Action Sports Group - Again Through The Revolving Door

The news of Source Interlink's Chapter 11 Bankruptcy came as no surprise. Though intimate details of their business are not yet public the industry rumor mill has been steadily implying that all was not well with some of the Action Sports Group's (ASG) titles for some time. No doubt this uncertainty has been amplified by the larger financial issues the economy has faced in the last six to nine months.

Judging by some of the opinionated and often entertaining comments found on Transworld Business, it would seem a sure thing that titles like Skateboarder and Snowboarder Magazine are destined for the grave. Yet before that impending doom becomes reality a certain fact should be kept in mind.

Since the late 90s what is now known as the Action Sports Group has been owned by five different parent companies. And for those interested in history, here goes...

Originally the privately held Surfer Publishing Group, which bought Surfer Magazine from founder John Severson in the late 1960s and came to own the enthusiast magazines Surfer, Snowboarder, Skateboarder, Bike and Powder, was acquired in August of 1998 by Peterson Publishing based in LA. Founded in 1948 by Robert Peterson, the company had become a powerhouse in magazine publishing through the years, distributing such top ranking titles as Teen, Hot Rod, Motor Trend and Guns & Ammo.


John Severson - founder of Surfer Magazine (photo: Westand)


Amazingly, within just five months it was announced that Peterson (now owner of Surfer Pubs) was to be acquired by British publishing conglomerate Emap. One might ask why Peterson would buy Surfer Pubs only to sell to Emap months later? Background sheds light on the scenario.

According to the L.A. Times, in 1996, Robert Peterson relinquished control of his company to a Chicago-based private equity firm for a cool $450 million.


Robert Peterson - L.A. magazine magnate

In hindsight it seems clear that the equity group, while savvy businessmen, had no particular passion for publishing. Through a series of acquisitions that included Surfer Pubs, they bolstered Peterson Publishing's equity and readied it for resale. It paid off, too, because the transaction of Peterson to Emap, in January of 1999, went for $1.2 Billion, netting an approximate (and tidy) 300% profit.

Emap, which then had divisions in the U.K., France, Germany and Australia, and was well-known for its popular men's leisure title, FHM, saw Peterson as a great entry vehicle to expand into the U.S. market. This is supported by a statement at the time by Michael Beebe, an analyst at Goldman, Sachs & Co. in New York. "Petersen has very little international exposure. Emap would gain exposure in the U.S."


Gretchen Bleiler getting plenty of exposure in FHM's "Women of Winter X" feature a few years back.

Despite its excess of expertise in international publishing, Emap couldn't seem to pull it together in the US. Speculation leads one to assume the dot com boom and bust had a part to play. Regardless by July 2001 Emap threw in the towel and sold off its interests to yet another large publishing entity, Primedia, for $505 million--less than half of what they'd paid for Peterson Publishing just three years prior. Ouch!


Primedia coined the phrase "ASG"

Primedia, owner of such famed titles as Seventeen and New York, seemed to get things right--at least somewhat. It rebranded Surfer Pubs into Action Sports Group as part of its "Enthusiast Division" and brought on rival Surfing Magazine. It then steered the collective ship for almost six years before eventually selling for a hefty profit to yet another buyer for $1.2 Billion in May of 2007.

Enter Source Interlink - a company controlled by the equity firm Yucaipa Cos., of which former President Bill Clinton was once a partner, and whose majority shareholder, Ron Burkle, made his fortune in the grocery industry. Not exactly action sports gurus. For two years Source made a go of it, but buried with debt and certainly battling the hemorrhaging of print revenue to online finally declared Chapter 11 this past Monday.


Bill Clinton and Source Interlink guru, Ron Burkle, parted ways in 2007.

Whew...quite a saga. So where does that leave ASG and its beloved titles? Who knows... it's easy to imagine that cost reduction efforts may result in title closures, though it's equally plausible that yet another optimistic (or perhaps naive) media outlet will jump into the swirling waters of action sports publishing in an attempt to make a go of it.

For the sake of history, staff and fans of the involved magazines, it's hoped that the latter is the case.

Stay tuned...




By James Sullivan