American Magazine Publisher Sells 50% Stake to Japanese

American Magazine Publisher Sells 50% Stake to Japanese
By RANDALL ROTHENBERG
Published: August 8, 1990



In a long-expected move to save his embattled magazine company, Owen J. Lipstein, the publisher of Psychology Today, Mother Earth News and Smart magazines, announced yesterday that he had sold a 50 percent stake in his New American Magazine Company to a Japanese publishing company. The joint venture is one of the few between American and Japanese communications companies.

Mr. Lipstein, who is 39 years old, said that he completed a deal 12 days ago with JICC Inc., the Japanese Independent Communication Company, or JICC Inc., which publishes consumer magazines and books and produces films, video programming, records, compact discs and computer software.

Terms were not disclosed. In late June, when the two companies signed a letter of intent to form their partnership, several communications trade magazines said the Japanese company would pay $7.5 million for its interest in New American. Yesterday, Mr. Lipstein said that figure was low, but refused he declined to comment further on the price.

Mr. Lipstein said an immediate cash infusion would enable New American to restart Psychology Today in the fall, and to mount promotional campaigns for Smart and Mother Earth News.

JICC was founded 20 years ago as a public relations company, eventually diversifying into other communications ventures, said John Suhler, a partner in Veronis Suhler & Associates, the consulting and investment banking firm that brokered the deal. 10 Consumer Magazines The Japanese company's 10 consumer magazines range from Takarajima, which is aimed at teen-agers, to Bessatsu Takarajima, a cultural and political publication. In book publishing, it has acquired the Japanese rights to American titles like ''Summer of '49,'' a baseball history by David Halberstam, and ''Modern Manners,'' a humor book by the essayist P. J. O'Rourke.

Through most of the 1980's, Mr. Lipstein seemed the personification of the modern publishing mogul, building a company whose magazines, which were devoted to health, spiritual well-being and environmentalism, seemed to speak to the concerns of the baby boom generation.

But in making acquisitions, Mr. Lipstein accrued a debt load reportedly as high as $30 million, a figure he disputes.

Strapped for cash, New American suspended publication of Psychology Today, which had a circulation rate base of 875,000, after its December-/ January issue. Smart, with an announced circulation of 250,000, and Mother Earth News, which has a rate base of 700,000, began delivering issues late, causing some advertisers to drop out. flee. Even the sale of American Health to Reader's Digest in February, for $29.1 million, did not alleviate the problems.