Disney Acquires 50 Percent Of Wenner’s US Weekly

The Walt Disney Company announced that it acquired a 50-percent stake in Wenner Media’s US Weekly entertainment magazine. As part of the deal, the two companies said they are forming a new company named US Weekly, LLC which will be run by US Weekly management and based in New York.

At a press conference on Tuesday, Disney chairman and CEO Michael D. Eisner said the two companies had previously discussed pairing up but it was not until US went weekly in March 2000 that things got serious. “Our intention is to take this source of information, week-in, week-out, to enhance our existing assets,” Eisner told a large group of reporters at Times Square Studios. “When US was biweekly, it wouldn't have been as effective for us as it is as a weekly because TV and radio are daily. We have at Disney a voracious appetite for information on a national and daily basis about what consumers are interested in.”

Wenner’s other titles, Rolling Stone and Men’s Journal, said Wenner Media chairman Jann S. Wenner, are not involved in the deal. Dismissing rumors that US Weekly ran way over its $50-million budget during the difficult transition to a weekly frequency, Wenner said: “We’ve spent less than half of that $50 million after the first year. We’re in fine shape that way.”

Both executives spoke at length about the cross-branding opportunities they will explore through the deal. Some of those mentioned include:

•ABC Entertainment will develop and air an annual US Weekly awards show.

•An US Weekly correspondent will be featured on “Good Morning America” entertainment segments.

•US Weekly entertainment segments will air on “The View.”

•US Weekly entertainment segments will air on ABC-owned TV and radio stations.

Eisner said the two companies will be researching Internet co-branding opportunities as well. But he would not give any further details, he said, until more research was done on the subject.

US Weekly was originally launched in 1977 by the New York Times Company as a bimonthly magazine. Wenner Media acquired the title in 1986 and changed the name to US The Entertainment Magazine, and then in March 2000, relaunched it as US Weekly.

While US Weekly’s ad pages nearly doubled (as it doubled its frequency) last year, second-half circulation results told a different story. Total paid circulation, according to Audit Bureau of Circulation, dropped 17.3 percent during the second half of 2000 versus the prior-year second half. Single-copy sales decreased 39.1 percent.

Eisner insisted Tuesday that the deal had nothing to do with US Weekly’s possibly fragile condition. “For a company of our size, and for Jann Wenner, this is not driven by economics,” Eisner said. “This venture is driven by theatricality. Given my experience in the entertainment business, I feel I understand how this fits into a broad cultural phenomenon.”

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