Ziff Davis Media Files for Bankruptcy
By VINNEE TONG – 11 hours ago

NEW YORK (AP) — Ziff Davis Media Inc., publisher of technology and video game magazines, filed for bankruptcy on Wednesday and cited a decrease in revenue from print advertising and subscriptions as contributing to its decline.

But the company said it expected to reorganize quickly and exit court protection by midsummer.

New York-based Ziff Davis said in a court filing that it had about $500 million in liabilities and $313 million worth of assets, as of the end of December. It filed for Chapter 11 protection to restructure debt that had become burdensome.

"We feel like we're in a position poised for wonderful growth," Ziff Davis Chief Executive Jason Young said Wednesday. "We just needed to solve this issue."

The company is the publisher of PC Magazine and Electronic Gaming Monthly and Web versions of those magazines.

Ziff Davis reached an agreement with senior creditors, to whom it owes $225 million. Under the deal, the senior creditors will be owed $57.5 million and at least 88.8 percent of the common stock in the company once it emerges.

The company was unable to reach an agreement with more junior creditors, and is looking to use the court process to resolve that. Another 11.2 percent of the reorganized company's stock is available for distribution to those debt holders under the company's current proposal, but those creditors are likely to seek more equity in court.

Creditors have set aside $24.5 million to fund the company's operations during the case and after it concludes. The company's filing states there are between 1,000 to 5,000 creditors.

The company reaches 26 million consumers through 16 Web sites, three magazines and direct marketing. It is a remnant of a publishing empire established in the 1920s by William B. Ziff Sr. and Bernard G. Davis, who introduced such titles as Popular Aviation and Popular Electronics. In 1994, the Ziff family sold a 95 percent stake to private equity firm Forstmann Little & Co. for $1.4 billion. The following year, Softbank Corp. bought 70 percent of the company from Forstmann for $2.1 billion. Softbank in turn sold the company to another private equity firm, Willis Stein & Partners, in 2000.

The bursting of the Internet bubble hurt publishers like Ziff Davis, which said its print advertising revenue dropped to $40 million last year from $215 million in 2001. Its total revenue fell to $76 million last year from about $300 million in 2001.

Young said the company was focused on growing the online side of its business and that it has made progress over the past seven years to generate a growing share of its revenue from digital businesses over traditional print publications.

"Operating-wise, we have executed this tremendous transformation," Young said.

As of the end of December, it had 266 employees, with headquarters in New York and an office in San Francisco. Young said he did not anticipate the loss of any jobs.

Ziff Davis Media's parent company is Ziff Davis Holdings, which trades as an over-the counter stock.

The case has been assigned to Judge Burton Lifland in the federal bankruptcy court in the Southern District of New York.

http://ap.google.com/article/ALeqM5i...srTCwD8V7MNDO0

Wonder what will happen with all those free EGM subscriptions.

I don't subscribe or read any of their print publications, but I love their gaming podcasts. Hopefully those stay on track through this.

The podcasts producer was posting on GAF and didn't seem to think their would be any major shakeups with 1Up.

Back in the days of the Playstation, Nintendo 64, and right as the Dreamcast and the Playstation 2 were coming out was EGM's glory days. I subscribed for years because I knew I could always count on a huge EGM issue in the mail once a month that was packed full of actual useful information. Back before the stupid comic in the back and before that idiot Sean Baby. Now with my free subscription it is nothing more than something to do while I am unloading a fecal process in the bathroom. It is kind of sad. If they could get back to those days when the Holiday issues were as big as phone books and the articles had at least 90% factual and useful information instead of half-wit jokes and opinion.

^
I thought they had declined even around then and thought their glory days were in the 16 bit era.

Exactly how I feel.

Heh.

I also remember when it was people who subscribed to the magazine that got all the free cool video game stuff in the mail. I still have a sealed crazy taxi air freshener and a sealed set of Space Channel 5 magnets. Now I go to the magazine isle at the store, see the issue I just got yesterday, and see inside they have cool posters and random junk like that in there. I know it is a little thing, but doesn't it make sense to want to take care of your core audience first and foremost and then worry about newsstand attraction second. I would have to assume though they are taking the approach that "we already have these people as subscribers so we already have their money. It is the people on the street we need to entice in with promises of candy cane wishes and gum drop dreams and then, once we have them, mod edit: Deleted bigotry. There's no room for those comments here.

Really I guess it doesn't matter. The fact that they are bankrupt right now speaks a lot to the integrity of their publication and the fact that people don't want to pay for and have to wait for information on the newest games and trends when they can access it at a moments notice over the internet. With magazines like that, unless they have an absolute exclusive, you are really just paying good money for re-hashed old news.

Even with those freaking cover ads (which make all of their magazines look exactly the same), their ad revenues dropped that much?

Their ad revenue drop is amazing (and I guess that's why we don't get the mini-phonebook December issues anymore) but I'm amazed at their debt... is that due to just those two magazines?

I always wondered what the draw of actually paying for an EGM subscription was... they themselves pretty much give most of the same stuff away for free on their 1up.com website. They even reference articles from 1up...

That's how I feel. I couldn't care less about anything that is written by the 1up crew, but I enjoy their podcasts a great deal.

It seems with the restructuring of their website, they're trying to become more like a gamespot or IGN.

I'm the complete opposite. Those are the two features I read first.

Fans of Nintendo "kiddie" comments feel a piece of themselves die today.

Wow. I'm sorry. Really. Those have to be the worst two features in any magazine this side of fake Maxim reviews. There are more insightful bits in Highlights than anything "I think I'm funny" Seanbaby "shitting on paper and calling it an article" puts together.

I just re-subscribed to EGM last week for 2 years. although it was only 8 bucks

I used to love reading Computer Gaming Monthly. At first they didn't even provide a rating scale for the games they reviewed because they were worried people would focus too much on it and not the actual review.

Seanbaby needs to be pummeled. That guy is such a douche bag.

I've been getting EGM free for 4 years now, I think I've read one issue.

It just seems like they are constantly behind on reviews, due to their policy, and cannot land a decent exclusive ala GI.

Also, Seanbaby & Hsu & Chan suck balls.

In a perfect world this would help them, since gamers should dismiss the validity of an "exclusive review", rather than flocking to the site or magazine with the first review. But I don't think much can be done, the decline in print advertising revenue is inevitable when the magazines are structured around monthly reviewing and previewing games, information that is time sensitive for the audience. I really think the only way for a gaming print magazine to survive in the face of online competition would be to transition to a format that focuses more on in depth articles on gaming design and the industry (which are usually smaller parts of EGM) and less on reviews and previews which are better suited for the website. But I'm not sure how accepting the audience would be of this change.

I really enjoy the 1up podcasts, I would hate to see anything happen to them. I also enjoy reading the articles in GFW, which usually have more in depth interviews and articles on the industry. I skim through EGM, there just isn't much in there for me personally. Both magazines were free or very cheap.

I totally agree with this, but Next Generation folded so long ago now. While I like pretty pictures, I also like in-depth articles... I remember it would really take me the whole month to read Next Gen, while I can flip through EGM in less than an hour.

My favorite part of EGM were the interviews they had with developers before and after the games were released.

What amazes me is that most of these gaming magazines today can't even fill up the magazine anymore, especially the console specific ones. I'm not sure if it's paid advertising or what, but I really don't need a whole section on cell phone games EVERY MONTH in my console gaming magazine.

That is bizarre. Back in the day you would have Sears Wish Book thick issues covering two consoles and one handheld. Videogaming has grown tenfold since(5 viable platforms) and the coverage has shrunk. What happened?

Whatever happened to having walkthroughs, maps, and gameplay tips in magazines? I can get all the upcoming game info and game scores online. If they want to sell magazines, they need to set themselves apart from the internet offerings. I personally would rather have a magazine in front of me to refer to a map, then try to read the text of someone explaining where to go.

It's all related to the drop in advertising revenue. The number of pages in the magazines is directly proportional to how much they are bringing in from advertisers. Back in the day, most advertising money was spent in print magazines, because that was really the best way to reach the audience, now there are many more outlets competing to reach gamers, including the internet.

Exactly. Sean Baby kicks Ass!!!

But that is what game guides are for now. I don't see any magazine dedicating 4 pages on getting through a tough section of Gears of War or something. The internet and game guides have made those features obsolete. However, I will forever have fond memories of those stage walk-throughs for 16 bit games. I thought those were so cool.

I remember waiting for an issue of EGM to come out to get the codes for Mortal Kombat 2, now I think gamefaqs (and similar sites) fill that need first for most.

I agree that the magazines need to move to a more informed and indepth reporting style, and drop the attempts at lame humor. But that would suggest that it was more adults reading these mags than teenagers, and I don't know if that's the case.

I'm also annoyed by Seanbaby's constant need to remind us that he has a girlfriend.

And I've often wondered why they bother with that comic in the back. Is it supposed to be funny? I'm not trying to be a smartass.... While I admit that I don't invest a lot of time with it, I'm really not sure if it's supposed to be funny.