by Timothy McQuiston Vermont Business Magazine Vermont Life Magazine will sunset print operations at the end of the current fiscal year, June 2018, due to years of chronic operational deficits as a result of a changing media landscape. A digital brand will continue in some form, but the summer issue will be the last print issue and the future of the famous calendar beyond 2019 has not been determined. The state had tried to sell Vermont Life earlier this year. Vermont Business Magazine was one of several bidders. But the state said that none of the bidders came close paying down the $3.5 million debt that Vermont Life had accumulated over the years.
“Unfortunately, over the past decade the magazine has run operational deficits incurring a debt totaling about $3.5 million. The Vermont Life staff, the Department of Tourism and Marketing, and the Agency of Commerce and Community Development have worked diligently to find a way forward to preserve this asset. As third quarter financial reports have become available, reflecting weaker than expected advertising and subscription sales, it has become clear that continuing operations into fiscal year 2019 (FY19) would not be possible without expanding the magazine’s debt,” said Secretary of Commerce and Community Development Michael Schirling. “In the end, given the rapidly changing media landscape, intense competition we have decided to retire this historic publication as a print magazine.”
The Scott Administration has questioned whether Vermont Life could continue because of its financial problems since Phil Scott was elected governor in 2016.
Earlier this year, a decision was made to keep Vermont Life a state asset under the Department of Tourism and Marketing. That decision came after a recommendation by a team empaneled to review responses to the Request for Proposal (RFP) issued in the fall of 2017 (see below for additional details). Financial reports available at the time indicated progress in balancing the annual Vermont Life budget but showed little hope of reversing the $3.5 million debt the magazine had accrued.
“We made every effort to make the magazine financially viable and position it to repay the many years of debt it has accrued,” Schirling said. “Sometimes even the best efforts aren’t enough to change the reality. As we modernize our marketing efforts, we will be looking for an opportunity to give the Vermont Life brand new vitality using our always evolving digital platforms.”
Schirling said the agency does not anticipate a deficit for the current fiscal year that ends June 30th.
In a statement, the agency released some additional detail for Vermonters, subscribers, and other stakeholders:
Wasn’t there a recent effort to “sell” Vermont Life? To address the magazine’s debt, legislation passed in 2017 directed the Secretaries of Commerce and Administration to issue a Request for Proposals to explore sale, partnership, or other options relative to the future of Vermont Life. Last fall, a review committee conducted an extensive review of the responses to the request for proposals (RFP) and made a recommendation to keep Vermont Life a State asset. That assessment was based on the quality of the proposals, financial information available at the time, and assumptions based on the most recently available trends. The Secretaries of Commerce and Administration accepted the review committee recommendation and presented this option to the Legislature.
What would have happened if one of the RFP responses had been accepted? The best response would have netted the State $25,000 and the possibility of sharing revenue in the future. For the State to have seen profit from that proposal (and repay the $3.5 million debt), revenue would have required performance above anything seen in about two decades. All Vermont Life staff positions would have been eliminated in all scenarios proposed in RFP responses.
Why is this decision being made now? As the third quarter financials became clear, it was obvious the magazine would not reverse declines in advertising revenue and subscriptions as forecast. Prior to the legislative discussions and subsequent RFP, Vermont Life experienced modest increases in advertising revenue and subscription sales. These were the basis of a forecast that hoped to overcome competition and change in the media market. Unfortunately, ad and subscription sales are once again declining and are not recoverable on a timeline that would enable balancing the budget in FY19.
What does this mean for staff? This is our most important focus. The remaining six (6) staff members at Vermont Life have been notified about the impending reduction in force. They are very talented people with transferable skills. We will do everything within our ability to assist them in this transition.
What about the magazine - is this the end of “Vermont Life?” This turn of events signals the end of Vermont Life as a print magazine. The final issue— Summer 2018– will be sent to subscribers this week (that timing is coincidental, not planned) and available on newsstands on May 15. Vermont Life is a strong brand that the State will retain and, in the future, will transition it to a digital platform to continue to tell the stories of our great State.
I am a subscriber. What will happen? The last issue of the magazine goes to subscribers later this week. Subscribers will receive refunds for unfulfilled magazine issues after the summer issue. Please stay tuned to the Vermont Life website and Facebook page for details.
What about the calendars? The 2019 calendars are currently at the printer. They will be available for sale in early June. The future of the calendars is not yet determined.
What about the outstanding debt? The Administration will work with the Legislature to pay down the $3.5 million debt the magazine accrued over the previous 10 years.
Source: Vermont ACCD 5.10.2018