Bauer ready to axe magazine luminaries

Bauer Media is identifying which staff to lay off following the family-owned media group’s merger with Pacific Magazines.

New Idea is changing hands

Bauer Media is identifying which staff to lay off following the German family-owned media group’s merger with arch rival Pacific Magazines, from the Kerry Stokes-controlled Seven West Media.

The $40m deal, which was announced last month, will bring several dozen glossy magazines, including New Idea, Australian Women’s Weekly and Woman’s Day, under one roof if Australia’s competition regulator gives the green light next month.

There will be duplication in many roles, particularly back office, and some editorial roles once the marriage is sealed, and it is understood Bauer is “starting to define the roles post-merger”.

Pacific bosses are understood to have been given the job of informing the relevant staff, including some “relatively senior people” across editorial that oversee a few magazines.

Pacific consists of 12 print magazines, plus four online-only publications. Chief executive Gereurd Roberts is widely expected to be appointed Seven’s digital boss after more than three years running the division. In comparison, Bauer has about 60 magazine brands, including Harper’s Bazaar, TV Week, Good Health and several parenting and automotive publications. Bauer is understood to be in exclusive talks with private equity firm Mercury Capital to sell its newly enlarged magazines business.

Bauer entered the Australian media market in 2012 by acquiring Kerry Packer’s ACP Magazines for $500m, a deal described by the then Bauer chief executive, Matthew Stanton, as a “long-term commitment” for the brands and people.

Private equity firms usually embark on aggressive cost-cutting in a bid to boost earnings by up to 20 per cent over about five years. Some media assets are attractive to private equity because they can secure cashflow from businesses operating in a challenging environment.

Bauer CEO Brendon Hill, who took the helm at the end of May from Paul Dykzeul, did not comment. During Mr Dykzeul’s reign, he consolidated the print and digital teams within Bauer, and bought brands including News Corp’s Inside Out, Country Style and HomeLife.

In its statement to the ASX on October 21, Seven said the sale was expected to be completed by the end of the year, subject to the Australian Competition & Consumer Commission’s approval.

An ACCC spokesman declined to comment, as the review was continuing.

If the tie-up is approved, News Corp Australia’s magazine division, which consists of Vogue, Vogue Living and GQ, will be its main rival. News Corp Australia also publishes The Australian.

Seven will receive $6.6m of advertising across Bauer Media assets over three years.

Bauer’s major cost-cutting helped the group swing to a net profit of $6.3m last year.