Slaughter at the Source
By noderel:
noderel:
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Wowee, big blood letting at the Source. Man, it started with a phone call late Friday a couple weeks ago my time. Word that Source Interlink was taking the knife really deep this time around. Rumor has it that 12 more car magazines, and some reputed 6000 jobs got the axe [Ed - this info hasn't been confirmed, but we know it was brutal]. Included were Popular Hot Rodding and Rod & Custom, as well as such stalwart employees as Street Rodder tech editor Ron Ceridono. No mercy in the trenches.
All this in addition to previous cutbacks.
So, whoopee-do you say? Actually, it is a BIG DO, and it is just a reflection of the times they are a’changing.
Consider: Several years back, Source Interlink expanded from being a company owning most of the print media distributing business into a mega-company also owning much of the print media creation business. It was bordering on controlling a great deal of information. Then, in waltzes the internet and suddenly all the traditional game is thrown to the wind. Another place for information to come from.
But Source got too big for its britches, and all those corporate giggles have turned to groans, and it is left to the spin doctors to try and wiggle free of perceived reality. Enough to gag a maggot.
Essentially, TimeWarner got fed up with Source and pulled their contracts. It was reputed to be a sniggle over a miserly $7 million debt. Source was back in the little leagues, and now they are scrambling just to stay alive. Welcome to payback time!
So, just a bit of history here. Back a number of years, Pete Petersen put his automotive titles on the market, and a sale moved everything along for several hundred million dollars. That was at the time when there was a tremendous amount of speculative leveraged buy-outs taking place in the business world. At that time, we thought that the money Pete received was way big time. But not too long later the new owner of PPC sold it along again, but at a loss. Yada yada. Then in stepped a company to pay several billion dollars for the firm. Way uptown high finance here. That company took a hit on its big gamble, so next sale was back in the hundreds of millions. Eventually, along came Source Interlink, which had effective control of print media distribution to newsstands. More yada yada.
You can see how this could get convoluted very quickly, and we wondered at the time how the Feds would not step in to keep someone from gaining total control of the flow of free press. But they didn’t. Fast forward: this is the delimma that Sorce is in now. Too much debt, and a print market that is being dramatically assaulted by the internet. From the outside looking in, it would seem that Sorce needs to reduce debt and operating costs immediately.
In the past, buying up a publishing company usually meant consolidation of similar titles into sub-groups that could be sold along to defray purchase costs. But this time around, the internet presence has meant that buyers are not as readily available as in the past. Just speculation, but that seems to be where Source is right now. And they have compounded the problem to our sea of car people with an explanation that just floats at the edge of incredible.
You would need to read the official press release announcing the “realignment strategy” to begin to realize exactly how big a bunch of do-do they have fallen into. It will go down in history as a classic sidestep. For us in the automotive hobby field, it is going to go down as a giant misstep that will be a canker in our psyche for years to come. (Read the full release here: Source Interlink Rebrands as TEN, The Enthusiast Network.
Understand, we have too many car magazine titles as it is, and many of them have not been created to service the reader, but rather as an attempt to syphon off advertising revenue. You see, the problem is that Business America (indeed, the entire world) has fallen under the spell of global greed. Get in, scoop up the spoils, and then run. The problem is, any kind of hobby based information trading is not large enough to support such a model of effective(?) business practices. So it is that with the crash of the Source effort, our hobby will lose what has been a steadily eroding base of professionals. In short, it takes a very long term, in human years, for a person to gain the experience and knowledge to really do a good job of collecting and sharing automotive information.
Will what the spin doctors expound come to be? I very much doubt it. From the outside, it seems to be more of a desperation move just to keep the entire enterprise above water. Time will tell, and I sincerely hope to be wrong.
Now, the Source debacle has been renamed TEN, which is to mean The Enthusiast Network. Only now, the car magazine staffs have been cut to (often) a single individual. Incidentally, all this came just soon enough for me to get into it at the last moment in my biography. And I am not pulling any punches in laying out the situation, and the culprit for what amounts to simple murder, plunder, pillage, and rape! You, the hot rod enthusiast, are the victim. And only you, the supporter can stop it ! Choice is yours. Keep tuned for film at eleven.