestyle magazine, which was the only remaining competition to 38-year-old Los Angeles magazine. After seven years of ownership by Thai media mogul Sondhi Limthongkul, former technology executive Chada bought control last fall. Though Chada tried to refocus Buzz and institute some belt-tightening measures, she said she couldn’t save it.

“It turned out to be too little too late,” said Richard Natale, who edited the Buzz Weekly calendar listings supplement until that publication was shuttered in late March.

“There will be a void,” Natale said. “I think the combination of the two magazines performed a service. They were striking a nerve, especially among those with sizable incomes.”

Despite Buzz’s desirable readership demographics--its average reader had an income well into the six figures--it had long had a hard time attracting sufficient ad revenue. According to Chada, Buzz’s ad revenue increased 40% in 1997. Monthly paid circulation was running about 136,000 last year, just 15% behind Los Angeles. But Buzz already had a negative net worth of $11 million when Chada took control.

Meanwhile, Chada’s former firm, Santa Monica-based Osicom Technologies, has continued to lose millions of dollars. Chada and her husband, Osicom CEO Parvinder S. Chada, jointly control about 15% of Osicom shares. On Monday, Osicom reported a loss of $16 million for the fiscal year ended Jan. 31; that’s on top of nearly $15.6 million in losses the year before. Chada said, though, that Osicom’s fortunes were not a factor in her decision regarding Buzz.

Buzz founding Editor Allan Mayer, who left the magazine over a dispute with an investor in October 1996, expressed sadness at the magazine’s demise.

“The Buzz I knew actually died some time ago,” said Mayer, now a senior vice president at public relations firm Sitrick & Co. He added: “Still, you never like to see a publication shut down. It’s a sad day.”

Scott Kaufer, who had been a contributing editor to Buzz and a former editor of California magazine (which itself shut down suddenly in 1991), also expressed disappointment at Los Angeles’ seeming inability to nurture more than one city magazine.

“It’s vexing,” said Kaufer, now a television writer and producer. “I don’t think there’s any reason why this place can’t have a good city magazine, but it doesn’t seem to ever have had one for very long.”

Indeed, Buzz joins California, L.A. Style and several other Los Angeles-based magazines that have failed over the last decade.