NEW YORK, United States — Condé Nast and Condé Nast International are no longer independent companies.
On Tuesday, the publisher announced that Condé Nast chief executive Bob Sauerberg will step down. He will be replaced by a global chief executive overseeing both the American business, based in New York, and Condé Nast International (CNI), based in London.
Jonathan Newhouse, current chief executive of CNI, will step down from that role, becoming chairman of Condé Nast’s board of directors, effectively stepping into the role the late Si Newhouse held for 40 years before he passed away in 2017. Despite speculation earlier this year that Newhouse may be moving Stateside to oversee the business, he will remain in London.
“The role of Chairman of the Board of Directors is a position of vital importance which my long experience with Conde Nast has prepared me, almost uniquely, to take on,” Newhouse said to BoF via e-mail.
Other senior executives, including CNI president Wolfgang Blau, who has overseen a digital transformation of the international businesses in London, will remain in their current roles.
The publisher does not plan to merge the staffs of any more magazines at this time, reports the Wall Street Journal. In August, the publishers announced plans to combine Condé Nast Traveler’s US and UK editions into a single global team, under a single editor-in-chief.
There has been speculation that the publisher might continue in this vein on the editorial side, appointing global editors-in-chief for each magazine. But Newhouse said, “there is no likelihood of this scenario; it is not under consideration.”
The merger also makes Condé Nast a potentially more valuable entity should the Newhouse family decide to sell. In response, Newhouse said, "Conde Nast is not for sale and will not be for sale."
While the US business is unprofitable, CNI generated £121 million ($154 million) in revenue in 2016, as per its most recent filing, with a profit of £4.3 million ($5.5 million).
With the US business facing heavy losses in a challenging print and digital media market, Condé Nast and CNI have been setting the stage for a more formal merger this year, with US-based executives exiting as a result. In October, the companies announced plans to form an integrated product and technology team to create a single, global platform for all of Condé Nast's websites. The team would report to both Sauerberg and Blau, with Condé Nast’s chief digital officer Fred Santarpia exiting.
In the past, Condé Nast and CNI followed different, competing strategies and emphasised that they were independent companies even though both are subsidiaries of the Newhouse family’s Advance Publications and controlled for decades by Si Newhouse, the chairman emeritus who died a year ago. His cousin Jonathan and nephew Steven announced Tuesday’s merger together on behalf of the board.
But as the brands that Condé Nast and CNI lead — Vogue, Vanity Fair and GQ, among others — become more global, and the market for advertising dollars more competitive, there are benefits to breaking down international barriers, leveraging a global audience to advertisers and sharing more resources internally. In London, for example, Blau has set up a global hub for Vogue’s many international websites (excluding the US).
“What has become clear is that our aspirations are no longer best served by our historical structure of running two separate companies,”said Jonathan and Steve Newhouse in a joint statement on Tuesday. They thanked Sauerberg for his contributions to the company over the last 18 years, including the past eight as president and then chief executive. During his tenure at the publisher, the former consumer marketing executive launched the video division Condé Nast Entertainment and, earlier this year, announced a multi-year turnaround plan to develop new revenue streams and cut costs. Last year, the company lost a reported $180 million, and hopes to be profitable again by 2020.
“Operating as one global company will only help us realise our ambition to deliver the highest quality journalism, experiences and value to our audiences, advertisers and partners,” said the Newhouses. “It will also create new opportunities to enhance the collaboration among colleagues around the world.”
Stay tuned for updates to this story.