OUT OF TOUCH: These are tough times for the tabloid set, with Bauer Publishing hit hardest. Most celebrity weeklies saw flat or falling newsstand sales in the second half, according to a report in the New York Post, except Us Weekly and OK. People, Us Weekly, In Touch and Life & Style all raised their cover prices in the fall, but it appears Bauer's titles suffered the most from the move. After several years of rapid growth and soaring newsstand sales, Bauer said Wednesday that it would cut the rate base for In Touch to 1 million from 1.2 million, and Life & Style will decrease its rate base to 550,000 from 700,000. Both moves are effective immediately. Moreover, Life & Style will miss its rate base for 2007, reporting a total paid circulation of 681,723 for the period. In Touch, meanwhile, reported a total paid circulation of 1,271,354 for the period, surpassing its rate base. Bauer raised the prices of In Touch and Life & Style to $2.99 in October, a 50 percent increase. In September, People raised its cover price to $3.99 from $3.49, and Us Weekly followed suit several weeks later. "Like any product, if you increase your price 50 percent, you're going to feel an impact inevitably," said Ian Scott, president of Bauer Advertising Sales, who also noted that the price hikes have helped generate healthy revenues for the company.

More drama also ensued for Bauer on Wednesday, when a report on complex.com circulated that the Federal Bureau of Investigation is supposedly investigating former West Coast editors who allegedly took money in return for selecting photos to run on In Touch's cover. A spokeswoman for Bauer responded, "This whole story sounds ludicrous. Our West Coast bureau does not assign photo agencies — this goes through our photo desk. In Touch has not been contacted by the FBI."

As if that news wasn't enough to keep Bauer staffers buzzing, on Wednesday, Neil Goldstein resigned as publisher of Life & Style to join Maxim as associate publisher. A replacement has not been named.
— Stephanie D. Smith

AS LONG AS TIME PERFORMS, FINE: During his first earnings call as chief executive officer of Time Warner Inc., Jeff Bewkes said there will be a cost reduction in the corporate office. A spokesman later confirmed that 100 people will be let go from corporate headquarters and more cuts could be on the way for New Line Cinema. There is currently no timetable as to when changes will happen (which could include more layoffs). Bewkes also said AOL would split its Internet access and advertising businesses and, depending on what happens in upcoming negotiations, Time Warner Cable could be spun off.