Reader's Digest bankruptcy report
The publisher of Reader's Digest, the country's most popular general interest magazine, said today that it will file for a federal bankruptcy reorganization, the AP reported. Reader's Digest Association Inc., owned by a New York private equity firm since 2007, said major lenders agreed to erase some of the $1.6 billion in debt they hold in return for an ownership stake.
Reader's Digest was founded in 1922 as a collection of condensed articles from other publications -- in a sense, it was a print precursor of Google News. But it has struggled recently as the recession and the Internet sapped advertising strength. I bet the magazine was also losing its audience. In my mind, it was a staple of doctors' offices and seniors' homes, but I can't picture it in the hands of younger readers. (The magazine is certainly not the only publication to have problems; Tribune Co., which owns The Baltimore Sun among other newspapers, also is in a bankruptcy reorganization.)
In June, Reader's Digest announced it would cut the circulation guarantee it makes to advertisers from 8 million to 5.5 million, lower its frequency from 12 to 10 issues a year, the AP said. In the second half of 2008, the U.S. edition of Reader's Digest had circulation of 8.2 million -- 12 percent below circulation a year earlier.








Comments
How does this affect the pension fund. I believe the foundation is indepent of RDA but who contols the pension plan?
Posted by: Edward Gumala | August 17, 2009 5:14 PM
Edward, there doesn't seem to be an easy answer about pension funds. The U.S. Department of Labor says that a bankruptcy reorganization "may or may not affect your pension or health plan. In some cases, plans continue to exist throughout the reorganization process.
"When your employer files for bankruptcy you should contact the administrator of each plan or your union representative (if you are represented by a union) to request an explanation of the status of your plan or benefits. The summary plan description will tell how to get in touch with the plan administrator.
"Questions that you may want to ask include: Will the plan continue or will it be terminated? Who will be acting as plan administrator of the plans during and after the bankruptcy, and who will be the trustee in charge of the pension plan?"
For more info from the Deaprtment of Labor:
http://www.dol.gov/ebsa/newsroom/fsbankruptcy.html
Posted by: Dave | August 17, 2009 5:30 PM
It's a magazine I read when I lived at home with my folks, but never thought I needed a subscription to later on - though they gave me one as a gift.
Still interesting to thumb through, but reprinting articles that were already published - how long ago? - is not a good model for those who make regular use of the Internet.
The population that might see something for the first time when it hits RD is shrinking. My dad is in a care facility, and really wants a new laptop - they even have WiFi!
Posted by: Charlie | August 17, 2009 5:42 PM
"losing it's audience"
Please. "its audience." The rule is really very simple. Use the apostrophe only when you mean "it is."
Al Pratt
Longstanding member of the punctuation police.
Posted by: Allan Pratt | August 17, 2009 7:08 PM
Allan, you're right. I corrected it. I'm glad you noticed that before my wife and daughter did. I never would have heard the end of it.
Posted by: Dave | August 17, 2009 7:46 PM
What about all the sweeps they run? Are they still going to be honoring those?
Posted by: cjlk@yahoo.com | August 18, 2009 3:50 AM
cjlk, I'm no bankruptcy attorney, but I expect that the sweepstakes debts will be treated like other debts owed to banks, suppliers, etc. All the folks who are owed money get in a line, and the ones whose lending agreements included collateral are at the front. Usually, eveyone winds up with a fraction of the money they were owed, and then the business continues.
Posted by: Dave | August 18, 2009 9:15 AM
Wow. We always had Reader's Digest when I was growing up. My mother's aunt gave us a subscription every year for Christmas. I started off reading the humor and then moved into articles.
I remember, one day when I was 10 or so, reading in the Digest that a baby that had been kidnapped in NJ! I was telling my mother the story when she gave me the squinty look and asked, "Was this baby named Lindbergh?"
Posted by: Eve | August 18, 2009 9:24 AM
In the little Kansas towns where I grew up, Reader's Digest was probably the first publication that cultured families subscribed to. Highbrows had Reader's Digest condensed books on their living room shelves and a piano somewhere in the room. If a minister stole jokes from Reader's Digest for his sermon, a goodly number in his congregation knew the source. Reader's Digest was, in fact, something that many millions of Americans had in common. Old issues and condensed books were a staple at yard sales.
What the world desperately needs, as newspapers lay off reporters in droves, is a publication called "Free-lancers' Delight" that accepts every free-lancer's every proposal and pays top dollar. Perhaps TARP could subsidize it. To save space, submissions could be condensed.
Posted by: Patrick K. Lackey | August 18, 2009 6:49 PM
How will this effect the Readers Digest
Select Editions? I like having the book to read. These books encourage authors to write. They are so enjoyable, and I have enjoyed reading them for many years.
Posted by: Elle | August 20, 2009 1:40 AM
When I was 7, I chanced upon a whole year's collection of RD that my elder brother had. The unfailingly crisp editing and wide variety of penmanship styles on offer fueled my interest in an editorial career. RD placed me on the path to 15 years of journalism, and made me what I am today -- an over-the-hill behemoth writer! Just like RD!
RIP (Rest In Purgatory), RD!
Posted by: Hardly | September 1, 2009 3:14 PM