Critics Say Conde Nast Losses Lower Than Reported

Guesstimating just how much Condé Nast's advertising revenues have fallen has become the media parlor game of the week. Blame me for the latest round. On Monday, Condé Nast, the publisher of lavish luxury magazines we in the media tend to obsess over the most, announced the closing of four of its two dozen or so titles. That the iconic Gourmet magazine was among them was more stunning evidence of the severe pain this recession is inflicting on the publishing industry. Condé Nast's Times Square headquarters is likely to be the scene of further bloodletting in the coming days and weeks as the surviving magazines implement a corporate edict to chop budgets by a reported 25 percent.

Against this dismal backdrop, I tried to put a dollar figure on the financial toll that the closely held publisher might suffer this year. My starting point was data collected by the Publishers Information Bureau, which keeps title-by-title score of advertising pages and revenues. Magazines themselves provide the data that PIB reports. The advertising revenue comes straight from the publisher's ad-rate card. As I noted in the story, the rate card doesn't reflect the rampant discounting that magazines are desperately offering these days to try to lure advertisers. Likewise, I noted Condé Nast has a reputation for sticking to its rates. So after tapping on the keys of a calculator for a bit, I concluded the data indicated that advertising at Condé Nast's two dozen titles could decline by as much as $1 billion this year. Condé Nast's spokeswoman Maurie Perl declined comment after I informed the company of my estimate.

Reaction to the piece was swift and emphatic. "These numbers are stunningly inaccurate," said the first comment to the story. The zinger was posted by 24/7 Wall Street, which wrote with no hint of doubt that the PIB figures are off by 40 percent for most magazines. Condé Nast's number is "probably closer to ... 30 percent" because it adheres to the rate card, but does offer various other discounts—for example, for frequent advertisers.

This morning, my friend the widely followed media writer Keith Kelly of the New York Post was slightly more gentle in his column. "One flaw," he began, was that I based it on the PIB data. Kelly, too, noted that Condé Nast swears it doesn't discount off the rate card. But he also claims that the publisher's rate card has built-in "frequency discounts" and writes that several industry sources say "the real number is likely to be" $400 million to $600 million.

Obviously, given a choice of bitter medicine to swallow, Condé Nast mogul S. I. Newhouse would sip from the $400 million bottle and smash to the ground the $1 billion container that I offered up. He's the one person who knows with precision what the real number is. Mr. Newhouse, please end our mad parlor game and tell us the final score. I'm tired of being zinged.