Chicago Tribune: Reader`s Digest Gets Into Fitness

Reader`s Digest Gets Into Fitness
January 09, 1990|By George Lazarus.

What was most certainly the worst kept secret in publishing in 1989 has unfolded with Reader`s Digest Association agreeing to a deal to acquire American Health magazine.

Both sides have been talking since July, Reader`s Digest Association especially seeking to expand its magazine base, headed by its flagship monthly Reader`s Digest.

In the last three years, Reader`s Digest has bought such publications as Travel Holiday, New Choices (formerly 50 Plus) and The Family Handyman.

The announcement Monday-both sides reportedly firmed up the deal over the weekend-said Digest would pay $29.1 million for American Health Partners, parent of American Health.

Payment is contingent on American Health Partners satisfying certain conditions before Jan. 31, the buyer and seller declining to elaborate.

Sources familiar with the deal say $20 million will be in cash with the balance in notes.

American Health brings to well-heeled Reader`s Digest Association the premier magazine in the health-and-fitness field.

With a circulation of 1 million, this 10-times-a-year magazine has been coveted by other publishers, but Digest apparently was alone in the bidding.

American Health, which Manhattan entrepreneur Owen Lipstein founded as a bimonthly with $8,000 in 1982, had another excellent year in advertising in 1989. It hit 728 ad pages, up 9.7 prcent from 1988.

American Health has been published by a partnership, as are Lipstein`s other publications, including Mother Earth News, Pyschology Today and Smart.

By unloading American Health, Lipstein can free himself of debt that outsiders say may be as much as $30 million. Lipstein admits there is a debt, much of incurred in launching publications (primarily American Health), but he privately has told associates the debt is lower than published reports.

``American Health was a magazine that captured the fancy of the fitness revolution, and I`m sorry to lose it,`` Lipstein told this column.

American Health did fit into a market niche, but it is not alone as witnessed by Time Magazines` splitting its bimonthly Hippocrates into a new publication called In Health and a trade publication for physicians under the Hippocrates banner. There`s also Family Media`s Health magazine, and others, including the Good Health magazine supplement published by leading newspapers.