UKNM: Re: Burn Rate

[Lee]

I worked for CMP Media (UK) when Burn Rate came out. It was required

reading among the UK staff because they were amused by the descriptions of

their then UK managing director and the Leeds family. Most of the

descriptions were just plain cruel, the kind of literately-expressed scorn

that newspaper columnists trot out but which don't really give you an

accurate insight into the world they are describing.


There were however, two ironies: Burn Rate presciently described one CMP

executive as "a toastmaster-general". He became the UK managing director

and subsequently left the company in circumstances that might typify,

well... a toastmaster-general. (He was replaced by the very capable and

much-loved-by-her-staff Sue Maddix - let no-one confuse the two!)


The other is that after a naive CMP over-valued and bought Wolff's database

of URLs, CMP spread the bulk of its print publishing business onto the Web,

then sold the lot to Miller-Freeman for an extraordinary sum (this summer),

and thus treated us to the sight of Miller-Freeman's UK management trying

to work out how to:


quantify what they had bought, 

value each component of what they had bought, 

make profitable what they wanted (CMP's web-sites and US print titles)

sell off what they didn't want (the UK print titles) to VNU


In that final step, we saw Miller-Freeman realising that some of the

web-sites it had bought were being built in the UK with UK content and that

it wanted to keep them after it had already negotiated to sell them to VNU

without realising it. Skipping a lot of detail, we subsequently saw VNU's

management realising that neither CMP nor Miller-Freeman had ever owned the

copyright of the much-valued BOFH strip (it was retained by its freelance

author - as detailed in this week's NTK at www.ntk.net) and that this

valuable part of the business would not be theirs after the sale.


I mention all this because it shows that CMP learned the hard way how to

value Web assets/business, but that neither Miller-Freeman's nor VNU's

management appeared to observed those leassons or to have read Burn Rate

before entering negotiations.


I suspect that many other publishers are making similar mistakes and will

continue to do so.


Lee Kimber

(former Technical Editor Network Week)

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