EMAP plc

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EMAP plc

One Lincoln Court, Lincoln Road
Peterborough PE1 2RF
United Kingdom
Telephone: ( + 44) 1733 568-900
Fax: ( + 44)1733312-115
Web site: http://www.emap.com

Public Company
Incorporated: 1947 as East Midland Allied Press
Employees: 6,388
Sales: £880.1 million ($1.41 billion) (1999)
Stock Exchanges: London
Ticker Symbol: EMA.L
NAIC: 51112 Periodical Publishers; 513112 Radio Stations

EMAP plc is a world-leading publisher of specialty and business-to-business magazines, with such titles as FHM, Smash Hits, Hot Rod, and Motor Trend, and New Woman, acquired in 2000, among some 600 titles in all. EMAP’s magazines provide 86 percent (circulation and advertising revenues combined) of the company’s sales of £880 million. In addition to EMAP’s publishing wing, the company is one of the United Kingdom’s major private radio companies, including Kiss FM, Magic 105.4, and Metro Radio among its 20 U.K.-based AM and FM radio stations. EMAP has ventured into television as well, with its own music channel, The Box, in the United Kingdom; its EMAP usa division also produces a number of specialty channels. The company has built a strong presence on the World Wide Web, owning all or part of a variety of web sites for which it provides content from its magazine portfolio. Apart from its media interests, EMAP also serves as host to more than 40 trade shows and other specialty events. The strength of EMAP’s portfolio—and the weakness of its share price in 2000—has made it the subject of various takeover rumors, particularly by giants such as AOL and others eager to leverage EMAP’s extensive content holdings. Chairman Robin Miller and CEO Kevin Hand have consistently insisted on EMAP’s desire to remain independent.

Building a Magazine Empire in the 1950s

EMAP traced its origins to the late 19th century. In 1887, Sir Richard Winfrey purchased the Spalding Guardian, a local newspaper that provided the basis for the Winfrey family’s newspaper interests. The family added three more local newspaper titles in the early part of the 20th century. In 1947, Pat and Richard Winfrey led a consolidation of the family’s newspaper titles, merging the Northampshire Printing and Publishing Co. Ltd., the Petersborough Advertiser Co. Ltd., the West Norfolk and King’s Lynn Newspaper Co. Ltd., and Bury St. Edmunds, together with the commercial printing operations at Rushden, King’s Lynn, and Bury St. Edmunds, to form the East Midland Allied Press. By the beginning of the 1950s, East Midland Allied Press owned 17 newspaper titles.

In the early 1950s, however, East Midland Allied Press became interested in branching out into the magazine market. Eager to fill up its spare printing capacity, the company—by then led by Richard Winfrey—launched its first magazine title, Angling Times, in 1953. That magazine found immediate success, building a circulation of more than 50,000 by the end of its first year. Angling Times more than doubled its circulation over the next two years. By then, East Midland Allied Press had launched its second magazine, Trout and Salmon. In 1956, the company bought up Motor Cycle News for just £100. That title went on to take over its segment’s lead and became one of the company’s biggest and most consistent earners. The company completed the decade with a launch into a new direction, Garden News.

Through the 1960s, East Midland Allied Press continued to build up its magazine portfolio, adding five more titles, while increasing its newspaper titles to 19. The company also had taken on a new employee, Robin Miller, who initially joined Motor Cycle News as a cub reporter and then rose to editor of that magazine by 1970. But by the end of that year, Miller received a promotion, to the position of editorial manager. Two years later, Miller was joined by David Arculus. Together, Miller and Arculus developed a strategy for East Midland Allied Press’s growth, built around its specialist magazine offerings, as well as its local newspaper titles. Miller was named CEO and, later, chairman in the mid-1980s.

The company’s biggest break came, however, in the late 1970s. In 1978, the company was approached by editor Nick Logan, who had covered the punk scene for the New Musical Express. Logan had an idea for his own music magazine, a glossy that would print the lyrics to hit songs, as well as offering photos, posters, and pinups—and fulsome praise—of the day’s pop stars. The resulting magazine, Smash Hits, took the market by storm, becoming a smash hit of its own.

The success of Smash Hits propelled East Midland Allied Press onto a new publishing level and encouraged the company to step up its addition of new titles, resulting in the purchasing of titles such as Which Computer and Fleet News, as well as the launching of its own titles. The company, which changed its name to EMAP in 1985, also began to diversify, buying up business publications company MacClaren in that year. The following year, EMAP, which had already begun organizing the Fleet News Motor Show in the early 1980s, acquired Trade Promotions Services, expanding the company into the exhibitions market as well. In 1990, the company added to its business-to-business publications portfolio with the acquisition of Maclean Hunter. The downturn in the economic climate provided the opportunity for EMAP to go on a buying spree, and the company greatly expanded its magazine and newspaper titles in the early years of the decade.

Global Media Powerhouse in the 1990s

EMAP also made the move into the radio market in 1990, having agreed to back Gordon McNamee’s effort to transform his pirate radio station into a legitimate commercial station. McNamee’s success in winning a broadcast license gave EMAP a major stake in the station—Kiss FM—and a taste for more. By the end of that year, the company had purchased another radio group, Metro Radio.

EMAP also made its first move overseas—or at least, across the Channel—when it joined with joint venture partner Bayard Press to acquire the magazine title Le Chasseur Francais (the French Hunter). Placed in charge of building the company’s French base was Kevin Hand, who took over as CEO of the company in the late 1990s. Back in England, EMAP continued buying into the British radio market in 1991, acquiring the Liver-pool-based Radio City group and purchasing a stake in Trans-world Communications (acquiring full control in 1994), giving the company four more stations: Red Dragon in Cardiff, Red Rose in Preston, Piccadilly in Manchester, and Aire in Leeds.

In 1992, EMAP turned its attention to building its French position, launching its first wholly owned French title, Reponses Photo. Two years later, the company acquired a major stake in the French magazine market when its simultaneously acquired Editions Mondiale and Hersant, giving EMAP control of ten percent of the French market. After completing its acquisition of Trans world Communications, EMAP took over another major radio company, Metro Group, giving the company stations in Newcastle, Hull, Sheffield, and Teesside, and placing it among the United Kingdom’s leading commercial radio groups.

The company continued to build up its magazine portfolio, buying 14 titles from Canadian publisher Thompson, and a variety of other magazines, including several golf titles from the New York Times. Whereas most of its magazine titles met with strong success, the company was struggling with Smash Hits, which was finding itself outmoded during a time when the British youth market was itself a rapidly dwindling population (down more than 20 percent compared with the early 1980s). Successive revamping of the Smash Hits formula helped to win back some of the title’s former success.

Meanwhile, EMAP had continued to build its portfolio of local and regional newspapers. By the mid-1990s, the company’s titles had reached more than 65 and included the Stam-ford Mercury, one of the world’s oldest newspapers. By the mid-1990s the company’s other media interests had taken the forefront of the company’s future growth plans. Tight restrictions on the local and regional newspaper market in the United Kingdom also had made it difficult for the company to pursue further growth for that division. EMAP, therefore, decided to sell off its newspaper division, to Johnston Press, for £200 million in 1996. The sale enabled EMAP to continue a new round of acquisitions and growth in its other divisions, including the purchase of France’s CLT, giving it a number of French television listings magazines, including Tele Star, which, at two million copies each week, became EMAP’s biggest selling magazine and allowed the company to claim that one in every two French adults reads an EMAP publication.

EMAP also was finding success with another of its magazines, FHM. Originally a staid men’s fashion magazine, EMAP revamped the magazine’s format—keeping only the title—and transformed it into one of the United Kingdom’s fastest-growing men’s magazines, joining such titles as Esquire and Loaded. EMAP determined to use FHM as its flagship to go global— rolling out country-specific FHM magazines in Australia and Singapore. In 1998, also, EMAP began building its Internet presence, launching the EMAP Digital division

Company Perspectives:

EMAP’s corporate objective is to create one of the world’s most highly rated media businesses in terms of people, products and services, growing faster than our competitors and with operating margins of 20%. To obtain and maintain our market leading positions we will run our business aggressively, investing in our leading brands whilst innovating in both product and process. High margins and good cash flows are a measure of our success, but also enable the company to have a strong and stable platform for growth. Thus the profits generated will go to both reward our share-holders and to continued investment in launch and acquisitions in growth markets. Growth will also demand that we recruit, retain and reward the best people, and in return the quality of their enthusiasm and pride in their products will enable the company’s objectives to be met. Together we are building the most exciting media company in the world.

By the end of the 1990s, EMAP began to turn its attention to the United States market. In December 1998, the company made its entry in a big way, paying nearly £1 billion for Petersen Publisher Inc., a leading publisher of such titles as Hot Rod, Motor Trend, Sport, Teen, and many more titles. The addition of the U.S. company—renamed EMAP Petersen, then EMAP usa in 1999—made EMAP the world’s leading publisher of specialist magazines.

Petersen had been founded by Robert Petersen in 1948, a motor racing enthusiast who began selling his own magazine, Hot Rod, outside of track meets for a quarter a copy. The following year, Petersen launched another title—initially dedicated to the custom car market, but later transformed into a new car magazine, Motor Trend. While continuing to cater to the automotive and then sports markets, Petersen also splashed onto the youth market, with the launch of Teen magazine in the late 1950s. Teen continued to sell in the million-copy range into the next century. By the 1990s, Petersen—whose two sons had been killed in an airplane crash—sought to retire, and he sold his company to a consortium for US $450 million in 1996; it was taken public the following year.

At the end of 1999, newly named CEO Kevin Hand led EMAP on a reorganization, grouping its business around markets instead of by medium. As such the company formed several new “networks,” including EMAP Performance, grouping the company’s music-related activities, including its radio stations and Smash Hits and other music magazines; EMAP Automotive, grouping all of the company’s car, motor-cycle, and related magazines, events, and exhibitions; EMAP Active, which focused on sports and outdoor activities; EMAP Elan, which formed an umbrella for the group’s various lifestyle interests, themselves formed under subdivisions EMAP Mens, EMAP Wagadon, EMAP Esprit, EMAP Womens, EMAP Youth, EMAP Metro, and EMAP Fashion; and EMAP Health Network, including the company’s Here’s Health, Slimming, Nursing Times, and related activities.

The reorganization followed on the heels of a good year for EMAP; the company launched a French version of FHM, which itself followed on the strong-selling Australian version. EMAP determined to deploy FHM as an international brand, with further market-specific editions—including a Spanish-language version—planned for the early years of the 21st century.

The newly reorganized company started the new century with a bit of a hangover. Flagging advertising revenues in the United States had worked to depress EMAP’s stock price after the first quarter. The low share price—considered greatly undervalued by analysts—quickly led to speculation that EMAP could become a subject of an acquisition attempt, possibly by heavyweights such as content-hungry AOL or rival IPC, the magazine subsidiary of Reed Elsevier, which EMAP had unsuccessfully attempted to acquire in 1998. Nonetheless, Miller and Hand maintained their resolve to lead an independent EMAP into the new century.

By mid-year, 2000 was looking to become another successful year for the company: the February 2000 launch of the U.S. version of FHM had sold some 450,000 copies and steadied out at a respectable 130,000 copies per month. The company also made moves to increase its share of the worldwide women’s market with the purchase of New Woman and the rollout of “new” women’s titles such as minx magazine. The company also boosted its position in the U.K. radio market with the acquisition of the Melody radio station, renamed Magic 105.4. At the same time, EMAP moved to increase its stake in the booming market for Internet and other digital content, pledging to invest £75 million in 2000, and up to £250 million over three years, in building its digital enterprises portfolio. EMAP’s collection of magazines, radio stations, and exhibitions, as well as its growing collection of web sites and dot.com investments, gave it a head start toward achieving its plans to become one of the world’s dominant media groups in the 21st century.

Principal Divisions

EMAP Performance Network; EMAP Automotive; EMAP Elan; EMAP Esprit; EMAP Health Network; EMAP usa; EMAP Digital.

Principal Competitors

Advance Publications Inc.; The Hearst Corporation; Axel Springer Verlag AG; International Data Group, Inc.; British Broadcasting Corporation (BBC); IPC Magazines Ltd.; Bertels-mann AG; News Corporation Ltd.; Capital Radio plc; Pearson; Crain Communications, Inc.; Time Warner Inc.; Daily Mail and General Trust plc; The Times Mirror Company; United News & Media plc; VNU N.V.; Hachette Filipacchi Medias S.A.

Key Dates:

1887:: Sir Richard Winfrey acquires Spalding Guardian.
1947:: East Midland Allied Press is established.
1948:: Robert Petersen launches Hot Rod magazine.
1953:: Angling Times debuts.
1956:: Motor Cycle News is acquired.
1957:: Petersen launches Teen magazine.
1978:: Smash Hits debuts.
1985:: Company changes name to EMAP; MacClaren is acquired.
1990:: Company acquires Maclean Hunter and Metro Radio, and launches commercial Kiss FM.
1996:: EMAP sells newspaper holdings to Johnston Press.
2000:: Comany announces a £250 million digital enterprises investment plan.