In a surprising move this morning, Source Interlink, a multi-billion dollar publishing company owned in part by Ron Burkle, filed for Chapter 11 bankruptcy. Source Interlink only a few years ago acquired the "enthusiast" group of magazines from PRIMEDIA which included AV books such as Stereophile, Home Theater, Shutterbug and many others. The deal was north of a billion dollars and came before the current economic woes that have seen all but online and TV ad revenues significantly contract.
Citibank, according the New York Post, will own upwards of 80 percent of the company's stock which is priced at about 15 cents per share on Tuesday morning.
The Source Interlink Chapter 11 comes at a tough time for co-competitor Sound & Vision magazine which is owned by French publisher Hachette Filipacchi. Sound & Vision is packaged for sale along with some popular photo books, but has yet to announce a buyer. One would assume many of the enthusiast titles at Source Interlink could also go on the market via a judge's gavel.
Stereophile is an institution with audiophiles, easily taking the crown for being the most historically significant magazine in the history of high end audio. Home Theater Magazine is also a powerful magazine with solid advertisers and top notch content in the printed world. Both publications have very strong, highly ranked websites to pair with the print magazines.
While its doubtful that Stereophile and Home Theater will just go away, some of the associated costs, additional web sites and many of the writers on staff could become victim of today's brutal economy.