Primedia's exploration of the divestiture of its crafts unit is creating a stir.   The Mad Cropper worries "what could happen to my favourite mags — Simple Scrapbooks and Creating Keepsakes."   Others might wonder if this could be the death knell for their favorite titles.   I'm here to tell you there is nothing to be concerned about.

Primedia began as a cooperative venture between former executives of MacMillan Publishing and the leveraged buyout firm, KKR.   The general idea was to buy publishing businesses from private concerns, where titles could be had for as little as three times earnings, combine a bunch of these relatively small business into a larger corporate entity and then take the enterprise public at multiples of around 7 or more times earnings.   To illustrate, say you can buy two magazines for $1 million each, a total of $2 million, and then sell stock in your business for $5 million, that would be a really good investment.   That was essentially the KKR vision with respect to Primedia.

But Primedia was never a corporation which had a vision with respect to the nature of titles they would publish.   They hired a crew of Harvard MBAs to scour the landscape searching for publications which could be had at low multiples for management to buy.   And buy they did.   The result was a mishmash of unrelated titles.   For example, back in 1991 when Primedia started, they purchased New Woman magazine and the Daily Racing Form in order to complement their business directory business and a large stable of business to business magazines like "Telephony," the magazine of telephone engineers.   Later they bought "Funk and Wagnalls Encyclopedia," "Weekly Reader" and a business called "Films for the Humanities and Sciences" geared towards colleges and high schools.   I won't go into details about all their acquisitions because there were many but my point is most of these things had nothing to do with each other and that's the way the business developed.   Perhaps more importantly, none of these things had anything to do with crafting or scrapbooking.

Primedia often picked up publications from the founder who had built the company.   Sometimes they chopped this head off the operation and proceeded to run the company based almost exclusively on principles of financial management as taught by Harvard Business School.   That means the bottom line was continually reviewed, budgets examined very closely, and little cuts made in order to enhance the bottom line.   Very few businesses were managed in a fashion which would enhance continued development of product and brand.   Primedia presided over the destruction of many a brand.

Sometime around 1996, Primedia expanded by purchasing a new business focused on professional training.   The company they purchased had been started by a man who was essentially a "used car salesman."   He developed training for car dealerships which was in video format sent by satellite transmission to dealerships around the country.   Before its sale to Primedia, the business had expanded to include training for law enforcement and emergency response, banking, etc.   As a good "used car salesman," the seller cleaned up the business and made it look pretty for Primedia who overpaid by hundreds of millions.   That littlemisstepp cost the CEO and Chairman his job.

A new CEO was hired to plan a new vision and take the company into the next millennium.   This supposed "genius visionary" was named Tom Rogers and he made his landmark acquisition the purchase of "About.com" for around half of Primedia's overall enterprise value.   But About.com was literally a piece of junk and internet stocks had collapsed by the time Rogers' crew celebrated the "marriage" of the two enterprises.   From this time until the present, Primedia has languished and ultimately is involved in a breaking apart of its businesses to recover at least some of the value contained within the organization and pay off the huge piles of debt the company has acquired over the past decade and a half.

The sale of Primedia's craft business segment is simply a part of the overall breaking apart of the company.   There is nothing in particular to be concerned with regarding the sale of Simple Scrapbooks, Creating Keepsakes, Craftrends or any other of these businesses.   It cannot fall into a worse organization.   Whoever acquires these publications will most likely manage them better than Primedia did.   The track record of businesses which leave Primedia is pretty good.