After Successfully Reducing Debt, Primedia Explores Sale of Seventeen
By DAVID CARR THE NEW YORK TIMES

Primedia Inc. announced yesterday that it would explore a sale of Seventeen magazine, the largest teenage magazine.

The company made the announcement at the same time it reported that it had hit its earnings target for 2002 in a very tough year in publishing. The sale of Seventeen would continue the company's efforts to sell consumer magazines to reduce debt and focus its energies on its 250 business-to-business and hobbyist magazines, including Fly Fisherman and Power & Motoryacht. Morgan Stanley has been retained to assist in the possible sale of Seventeen.

Primedia's sole remaining consumer magazine would be New York, and analysts speculated that Primedia, which is controlled by Kohlberg Kravis Roberts & Company, might quit the consumer business altogether. Tom Rogers, chief executive of Primedia, said, however, that there were no such plans.

"New York magazine continues to be a solid part of Primedia's growth going forward," Mr. Rogers said.

In the last year, Primedia has sold Modern Bride, American Baby and Chicago magazine to help meet promises to reduce its debt of more than $2 billion, and has raised $345 million. Still, the company is interested in further reducing its obligations. An executive close to the company said he expected that Seventeen, which has revenue of $100 million, could bring as much as $200 million in a sale. But analysts and bankers said it could sell for up to $300 million, in part because sales of large consumer magazines are rare and because the 58-year-old magazine is so well known.

Seventeen, which has a circulation of 2.43 million and 15 overseas editions, has been under ferocious competition from YM, owned by Gruner & Jahr USA; CosmoGirl, owned by Hearst; and Teen People from Time Inc. The magazine is beginning to show its age at a time when yet more teenage magazines, including Teen Vogue from Condé Nast, are entering the fray.

Although sales of ad pages at Seventeen were essentially flat last year, a publishing executive at Primedia said that deep discounting was under way to maintain ad volume. Newsstand sales, a crucial indicator of current consumer interest, fell 21.5 percent in the first six months of last year compared with 2001 and executives at the company said the trend continued throughout the year. The magazine recently hired a new editor in chief, Sabrina Weill, who had been executive editor at CosmoGirl. Ms. Weill's first issue will be out in March and is receiving good reviews within the company.

Mr. Rogers said Primedia was approached by a consumer marketer in December who was interested in forming a partnership involving the magazine, and, so, he decided to find out what Seventeen might be worth on the open market. Mr. Rogers said in the past that he was not interested in selling the magazine.

"It was very unlikely that we would sell Seventeen as part of what we were focused on last year," he said yesterday. "But the offer we received offered a prospect for growth and unleashing value, and we thought we should explore what else might be out there."

Most analysts say they believe that the buyer of the magazine will be another publishing company as opposed to financial investors, in part because an existing publishing company could wring the most value out of Seventeen's subscriber list and relationships with advertisers.

"Condé Nast wants it and can afford it," said Mark Edmiston, managing director of AdMedia Partners. "Hearst wants it and can afford it. Gruner & Jahr wants it and could afford it. There are any number of interested buyers out there, and they don't have to sell, but it might be a great time to find out what it is worth."

A spokeswoman for Gruner & Jahr USA said yesterday that it would "take a look;" the other companies declined to comment on their possible interest.

An executive who formerly worked at Primedia said the magazine was in "a free fall" at newsstands and that profits, which were once $30 million a year, were now almost half of that.

"I think that they realize that they still have a valuable property on their hands," the executive said, "but it is getting less valuable every day. They probably want to sell it while it is still the No. 1 magazine in the category."

Seventeen has been the biggest teenagers' magazine for decades, but YM now has a circulation of 2.26 million and gained 33 percent in ad pages last year. In 1998, Time Inc., perceiving some weakness in Seventeen, started Teen People, which now has an average paid circulation of nearly 1.7 million. CosmoGirl, first published in 2000, quickly surpassed 1 million in circulation. More recently, Hachette Filipacchi Media USA introduced Elle Girl, and Condé Nast started Teen Vogue.

The announcement that the company was willing to consider offers came on a day when the company had good news about its financial performance. It expects to announce complete fourth-quarter results next Wednesday. For the fourth quarter, consolidated earnings before interest, taxes, depreciation and amortization from Primedia's continuing businesses rose about 63 percent, to $96 million from the year-earlier period. For the year, earnings from continuing businesses climbed about 33 percent, to $250 million. The performance exceeded the forecast the company had given analysts, but the stock fell 4 cents, to $2.41.

"I think that they have done a pretty extraordinary job of cutting costs," said David Allen, a portfolio manager at GoldenTree Asset Management. "They managed to grow cash flow in 2002 without much revenue growth. Although the market was very skeptical that they would hit their numbers a year ago, they really delivered."

Mr. Allen said that he expected the company to sell Seventeen only if it obtained a price that would significantly reduce its debt.

"They don't need to sell," he said. "They have accomplished the debt reduction they said they would and stabilized the business, which gives them the luxury of waiting for the right price."

A Model Moment
By many accounts, teen model Karolina Kurkova may be fashion’s next superstar
By Anne Bratskeir Newsday.

The fate of the almost-famous model is not exactly a cruel one. She may not be able to control the agenda, she may not have the power to decide which magazine cover she will grace, or whose fashion shows she will elevate by her presence. But it's steady work, good visibility and good money.

As top fashion designers unveil their fall collections at Mercedes-Benz Fashion Week in Bryant Park and throughout Manhattan beginning Friday, stunning 18-year-old Czech model Karolina Kurkova finds herself in exactly that position. But she, and the people who have carefully set her path, recognize that the next eight days could potentially confer superstar status on her - or not.

Kurkova describes this time as her "window," perhaps opened a bit wider by the absence at these shows of Gisele Bundchen, the reigning supermodel of supermodels who has said she's taking the season off.

Many in the business believe Kurkova is poised to become the new queen of the fashion scene, and the shows may just clinch her coronation. She will strut only the choice runways, likely opening most of the major shows, including Michael Kors, Balenciaga, Ralph Lauren, Oscar de la Renta, Tommy Hilfiger and Marc Jacobs. And behind the scenes, her schedule of interviews, parties and appearances leaves little time for breathing.

She has "acquired a certain status," according to David Bonnouvrier, co-owner of powerhouse agency DNA Model Management, whose roster of beauties also includes such big names as Stella Tennant, Linda Evangelista and Amber Valletta. "You don't have to convince anybody to use her."

So how does a nice girl from Dec?n, a hilly little town about 100 miles from Prague, find herself here, in the eye of the fashion storm?

Bonnouvrier, who has represented her since June 1999, can recall, without hesitation, the day, year and hour that the whirlwind began. "Sept. 7, 1999, at 3:30 p.m.," he says. "A day that changed a lot of things in Karolina's life."

Indeed, that was the day the willowy then- 15-year-old, virtually new to the modeling world and new to New York, was ushered into the office of Trudi Tapscott, the bookings editor of Vogue magazine. Tapscott, a 23-year veteran in the business of finding and cultivating models of the highest caliber, says, "David told me he had this great girl and could I take a look at her. I remember the magic moment ... it was the second she walked in the door. I thought, 'She's exceptional and special and she's 15 years old!' What am I going to do with her?' We're not a discovery magazine. We're a top fashion magazine that shows grown-up fashion to grown-up women."

Yet, Polaroids of the pantheresque, 5-foot, 11-inch blonde, with the pale green eyes and wide, full mouth, made their way to editor in chief Anna Wintour, as did Kurkova herself. "It was the most nervous time for me," says the young woman in accented English, which she speaks pretty well. "I remember what I wore. It was very simple, a white shirt and a khaki skirt. I had no idea what was going to happen."

What happened was the February 2001 Vogue, which featured Kurkova, then 16, as one of the youngest models ever to appear on the cover.

The new face on America's most prestigious fashion magazine triggered a big buzz. Since then Kurkova has done more than 60 magazine covers, countless editorial spreads, and is featured in numerous advertising campaigns that range from the Limited, to Michael Kors to Tommy Hilfiger to Valentino. In 2002, she was awarded "Model of the Year" at the VHI/ Vogue Fashion Awards. (When she won, regular television programming was interrupted in the Czech Republic to announce the news.) Wintour dubbed her the "next supermodel." And, it was Kurkova who was chosen to shimmer down the catwalk at the Victoria's Secret fashion extravaganza last fall wearing the event's big-ticket outfit - diamond-encrusted bra and panties valued at $10 million.

Although earnings are hush-hush in the modeling business, an industry source says Kurkova commands the highest rates and estimates she may be paid as much as $20,000 per show during collections and earn as much as $4 million a year, though according to Forbes magazine, she was not among the top-five- earning models in 2002. (Bundchen was No. 1, according to Forbes, earning $12.5 million.)

Kurkova's beauty, far from cookie-cutter, is powerful and is matched by a strong personality. Marc Jacobs has said, "She has an angelic look with a dark side. She's sweet and fun but looks like she could be an evil, bewitching child." Tapscott was drawn to her "intensity and the oversized strength of her lips and eyes. But she's not just one-dimensional," says the editor. "There's tons of energy and personality."

Being chosen to wear the Victoria's Secret show-stopper was no accident, according to Monica Mitro, a spokeswoman for the company. "It's a big deal. We usually chose a high- profile model. In the past, it's been Claudia Schiffer, Heidi Klum and Tyra Banks.... I pay attention to who the 'next' girls are, and she is one. I look for people who not only can wear the clothes but who have the personality and who I can put on Leno at night."

Like much of rest of the world, Tommy Hilfiger discovered Kurkova on Vogue's cover. Having used the model to star in his last two print campaigns, he, too, is impressed with the qualities that lie beneath her surface. "I saw Karolina on the cover of Vogue and knew immediately that she was going to have a huge career ahead of her," Hilfiger says. "She is incredibly beautiful and seductive, but it is her good energy and playful personality that truly captivates you."

Despite such accolades, the work can be downright grueling. Late last month, Kurkova shot a cover for Flair Magazine, an edgy new Italian publication, in a Manhattan studio on West 18th Street. To create the aura of the issue's tribal theme, she was smeared from head-to- toe with a mud-like substance and clay, which was caked so thickly on her face that she could barely open her mouth. Her hair was painfully pulled back in a coiled cone of thick rope. Wearing a skirt made of beads, she was virtually doing gym squats for hours on stilettos while balancing between the trunks of two trees. Still, during the breaks, she was smiling.

"What makes a great model is somebody who understands the picture-making process. And she does," says the magazine's creative director, Alex Gonzalez. "She's a modern day Verushka," he adds, referring to the original iconic supermodel of the '60s.

"She's an amazing girl," says hairstylist Serge Normant. "That stuff on her head weighs 3 or 4 pounds, and she hasn't complained. She wants to give it 150 percent, and she's very patient. She's absolutely one of the fabulous girls of the moment."

It is a moment that Kurkova is trying to prolong. One of her strategies is to work harder than anyone else - she has worked straight through the past 23 weeks - and to do it well. Bonnouvrier says this sets her apart. "She has incredible and genuine enthusiasm when she works, but also professionalism. For instance, she has never been late once or missed a flight. Unheard of in our industry."

Says Tapscott, "She works incredibly hard and almost never says no to anything. She works weekends, takes one plane, gets off and on another to do another job. She has a work ethic that is unbelievable." One industry insider suggests she may be too ambitious, potentially overexposing herself. "She's very strong-willed and hasn't realized yet that less may be best."

On a recent Saturday, it seems like it's all catching up with Kurkova. In the three-bedroom TriBeCa apartment she shares with her shih tzu, Bella, Kurkova, coming off a double shift of planes and shoots, is just waking up at 3 in the afternoon. "I needed sleep very badly," she explains. She has learned to speak English from a well-known acting coach, but she says, "I wanted to learn and understand the language, but I didn't want to lose my accent. I think it's sort of cute, don't you?" Sigh. Very.

Like many other models, Kurkova was a gangly, gawky girl. "I looked just like a boy, but I was taller than most boys around me."

Her foray into modeling began when a close girlfriend sent her photograph to an agency in Prague. From that she got three jobs - a commercial, a print ad and a runway show. But she didn't really know much about the industry. "You have to understand, they don't really have fashion there," she says. "We didn't know about Chanel or Prada."

She learned quickly. On a lark, she and another aspiring model jetted off to Milan to make the rounds. There, Miuccia Prada took note of the teen and sent her down her runway, signing her to a Miu-Miu contract. Not long after came New York and Vogue.

When she's not working, the veneer of the gorgeous goddess slips, and she becomes an effervescent, big, still beautiful, kid. High-fashion gives way to comfort clothes, and her favorite outfits off the set are casual - jeans, slouchy drawstring sweatpants, sneakers.

One of her passions is watching basketball, probably because her father, Josef, was a star player on the Red Army team. (Today, he's the town's police chief.) When she's in New York, Kurkova tries to see as many Knicks games as she can, sitting front- row, near Spike Lee. "I love the Knicks. Spree and Houston, they're the best ones."

Despite her lean, beautiful body - she is not, by the way, one of those frighteningly skeletal models - she claims to eat like a horse. "People think that models never eat, but we really do." Her favorite spots include Le Roc, a restaurant near her apartment, Nobu and any place that serves Czech cuisine. "It's the best food, but it's heavy. When we get a salad, we think, who are they serving, animals? It is real food." Her favorite dish? Unequivocally, goulash.

Off-hours, she loves hanging with her Swiss-Italian boyfriend (not a model but in the business), people-watching (how ironic) and partying - that means listening to music and dancing like crazy. She doesn't drink or smoke. "I didn't grow up that way, around alcohol or anything. I'm just a good kid." If she's addicted to anything, it is music - oddly old music. "I love Dusty Springfield," she says, uninhibitedly belting out a song. "Old Michael Jackson, old Madonna, even the Bee Gees, and I've just discovered the Carpenters.... I've fallen in love with them."

Her exercise routine is sporadic because of her travels, though she is committed to trying Pilates and occasionally going for a swim at the gym. As for beauty secrets, a source says, "She's 18, for God's sake, that's her secret." But she loves massage and occasionally gets facials from Christine Chin, who owns an eponymous skin-care spa on Rivington Street. Chin has said that Kurkova's skin is so flawless and poreless that it is like the surface of a shelled hard-boiled egg.

If there are rumors to be started here, this might be one. She says the most interesting person she's met through her career to date is actor Joaquin Phoenix. "Oh, I don't know if I should say his name," she giggles. "I like Joaquin. He's very funny and nice." Hmmm.

When it comes to business, she is less forthcoming. Did she know Gisele was sitting it out this season? "No, I did not know that. But it's fine." Is she friends with Gisele or any of the other models? "We only see each other at shows, because we're all so busy," she says diplomatically. She is extremely close to her family, though probably talks to the entourage she has assembled - a publicist, a manager, an agent - most. She has what she calls "a very small circle" of good friends in New York who make her happy, and many old pals back in Dec?n with whom she maintains close relationships.

But, if there is anything that defines the essence of Karolina Kurkova, it is focus on her career. "There are many things I want to do in the future, but right now I have to find my hole on the hill, to work hard and build my empire and my name," she says. "I don't like to do things halfway. If you want something, you have to give everything. This is my window, and this window is going to help me open 20 more."

Will she take the leap from almost famous to superstar?

"It will be interesting to watch her," says Vogue's Tapscott. "She is fairly recognizable, but she's not a household name. John in Omaha doesn't know her yet. But because of her energy, she doesn't come across as trendy ... someone who's going away. I think she's here to stay."