The sagging economy has cratered several media giants, leaving the companies' main lender -- JPMorgan Chase -- in the driver's seat. The bank now holds sway over Readers Digest, Source
Interlink Media and American Media, with combined revenues of about $5.04 billion. That number doesn't even include JPMorgan's role as a banker in the still unraveling bankruptcy of Sam Zell's
In comparison, Time Inc., generally considered the nation's No. 1 magazine publisher, rang up $4.6 billion in revenue last year. In fact, the combined revenue of Hearst and Condé Nast is less than JPMorgan's $5.04 billion figure.
Here's another way to look at it. The bank's current publishing line-up, excluding Tribune, posted a 2008 operating profit of about $470 million. In contrast, Time Inc. had a $6.4 billion operating loss after impairment charges of $7.2 billion. The situation is a result of the LBO boom that ended in 2007. Private equity loaded up the publishers with too much debt -- and when business faltered, lenders swooped in to take control.