(page 3 of 3)Despite the optimism, Radar faces long odds. “Everyone wants to figure out how to launch a smart, pop-culture magazine, figuring they can get young people back to print,” says Northwestern’s Whitaker. “But so far, no one’s been able to show how to get the kind of mass audience that one needs to make it work for advertisers. Radar keeps saying it’s something new and something different, but it really isn’t.
”Radar’s got to generate some sort of engagement and buzz right away to make it,” Whitaker adds. “They’ve got to be the magazine version of YouTube, where young people feel they’ve got to be there. I don’t know that this idea is necessarily the one. But I’m pulling for them, and if it is, it’ll be great for the magazine industry.”
Jackson has vowed to fund the magazine for the next five years-a substantial undertaking, even if not on a Condé Nast level-which is probably why the media critics keep coming back to Ron Burkle, who placed 117th on the 2006 Forbes 400 list of the richest Americans, with a fortune estimated at $2.5 billion.
Burkle is a big investor in the Democratic Party-in March, he hosted a fundraising event at his home that helped to put $2.6 million into Hillary Clinton’s campaign war chest. And he has shown plenty of interest in media properties. In the past year, he joined with a fellow billionaire, Eli Broad, to make a run at Tribune Company (owner of Chicago), but was outbid and outmaneuvered by the maverick Chicago real-estate mogul Sam Zell. In May, Burkle’s Source Interlink, which distributes magazines, CDs, and videos to bookstore chains and grocery stores, announced it was buying Primedia’s Enthusiast Media, publishers of more than 70 special-interest magazines, including Hot Rod and Soap Opera Digest, for $1.2 billion in cash.
Burkle has known the Jacksons for years. In the late 1990s, Burkle’s private equity firm, Yucaipa Companies LLC, invested in a dot-com called OneNetNow, an early social networking site that sought to close the digital gap between whites and minorities. The firm attracted many black celebrities, including Sammy Sosa, then with the Chicago Cubs. Both Rev. Jackson and his son, Yusef, sat on the start-up’s board of directors, with Yusef serving as the board’s chairman.
Burkle and the Jacksons are no strangers to media scrutiny. There is, for example, the story of how Yusef Jackson came to own, at age 28, his lucrative Anheuser-Busch distributorship. By some accounts, the story begins with the Reverend Jesse Jackson’s launch of a boycott of Budweiser in the early 1980s, charging the St. Louis–based company with failing to award positions to blacks and other minorities. The company agreed to fund a minority distributorship program.
Some observers have linked Jesse Jackson’s actions to the subsequent success of his sons Yusef and Jonathan in winning an exclusive Budweiser distributorship from Anheuser-Busch. The story plays well in clout-obsessed Chicago-even though Yusef was 12 when his father launched the boycott, and 16 years passed before he actually bought the Budweiser business.
The details behind the Budweiser deal are far more complicated and help to explain the relationship between Yusef Jackson and Burkle. In 1996, Burkle asked the elder Jackson to come to a gathering at his home and give a talk about the need for more minorities in business. Yusef, then a young associate at the Chicago law firm of Mayer, Brown & Platt (now Mayer, Brown, Rowe & Maw LLP), went along. Yusef sat next to August Busch IV, son of Bud chief August III, and the two young men hit it off while talking about life with famous fathers, Jackson says.
Out of that meeting came the agreement, two years later, for Jackson and his brother Jonathan, a real-estate broker, to buy the Anheuser-Busch distributorship in Chicago. Jackson will not disclose the price but says he used “equity and bank debt” to finance the purchase. He also will not say how much River North earns. Annually, the business distributes more than three million cases of Budweiser and other malt beverages, teas, and waters to bars, restaurants, and sports venues in an exclusive swath of Chicago that runs from Irving Park to Roosevelt Road, and from Lake Michigan to Harlem Avenue.
Burkle has teamed up with Yusef Jackson several times since, including their $450-million play last year to buy the Washington Nationals baseball team (the team was sold to another group). In 2004 Jackson and Burkle were the high bidders, at $850 million, to buy the Chicago Sun-Times and its sister newspapers from the troubled Hollinger empire. Hollinger eventually decided against selling its Chicago properties, but Jackson says it only made him hungrier to join the media club. “It was a disappointing loss. I was interested in the Sun-Times because I thought it was a great city institutional paper, with a lot of history.” Jackson says that if the paper comes up for sale again, and the numbers are right, he will bid again.
By some expert accounts, a Jackson run on the Sun-Times would be as quixotic a media play as his backing of Radar. “Anyone interested in buying the Sun-Times would have to be very ignorant about the newspaper business,” says the veteran newspaper analyst John Morton. “No traditional publisher would be interested. It’s usually someone with a warm glow in the glands who buys a second newspaper, much to their everlasting regret.”
For the moment, the Sun-Times is not for sale, and Jackson seems focused on his new magazine. And whether it’s Burkle, or AT&T, or some other major investor he probably won’t talk about, he’s ready to consider all comers. “We’re small. We need lots of friends and lots of partners,” he says with a laugh. “It’s just like the beer business. Making friends is our business.”
Photograph: Kevin Banna
2 days ago