Condé Nast said Tuesday it will oust chief executive Bob Sauerberg in a dramatic shuffle that will combine the publishing giant’s domestic and overseas operations.
The Newhouse family that has long controlled Condé Nast said it will also promote Jonathan Newhouse, who had chaired the international division based in London, to chairman of the combined company.
The jolting news was revealed in an email Tuesday from Jonathan Newhouse and Steven Newhouse, the head of Advance digital operations.
In an interview with The Post, Steven Newhouse said the decision to consolidate operations was reached at a board meeting earlier this month. He dismissed speculation that the moves were a precursor to a sale of the company.
“We have never entertained the option of selling Condé Nast,” Steven Newhouse told the Post. “Condé Nast is not for sale and will not be for sale. This change is about competing in the global marketplace.”
Sauerberg has been with the company for 18 years, including the last eight as CEO, which have been among the most turbulent in the company’s history — marked by magazine closings and conversions of print magazines such as Self, Teen Vogue and Glamour to predominantly digital operations.
The move for the moment cements family control at the glitzy empire, which has been battling to get its US wing back to profitability.
Domestic Condé Nast — whose titles include Vogue, Vanity Fair, the New Yorker and GQ — lost $120 million in 2017 and was looking to cut those losses in half as part of a five-year restructuring plan that the family approved only a year ago. But it appears the turnaround has not reaped the gains that the family sought.
At one point a decade ago, the domestic wing of Condé Nast was believed to have revenue of around $1 billion but that appears to have been cut in half over the ensuing decade. As domestic slumped and the international grew, the combined company now is believed to have about $1 billion in total revenue, and sources estimate that international contributes between 40 to 50 percent of the total revenue picture.
The privately held company does not disclose its financials, but its Condé Nast International is required to file disclosures once a year with Companies House, the British government clearing house and that shows that the wing run by Jonathan Newhouse — with titles including Vogue Paris, British GQ and a weekly Vanity Fair in Italy — has not been immune to turbulence that hit print titles everywhere.
The most recent financial information filed in December 2017 for the previous fiscal year shows the European publications grew revenues slightly to $511,677,760 (up just over 4 percent from $490,212,711 in 2015). But the European titles slipped into the red in 2016 with a group loss after taxation of $8,297,032 (compared with a profit of $6,106,000 in 2015 and a comprehensive loss — equivalent to net loss in the US — of about $47,969,686 (compared with a 2015 profit of $7,777,353).
A spokeswoman for Conde Nast International said those numbers only include the European magazines and not the revenues from licensing and other magazines published around the world. if those figures were disclosed, she said, the overseas operations would have posted a profit in 2016, and did so in 2017. She said the overall overseas operations will be profitable again in 2018.
Jonathan is a first cousin to family patriarch Donald Newhouse — CEO of the parent company, Advance Publications — and the late Si Newhouse, who had run domestic Condé Nast with an iron grip until he was slowed by Alzheimer’s disease and stepped away in the final years before his death in October 2017.
Jonathan has been CEO of Condé Nast International for more than two decades, but has been flexing his muscle over the combined company over the past year. He will relinquish the international post as he takes over as chairman of the combined company.
Steven Newhouse, the son of Donald Newhouse, had been CEO of AdvanceNet, and had been an advocate of the digital transformation that included such moves as Advance’s acquisition of Wired and Reddit over the years.
“What has become clear is that our aspirations are no longer best served by our historical structure of running two separate companies,” the memo from Steven and Jonathan Newhouse said.
“Our brands have worldwide influence and impact, and our business is increasingly becoming global, as we continue to innovate in video, agency, conferences, consumer products, data and other brand-aligned projects. We have concluded that the time is right for us to combine our US and international companies to realize the full potential of Condé Nast for our audiences and our business partners.”
Sauerberg will remain CEO in the transition while a search for a CEO of the combined company commences, the company said.
Said Steven Newhouse, “We are looking for an executive with global experience.”