Conde Nast's Big Bad Gamble

This year, Conde Nast hired McKinsey, folded several magazines, and instituted across-the-board budget cuts and layoffs. Clearly, the fancy days are over. Right? No, says the company. This is just a temporary blip.

In John Koblin's weekly Conde Nast feature, company execs reveal a curious mindset (assuming it's not just spin): McKinsey's job was not to reshape the monolithic company with an eye towards a radically different digital-centric future; instead, its only assignment was to tidy up the balance sheet for 2010. After which, Conde presumes, everything will get back to normal.

"We have what we believe is a short-term problem with advertising revenue," [Conde Nast editorial director Tom Wallace said]. "That problem seems to be improving. How long will there be print magazines? I don't know. But for as long as there will be, Condé Nast is well positioned."

Really! And what if they turn out to be well positioned only if time begins running backwards?

"The advertising revenue until proven otherwise is cyclical," said Mr. Wallace. "And if it is proven otherwise, we've already adjusted for it."

So: The world's most famous magazine company is betting that the current print magazine ad downturn is cyclical, meaning temporary. And if it's not cyclical—meaning (as is likely!) it stays this bad, well, the cuts they've already made mean they'll be just fine.

And what if magazine advertising continues getting worse? Then they're fucked. Good luck, Nasties.
[Pic: Rafael Chamorro]