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Conde Nast to Buy Disney Unit

Publishing: Fairchild will be sold for about $650 million, source says. The deal is part of entertainment giant's refocus on core assets.

August 21, 1999|JEFF LEEDS | TIMES STAFF WRITER

Walt Disney Co. has agreed to sell its Fairchild Publications unit to Conde Nast Publications Inc. for about $650 million, a person familiar with the deal said Friday.

The decision to sell Fairchild, which publishes titles such as Women's Wear Daily, the fashion industry trade publication, as well as Jane and W magazines, comes as Disney Chairman Michael Eisner has been under pressure to jump-start the company's lagging stock and earnings.

Eisner and Disney Chief Financial Officer Thomas Staggs recently have tried to pare about $500 million from Disney's costs while focusing on its core assets, the film studio, television network and theme parks.

Along with the possible sale of Disney's hockey and baseball franchises, the sale of Fairchild has been under consideration.

But the deal doesn't divest Disney from the publishing business. In fact, it comes as Disney's Miramax Films is investing as a 50% partner in Talk, the new magazine edited by Tina Brown. The other partner is Hearst Corp., which had also been in the bidding for Fairchild, according to published reports. The sale also does not include Los Angeles Magazine, a person familiar with the sale said.

For Conde Nast, which is a unit of Advance Publications Inc. and is run by S.I. Newhouse Jr., the newly acquired titles bolster an already prominent position in the magazine market. Conde Nast, which publishes Vogue, Mademoiselle, Vanity Fair and the New Yorker, also stands to take a larger slice of the fashion advertising pie. Apparel and accessory advertisers spent more than $1.04 billion on magazine ads last year, according to the Publishers Information Bureau.

The agreement was first reported in Friday's New York Times. Spokesmen for the companies declined comment.

Burbank-based Disney acquired New York-based Fairchild, which employs about 780 people, in 1996 as part of its purchase of Capital Cities/ABC. Disney had planned to sell the unit but reversed itself in early 1997 despite what it described as strong interest from buyers. At the time, Disney said it had decided Fairchild's position in consumer magazines could be "a strong platform to launch new magazines."

But the company did sell off four newspapers it bought in the Capital Cities acquisition.

Disney shares closed at $29.88, up 50 cents on the New York Stock Exchange.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

How They Stack Up

Disney's sale of Fairchild Publications would combine some well-known magazines under one owner.

Conde Nast

Glamour

GQ

Mademoiselle

The New Yorker

Vanity Fair

Vogue

Wired

Fairchild

Footwear News

Home Furnishings News

Jane

Los Angeles Magazine*

Supermarket News

W

Women's Wear Daily

* Not included in the deal

*

Bloomberg News was used in compiling this report.

* BENEFITS SUIT

Disney has agreed to settle a class-action lawsuit on medical benefits for thousands of retirees. C3

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