Linda Johnson Rice

After nearly 70 years as a family-owned independent publishing firm, Johnson Publishing Co. Inc. (No. 30 on the BE INDUSTRIAL/SERVICE list with $120 million in sales) announced that it sold an equity stake in the company to JPMorgan Chase’s Special Investments Group (SIG). And while the undisclosed, but certainly multi-million dollar, infusion provides the company with much-needed capital to refocus the brand, it also marks the first time the family business has taken outside investment.

In an exclusive interview with BLACK ENTERPRISE, Chairman Linda Johnson Rice, daughter of founder John H. and Eunice Walker Johnson, says there was no trepidation about selling a portion of the company’s equity and giving another firm a voice in the business. “We have the management control and the operational control of the business,” asserts Rice. “I believe that not only are they [JPMorgan Chase] savvy investors but I think they will be strategic partners for us.” She also stated adamantly that there are no plans to sell a controlling interest in the company.

Johnson Publishing was founded in November 1942 by John H. Johnson and his wife, Eunice Walker Johnson, more than two decades before the de-segregation of the South. The company initially published Negro Digest (later renamed Black World) before launching Ebony in 1945 and Jet in 1951. The company later branched out to publish books written by Black authors and distribute the Fashion Fair cosmetics brand. In 1987, BLACK ENTERPRISE named John H. Johnson its Entrepreneur of the Decade. At that time, Johnson publishing was the largest Black-owned business in the U.S. with revenues of $173 million. Since the inception of BLACK ENTERPRISE‘s list of the nation’s largest Black-owned businesses in 1973, Johnson Publishing has been one of only three companies to appear on every roster.

But in recent years, the pervasiveness and availability of technology—particularly mobile phones and other devices with Internet capability—lead to a dramatic shift in the way the public consumes media content. As the amount of time the average consumer spent online increased, magazine subscriptions declined while advertising dollars chased those same consumers. This, combined with economic conditions that in recent years alternated between sluggish and toxic, left print publications of all shapes and sizes struggling to survive.

The end result: Scores of magazines have ceased publishing print products, including Portfolio, Travel & Leisure Golf, Teen and PC Magazine just to name a few. Others, such as BusinessWeek and Vibe were acquired by investment firms or other information providers.  “The fact is that these companies are so heavily invested in the print business—not just for the actual revenue—but [because] their infrastructure revolves around print,” says Matt Kinsman, Managing Editor for Folio, an industry publication. “They have all these systems in-house, they have this structure that’s all focused on producing a print product as opposed to something else.”

Ebony and Jet were among those publications that saw circulation numbers hemorrhage. In 2008, Ebony and Jet averaged 1,294,824 and 900,000, respectively, according to the Audited Bureau of Circulations, the industry standard. By year-end 2010, circulation dropped to 997,173 and 703,944, respectively. In the last five years, Johnson Publishing’s revenues dropped from more than $472 million to $120 million. Ebony was since redesigned and both publications replaced editors-in-chief. Other structural changes were made, including a workforce reduction, the sale of the building that served as the company’s headquarters for four decades, and the hiring of Desiree Rogers, former White House Social Secretary, as CEO.

Plans for the capital include building out Ebony’s digital presence, a redesign of Jet’s print product, a new website and an iPad app.  The company also plans to build up its e-commerce platform to sell products and merchandise related to its Ebony, Jet and Fashion Fair brands. “What this infusion of capital will do is let us speed up the rebranding of the cosmetics line and that could be anything from what products are offered to marketing dollars,” says Rogers.

Could the new model work? “Nobody really knows. Tablets and apps are said to be the new savior for magazines, too; but there’s only a handful of publishers who are actually making money on it at this point,” says Kinsman. “For the majority of publishers, magazines are still the majority of revenue, but it’s not really seen as a growth area. It’s going to pay the bills but it’s becoming more of a branding tool than as a revenue tool.”

Rice resigns as CEO but retains Chairman position

Linda Johnson Rice has stepped down as CEO of Johnson Publishing Co. (No. 22 on the BE Industrial Service Companies list with $200 million in revenues), publisher of Ebony and Jet magazines. She will remain chairman of the company, a post she’s held since 2008. Desiree Rogers, who was most recently White House Social Secretary has been chosen to serve as CEO in her stead.

Rice is the daughter of the late John Johnson who founded Ebony magazine in 1945. Joining the company in 1980, she served in a variety of roles. She took over company operations as president and COO in 1987 and was appointed CEO in 2002, assuming the title of chairman a few years later.

Rogers' appointment as consultant takes on a new definition

Rogers joined the Chicago-based publishing company this past June. She was hired as a consultant to assist with corporate strategy. Rogers achieved a level of infamy in December of last year when she took the fall for a couple trespassing at a state dinner hosted by the White House. She stepped down from her White House position in March.

Ebony and Jet are persevering during the recession; both publications underwent editorial and visual redesigns—Ebony in 2004 and Jet this year. But that doesn’t mean Johnson Publishing Co. has been without transition.

• The company lost its cofounder, Eunice Johnson, in January of this year, which prompted Ebony Fashion Fair, which she founded, to go on hiatus. There has been no word about when the company might resume its shows.
• In February, Magic Johnson Enterprises tried unsuccessfully to negotiate a deal to buy Johnson Publishing Co.
• Last month, author and magazine exec Amy DuBois Barnett was appointed Ebony’s editor-in-chief, replacing author and lifestyle coach, Harriette Cole, who stepped down from Ebony as creative director and acting editor-in-chief after more than three years in that position.
• Also in July, Anne Sempowski Ward, who had served as president and COO at Ebony since 2008 resigned her position after giving birth in May.

Anne Sempowski Ward has resigned from Johnson Publishing to spend more time with her family.

Johnson Publishing Co. announced Monday that Anne Sempowski Ward has resigned as president and COO of the media company. A replacement was not named.

“Anne has been a significant asset to our company and led key, corporate-wide initiatives for Ebony Jet, and Fashion Fair,” said Linda Johnson, chairman and CEO Johnson Publishing (No. 22 on the BE Industrial Service Companies list with $200 million in revenues). “During Anne’s tenure, we underwent significant restructuring and reorganization of the company. Her contributions have helped to position the company for the future.”

• Related reading: Amy DuBois Barnett to Helm Ebony Magazine

The company quickly dismissed rumors that consultant Desiree Rogers would replace Sempowski Ward, according to reports. “Ms. Desiree Rogers is not replacing Anne Sempowski Ward. As we’ve stated from the onset of her June 1 role, she serves as a strategic consultant for the company. She is not being considered for president and COO,” according to Folio.

Sempowski Ward said she will be joining her husband in a business-consulting venture and spending more time with their newborn.

“It has been a phenomenal privilege to be the first member from outside of the Johnson family to serve as president and COO of both the publishing and cosmetics divisions of Johnson Publishing Company,” said Sempowski Ward.

Sempowski Ward joined JPC in 2007 as the president and chief operating officer of Fashion Fair Cosmetics where she led all aspects of sales, product development, supply chain, and marketing. In 2008 she was promoted to her current position.

Since the beginning of the year, JPC, which publishes Ebony and Jet magazines has seen its fair share of shake ups and tragedy, beginning in January with the death of co-founder Eunice Johnson.  Since then, the company has hired Amy DuBois Barnett, who replaced Harriet Cole as editor in chief of Ebony, and former White House social secretary Desiree Rogers as a consultant;  and was almost acquired by Magic Johnson Enterprises.

Amy DuBois Barnett is the new driving force behind Ebony magazine.

Johnson Publishing Co. announced last week that Amy DuBois Barnett will become the new editor-in-chief of Ebony magazine.

Barnett was most recently the deputy editor-in-chief of Harper’s Bazaar magazine. Prior to that, Barnett helped run Teen People and was the first African-American woman in the country to head a major mainstream consumer magazine; she was also at the helm at Honey Magazine, where she doubled the circulation.

“I am extremely pleased to bring Amy DuBois Barnett on as part of the new leadership team,” said Linda Johnson Rice, chairman & CEO of Johnson Publishing (No. 22 on the BE  Industrial Service Companies list with $200 million in revenues). “She brings with her a wealth of experience, a keen journalistic eye and solid editorial judgment, which will serve well to help redefine the Ebony brand within the ever-changing marketplace.”

Barnett will be responsible for both the print and digital side of the magazine, and will replace Harriette Cole as the acting editor-in-chief and creative director.

“It has been an incredible journey and privilege to help build the Ebony brand during my tenure as acting editor-in-chief and creative director,” said Cole. “I am excited about Ebony’s bright future.”

Barnett is a Brown University graduate and also has a M.F.A degree in creative writing from Columbia University. She is the author of Get Yours: How to Have Everything You Ever Dreamed of and More, an NAACP Image Award-nominated book for black women.

Also last week Johnson Publishing, which owns Ebony and Jet magazines, said it had hired former White House social secretary Desiree Rogers a consultant to work on corporate strategy. Rogers served as the White House social secretary under President Barack Obama, making her the first-ever African American in that role. However, after a few missteps, she announced her resignation February 2010 and was replaced by Julianna Smoot.

Earvin "Magic" Johnson

Earvin “Magic” Johnson said Monday that talks to do business with Johnson Publishing Co., the publisher of Ebony and Jet magazines, are now dead.

“Recently, an affiliate of Magic Johnson Enterprises and Johnson Publishing Co. were in advanced discussions to do business together, but unfortunately we were unable to reach a definitive agreement,” the former Los Angeles Laker said in a statement.

The statement confirms rumors from last week that Johnson’s Magic Johnson Enterprises had an interest in investing in and possibly buying Johnson Publishing (No. 15 on the BE 100s Industrial Service list with $328 million in revenues).

Magic Johnson, who is not related to the Johnson publishing family,  has formed several strategic partnerships with companies such as Sodexo, Starbucks Corp., AMC Entertainment Inc., and Aetna. Johnson has also ventured into the financial services sector, and through the Canyon-Johnson Urban Fund committed nearly $1 billion in capital on the revitalization of ethnically diverse communities. He also licenses his name and likeness to companies such as Jackson Hewitt and furniture rental company Rent-a-Center, an endeavor that critics say discredits his goals to uplift the black community.
Ebony and Jet Magazines introduced the country to Black American life, fashion, and celebrities when John H. Johnson founded the magazine in 1942 on a loan from his mother’s furniture. The company is now run by Linda Johnson Rice, the founders’ daughter.

“I would like to salute Linda Johnson Rice and the Johnson family for pioneering the iconic brand of the Johnson Publishing Co., which we have all come to love and respect,” said Magic Johnson. “Ebony and Jet have been permanent fixtures on coffee tables in African-American homes for many years.”

Johnson said he will continue to look for opportunities to invest in African American media.

Earvin "Magic" Johnson

Earvin “Magic” Johnson, retired NBA star and businessman, has entered into talks to purchase Johnson Publishing Co. and possibly take the reigns of Ebony and Jet magazines.

If Johnson, who is not related to the Johnson publishing family, were to purchase the 68-year-old Johnson Publishing (No. 15 on the BE 100s Industrial Service list with $328 million in revenues), the transaction would infuse new blood into the company, says Samir Husni, director of the Magazine Innovation Center at the University of Mississippi at Oxford. “The business model that they started, like the rest of the magazines in this country, is no longer working, says Husni.

Sale rumors have been in the air since February 2009 when the company underwent a reorganization.

“There’s no definitive agreement,” said Eric Holoman, president of Los Angeles-based Magic Johnson Enterprises, in an interview with Bloomberg. Linda Johnson Rice, daughter of acclaimed publisher and JPC founder John H. Johnson, declined to comment. Magic Johnson did not immediately respond to requests for an interview.

Magic Johnson, the former Los Angeles Laker, has formed several strategic partnerships with companies such as Sodexo, Starbucks Corp., AMC Entertainment Inc., and Aetna. Johnson has also ventured into the financial services sector, and through the Canyon-Johnson Urban Fund committed nearly $1 billion in capital on the revitalization of ethnically diverse communities. He also licenses his name and likeness to companies such as Jackson Hewitt and furniture rental company Rent-a-Center, an endeavor that critics say discredits his goals to uplift the black community.

Like many other publishers, Johnson Publishing has faltered under the weight of the current economic crisis. Ad revenue at Ebony declined 38% to $35.5 million last year, according to Publishers Information Bureau. In an effort to boost revenue at Jet, Rice announced this month that Jet, a weekly, will be redesigned to include a new layout and content.

“As a world-class media company, we will solidify Jet’s position as an innovator and leader in the African-American marketplace,” said Rice, in the announcement. Rice became chairman and CEO in 2005 when John H. Johnson passed away.

Ebony and Jet Magazines introduced the country to Black American life, fashion, and celebrities when John H. Johnson founded the magazine in 1942 on a loan from his mother’s furniture.

Husni credits Jet magazine with sparking the national civil rights movement when it published the photos of the brutally mutilated body of Emmett Till in his casket in 1955. Till’s murder was racially motivated and the photos not only shed light on lynching in America’s southern states, but supercharged the magazine’s success.

“Reshaping our organizational design will help ensure that we continue to evolve with the ever-changing media landscape,” said Linda Johnson Rice, chairman & CEO, in a statement.

The changes are being put into place to continue the 67-year-old company’s “long-term success and ensure [its] future as the entire publishing industry navigates the tumultuous economic climate,” explained Staci R. Collins Jackson, a spokesperson at Johnson.

Jackson says that Johnson has not “laid off” any employees, and that Bryan Monroe is still employed with Johnson as vice president and editorial director for Ebony and Jet magazines, contrary to reports by other news outlets that his position had been eliminated.

Monroe was recruited by Rice in August of 2007 to provide a creative edge to the two magazines, help update the Website, and increase circulation by targeting a younger audience. Since he started, Ebony has launched a redesigned Website with a more contemporary interface. Prior to Johnson, Monroe worked as an assistant vice president of news at Knight Ridder before it was sold to McClatchy Co.

Circulation at Ebony, a monthly general interest magazine, increased by 3.5%, and circulation at Jet, a weekly news magazine covering entertainment, news and lifestyle stories of interest to African Americans, rose 2.2% through the first half of 2008. Their numbers were slightly better than the industry as a whole, which was flat for the same period, according to Neal Lulofs, senior vice president of communications at the Audit Bureau of Circulations.

On the other hand, year-on-year, ad revenue at Ebony fell by 18.8% and by 40.9% at Jet for the fourth quarter of 2008. Among media targeting ethnic populations, Johnson Publishing, the largest black-owned publishing company, is not alone in trying to survive the economic washout. Revenue decreased at Vibe magazine, an urban music publication, by 15.2%, and by 22.2% at Essence, a fashion, beauty, and lifestyle magazine targeting black women.

“The magazine business has been hit pretty hard by this very severe drop-off in ad revenue and difficulty at newsstands in the past year,” says Lucia Moses, a senior editor covering print media at Mediaweek. “Optimists say that year-to-year declines will start to ease in the second half of this year, but let’s face it, nobody really knows. It could get worse before it gets better.”

Indeed, general market publications are slashing jobs by the hundreds. Condé Nast, publisher of Vanity Fair, The New Yorker, and Vogue, has cut 5% of its work force and has shuttered Domino, a three-year-old home magazine, Time Inc. has let go more than 600 people, and Reader’s Digest purged 8% of its work force.

“If you look at the overall industry and what is being done to maintain jobs and maintain the bottom line, what is happening at Ebony and Jet is not unusual,” says Barbara Ciara, president of the National Association of Black Journalists. “We are seeing downsizings, pay freezes, and hiring freezes throughout the industry. We can’t hold up Ebony as the sacred cow that does not have some of the same issues regarding the economy as any other media entity.”

One account from Richard Prince’s Maynard Institute blog Journal-isms reports that Lynn A. Norment, Walter Leavy, and Malcolm West, three of the four managing editors at Ebony and Jet, are accepting buyout offers. Jackson would not confirm or deny that these individuals accepted buyouts, but affirmed that out of the 340 full-time employees, some did opt to participate in a voluntary early retirement package that the company offered in 2008 as one of the early initiatives of the multi-phase reorganization.

Ciara cautions all publishing companies to be strategic about whom they let go. “When you look at those salaries, [editors at the top] are an easy kill if you are looking to eliminate the most money from your budget,” Ciara says. “You have to ask yourself the value that those people bring to the development of your product and whether it is worth it to sacrifice them for plain economic reasons knowing that you still have a publication to put out. I hope that with whatever restructuring is happening that the content will remain a priority.”

“Reshaping our organizational design will help ensure that we continue to evolve with the ever-changing media landscape,” said Linda Johnson Rice, Chairman & CEO at the Chicago-based company.

The company would not give specific details about the reorganization, including what positions will be eliminated and employees who will be leaving the company.

The changes are being put into place to continue the 67-year-old company’s “long-term success and ensure [its] future as the entire publishing industry navigates the tumultuous economic climate.”

Year-on-year, ad revenue at Ebony fell by 18.8% and by 40.9% at JET for the fourth quarter of 2008. Among ethnic media, Johnson Publishing is not alone in the washout. The men’s hip-hop magazine XXL let go its editor-in-chief, Elliot Wilson. Revenue decreased at Vibe Magazine by 15.2%, by 22.2% at Essence Magazine.

Circulation at Ebony, a monthly general interest magazine, increased by 3.5%, and circulation at Jet, a weekly news magazine that covers entertainment, news, and lifestyle stories of interest to African Americans, rose 2.2% through the first half of 2008.  Their numbers were slightly better than the industry as a whole, which was flat for the same period, according to Neal Lulofs, senior vice president of communications at the Audit Bureau of Circulations.

Separately, Jackson says that Bryan Monroe is still employed with Johnson as vice president and editorial director for Ebony and Jet magazines, contrary to reports by other news outlets that his position had been eliminated.