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DONE DEAL: On the same day that the U.S. portion of the $919 million Hearst and Lagardère deal closed, Hearst Magazines wasted no time naming Esquire publisher Kevin O’Malley the new publisher of Elle.
O’Malley, who spent the last eight years at Esquire, gets the job that has been a topic of speculation in the publishing world since the beginning of the year (and a job that Hearst Magazines president David Carey and publishing director Michael Clinton have been discussing with many candidates for months).
Hearst executives wound up selecting the familiar player, even if he has had no experience with women’s magazines. Prior to Esquire, O’Malley oversaw men’s sports publications at Emap USA’s Sports Division and previously worked at Men’s Journal and Rolling Stone.
“He’s a very seasoned executive,” said Clinton. “He knows the Elle world but from the male side — all of the Milan, American designers, the major retailers, and he’s got great relationships with the head of Neiman Marcus and Saks and all the obvious designer companies.”
O’Malley’s track record at Esquire is steady. In the first half of this year, ad pages are up 12 percent, though that still trails rival men’s title GQ by a total of 75 ad pages.
Meanwhile, in fallout related to the move, Elle’s chief brand officer Robin Domeniconi is getting kicked upstairs into an executive role at Hearst Magazines and publisher Kevin Martinez has been pushed down to the role of associate publisher.
Clinton said that the search for an Esquire publisher will now begin in earnest.
And now that the deal is done, speculation about move-in dates begins.
Elle, Elle Decor, Woman’s Day, Car and Driver and Road and Track are all expected to move into the Hearst Tower within the next six to nine months. Clinton said it’s likely that back office operations will be kicked over to the Sheffield Building directly behind the Hearst Tower to make space for the new publications (Hearst bought the commercial space in the Sheffield for $95 million in 2007).
On Tuesday night, senior Elle editors — all dressed in black, said one spy — sat down for dinner in the Hearst Tower’s 44th floor to meet their new overlords.
As for Lagardère, the French company is selling Hearst its magazine operations in the U.S., Italy, Spain, Japan, the Netherlands, Hong Kong, Mexico, Taiwan, Canada and Germany, as well as in Russia, Ukraine and the U.K., although those deals have yet to be finalized. A local partner in the Czech Republic, not Hearst, will acquire its business there for an identical price, Lagardère said. The French firm also trumpeted that it was a better deal than previously thought, thanks partly to real estate assets it still controls carrying higher values than initially estimated. The deal boasted a total enterprise value of 654 million euros, or $943.1 million at current exchange rates, and should deliver annual royalty payments to Lagardère for use of the Elle brand of 8 million euros, or $11.4 million.
— JOHN KOBLIN AND MILES SOCHA