THE MEDIA BUSINESS; MATCHMAKERS FOR MAGAZINE INDUSTRY

By GERALDINE FABRIKANT
Published: July 4, 1988



Among the many investment banking boutiques springing up on Wall Street, few have carved out a niche like that of Veronis, Suhler & Associates. Cultivating a large network of communications industry executives, the firm has fast become one of the most visible and active marriage brokers in the magazine business.

In recent months, the firm has helped arrange the sale of Diamandis Communications Inc. to Hachette Publications Inc. for $712 million, the sale of Southern Living's Creative Ideas to P.S.C. Publications for an undisclosed price and the sale of Details, the fashion magazine, to Conde Nast Publications, also for an undisclosed price. The dapper John J. Veronis, who is 60 years old, and his partner, John S. Suhler, who is 45, have also helped craft the sale of Science Digest to Time Inc. and Mother Earth News to Owen Lipstein. A Background in Publishing

The two partners have substantial credentials in publishing. Mr. Veronis, the more socially visible of the pair, has been president of The Saturday Review, publisher of Psychology Today and publisher of the Ladies' Home Journal. Mr. Suhler is the former president of the CBS Publishing Group.

Between them, they knew hundreds of executives in the industry. Those they did not know, they systematically introduced themselves to over breakfasts and lunches and in meetings, often at the company's offices.

''I think they had a Rolodex of everyone's name, and every few months you would get a call,'' one publishing executive said of the two.

One of those calls went to Robert Gardner, owner of Marketing and Media Decisions, a trade publication for the advertising industry. He recalls hearing from either Mr. Suhler or Mr. Veronis every few months. ''They would suggest we get together to discuss the business,'' Mr. Gardner recalled. ''They always had some ideas for us.''

So it seemed natural that when Mr. Gardner and his colleague, David Bentley, decided to find a partner, they hired Veronis, Suhler as their investment banker. Ultimately the magazine was sold to the producer Norman Lear's company, Act III Communications. Right Place, Right Time

In part, the success of the eight-year-old firm is a function of being in the right place at the right time. The interest in media properties has boomed. The firm, which began as a three-man operation, now has more than 30 employees, and last year it completed more than 25 deals valued at more than $1 billion. While most of its activity has been in arranging the sale of magazines, the firm was also involved in the sale of Capital Cities' Buffalo television station as well as the acquisition of two television stations by the Telemundo Group, the Spanish-language network.

Some long-term relationships have had substantial payoffs. Mr. Veronis and Mr. Suhler knew Peter Diamandis, and they talked when he bought magazines from CBS Inc. Then they served as investment bankers in selling some of the magazines to the Times Mirror Company. Mr. Veronis knew that Hachette Publications was interested in buying the magazines that Diamandis Communications still owned, including Woman's Day. The real coup came over lunch on Feb. 16, when Mr. Veronis suggested to Mr. Diamandis that he might want to sell his company to Hachette.

That day, Mr. Veronis arranged to see Daniel Filipacchi, the vice chairman of Hachette, who made an offer the next day. ''From that point on it all went very quickly,'' Mr. Veronis said. ''There was probably an understanding and a handshake less than three weeks from then.'' The Banker's Fee

Investment bankers generally get a fee of up to 1.25 percent on a sale larger than $100 million, like the Diamandis deal.

But many of Veronis, Suhler's deals are small, hardly the fodder of large investment banking firms like Shearson Lehman Hutton or Morgan Stanley. Those firms generally do not pursue deals of less than $25 million. The fee for a sale under $25 million is generally 2 percent to 3 percent.

Mr. Veronis said that in most deals his firm represents the seller. But Owen Lipstein, president of three magazines run as an interlocking partnership - Mother Earth News, Psychology Today and American Health - worked with Veronis, Suhler in raising $23 million in refinancing money. ''They force you to look at something the way an outsider would look at it, which, if you are an operator, you don't necessarily do,'' Mr. Lipstein said. ''To handle all this is distracting. They get it outside the day-to-day business.'' Making Things Happen

Savvy investment bankers are not merely passive facilitators of other people's ideas. They are always looking to make deals happen.

For example, Mr. Veronis ran into Alan Patricof, whose firm owned Details, a trendy fashion magazine. Mr. Veronis had not read the magazine, but he recalled that after talking with Mr. Patricof, he had a hunch that the magazine might be for sale.

The next day he called S.I. Newhouse Jr., chairman of Conde Nast Publications, a client. Mr. Newhouse and his team looked into a deal and expressed interest. Mr. Veronis then proposed the sale to Mr. Patricof, who agpeed.

Some executives attribute Mr. Veronis's success partly to his style. ''John Veronis knows the importance of a face-to-face visit,'' one publishing executive said. ''He'll say, 'Let me pop over.' The meeting may only last five minutes, but he comes himself.'' Some Disappointments

To be sure, Veronis, Suhler has hardly cornered the market. Mr. Suhler said he regretted losing one major deal. And there have been failed efforts. Veronis, Suhler hired one executive to help it get into the film business. The firm is not in that business anymore.

Early on, the firm put some equity money in deals. More recently it has started a limited partnership fund of $57 million to invest in media properties. That has led to criticism by several industry executives that Veronis, Suhler, which has done no such deals so far, would be prey to conflict-of-interest charges. The fear is that situations could arise in which the firm represents a seller looking for the highest price, and the fund is a buyer trying to get the same property for the lowest price.

Mr. Veronis denies there would be problems. ''It's unlikely,'' he said, ''that the fund would acquire anything that we are selling.''

Photos of John J. Veronis (NYT/Sara Krulwich) and John S. Suhler; chart of Veronis/Suhler magazine deals (NYT)