J_R

Hi Matt

I am not familiar with the particular publications you mentioned. I have, however, seen a number of trade journals from different trades. If the ones you get are of similar format to the ones I am thinking of, about 80% of the pages are devoted to advertising. There is usually some editorial, then a few “articles” which are either written by the same editor, or appear to have come from a product brochure, or industry spokesman (probably at negligible cost to the publisher). The entire intent is to sell advertising and make a profit. Doing a Google search on “trade journal publishers” turns up a large selection of publishers that do this for many different clients.

I do not have all the answers. As a matter of fact I have just a few. I did ask a lot of very pointed questions relative to this topic. Among other things I found no EC member that can be called an expert on magazine publications… at least in my estimation. This is as I would expect it to be. The EC sets policy, the ED is in charge of day to day operations, and a professional staff has been hired, involved with publications and with MA in particular. While I do not expect the EC members, or the ED, to be able to answer questions about publishing, I do expect them to ask questions.

What I have found out, is that there are IRS and Postal regulations that limit the advertising content of educational publications, which is what MA MUST BE. When I asked what the limits were, no EC member was able to answer definitively. One staffer tried to baffle me with BS and said we could sell 75% advertising if we wanted. That is a true statement, but, not within the IRS/Postal guidelines. It appears that the acceptable advertising limit is somewhere around 30 to40% of the pages published. Some large percentage of the articles must be “educational content”. I did not get a definitive answer to that percentage either, although I considered it of secondary interest. I suppose that is why we see so many articles aimed at newbies.

When you couple the 35% (?) advertising content with the fact that the financial statement shows it costs over 90 cents to produce 1 dollars worth of advertising revenue, it leads to a very logical progression of questions. I hope the EC members ask them. The only reasonable explanation for the ratio of cost of advertising to advertising revenue being so high came from Dave Brown. He pointed out that in expensing costs, it makes sense to expense them to a unit that is taxable, rather than a non-taxable unit, since doing such reduces the overall taxes due. While logical, after reviewing the costs in the financial statement, I can see where it might account for a few cents on the dollar… not much more.

If necessary, and unless some very pointed questions can be answered to their satisfaction, the EC needs to bring in an outside firm to review the operation of MA, IMHO. It is certainly possible that the magazine is being run in an efficient and creditable way, but, the EC needs to KNOW.