Sign of The Times: Stereophile’s Parent Company Declares Bankruptcy
According to Bloomberg.com (see http://www.bloomberg.com/apps/news?pid=20601103&sid=aDmRedq9AdQo&refer=us), Source Interlink–the parent company of 5.0 Mustang & Super Fords, Lowrider, Street Chopper, Soap Opera Digest, and Stereophile (among others)–“sought bankruptcy protection as it moves to become a private company.” Bloomberg says that Interlink “hasn’t reported a profit since the second quarter of 2007…Under an agreement with lenders, about $1 billion of existing debt will be canceled and about $100 million additional liquidity will be provided, Source Interlink said. The company said a lender-approved plan of reorganization will be filed.
What, if anything, this means for the future of Stereophile is unclear. In response to a question on the Web site “Audio Asylum” (see http://www.audioasylum.com/forums/critics/messages/4/42778.html) about whether the bankruptcy might impact the mag, editor John Atkinson said; “No. It is business as usual and perhaps better than usual as with the parent company’s debt burden significantly reduced, there may well now be increased investment in its properties, like Stereophile.
Home Theater Review.com reports (see http://www.hometheaterreview.com/av-news/parent_company_of_stereophile_home_theater_mag_files_chapter_11003672.php) that “according the New York Post, [Citibank] will own upwards of 80 percent of the company’s stock which is priced at about 15 cents per share on Tuesday morning.” It also speculates that “while its doubtful that Stereophile and Home Theater will just go away, some of the associated costs, additional web sites and many of the writers on staff could become victim of today’s brutal economy.
From bitter experience at Fi, I know that financial woes are particularly difficult for low-liquidity enterprises like magazines to weather. I guess we will see what we will see. But that times are hard for every part of this industry–and likely to get harder before they get better–is today plainer than ever.
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