Already beleaguered by a sharp drop in advertising revenue, calls from junk investors to reevaluate its cash position and the possible sale of $250 million worth of assets, publishing house Primedia Inc. recently decided to pull additional risk from its capital structure and shutter its corporate venture arm, Primedia Ventures.
In a Sept. 26 conference call with investors, the company warned of lowered EBITDA forecasts for the third quarter.
?I know the question we?ve all been wondering about us what the long-term impact, how long and how deep the expected economic and advertising recessions will be ? a question only time will answer and I don?t have one for you today,? Primedia Chairman and CEO Tom Rogers said. ?While we have attempted to give you our current outlook, which is based on the best assessment we have at this time, it is understood that we, as everyone else, have very limited visibility in how all his will play out in the near-term.?
The many variables currently influencing Primedia?s cloudy financial forecast include everything from expected military action in response to the terrorist attacks to possible tax issues to concerns about consumer confidence and capital spending.
Following the call, The New York Post reported that the company?s venture unit would be victim to the cost-cutting measures.
Neither Primedia Ventures, nor its parent?s investor relations or public relations group returned calls seeking comment.
According to subsequent published reports, the venture arm will not make any new investments, but will continue to support its existing portfolio through a newly-formed group called PV Partners. No information on that group was available by press time.
Reports also indicated four of the group?s six professionals have been laid off. Primedia Ventures? $70 million Internet-heavy portfolio includes now-defunct Craftshop.com and Sticky Networks.com, as well as Utility.com and CarsDirect.com.
Carolina Braunschweig can be contacted at:Carolina.Braunschweig@tfn.com