Revolt at Curtis

Word of the revolt brewing inside Curtis Publishing Co. has been wide spread in the trade for months--partly because of leaks from the combatants themselves, who have been jockeying for outside editorial support. Since neither the image nor the health of this once sturdy old magazine house, now fallen on lean times, could possibly improve by airing the story of a savage, behind-scenes struggle for power, the contestants might have been expected to keep this intelligence where it be longed: behind scenes. But last week Curtis' unhappy secret was out. In a story obviously leaked by participants, the New York Times splashed the revolt all over Page One.

The rebel leaders were identified as Editor in Chief Clay Blair Jr., 39, and Marvin D. Kantor, 37, head of the company's magazine division and a relative newcomer to Curtis. The man they were out to topple was President and Board Chairman Matthew J. Culligan, 46, brought in by Curtis in 1962 to lead the company back to recovery. Last May, the Times reported, Blair and Kantor had aired their grievances before the board. But when this maneuver failed, the dissidents sought to spread the rebellion. In September, Blair convoked a secret meeting at a steakhouse outside Greenwich, Conn., where he lives, and helped frame a bill of particulars against the Culligan management. On Oct. 1 this document, signed by Blair, Kantor and 13 top-ranking editors and advertising officials, was sent to Curtis' board. The letter not only accused Culligan of mismanagement, but served notice of the intent of all 15 signatories to resign unless Culligan was relieved of command.

Revolving Doors. Curtis is in poor condition to support any kind of warfare, especially internal. Despite a special newspaper supplement fortnight ago to advertise its occupancy of the sparkling new Saturday Evening Post Building on Manhattan's Lexington Avenue, the company is in deep financial trouble. Since 1961 it has lost a total of $34.5 million--a figure that includes the $8,000,000 deficit recorded through September of this year. In 1963 Curtis was rescued from near bankruptcy by a last-minute $35 million loan from a group of six banks--a loan that must be repaid, with $10 million in interest, in the next six years.

Editor in Chief Blair's efforts to jack up Curtis magazines have met with little success. On four of them--the Ladies' Home Journal, Holiday, American Home and Jack & Jill--a revolving-door policy for editors has had little more effect than to unsettle the incumbents. The Journal, for example, which in 1961 lost its crown to McCall's as the leading woman's magazine, has yet to recover it.

Shrinking Revenues. For the Saturday Evening Post, Blair set a course that borrowed much from the techniques and styles of existing magazines--among them LIFE, Esquire, TIME and Look--without adding much that was new. Blair also led the Post on a campaign of "sophisticated muckraking"--his term for controversial journalism--that gained the Post well-publicized libel suits but few new followers. As to advertising, the Post, which accounts for two-thirds of Curtis' magazine revenue, has not fared well either. Since 1962, its annual advertising revenue has shrunk by some $6,000,000.

For Curtis' editorial and economic crisis, Blair was ready to blame Adman Culligan. "Joe Culligan," said he, "is a great guy to know--after 5:30." Blair succeeded in selling this view to Marvin Kantor, one of two new men placed on Curtis' board by a group of Wall Street investors in 1962. Kantor had been a partner in J. R. Williston & Beane, the brokerage firm that was shattered last December after tankfuls of vegetable oils, supposed to be one of its principal assets, proved to be nonexistent.

Day of Decision. Together, Blair and Kantor constructed a case against Culligan--some of it trivial. They objected, for example, to the sumptuous private suite that Culligan keeps at Manhattan's St. Regis Hotel for late evenings in town--and for which Curtis is billed.

But their chief argument is that Culligan's interest in editorial salvage work has waned, particularly since the discovery of a rich copper-ore body in Ontario, adjacent to a Curtis holding of timberland. Since then, Culligan has filled the role of prospector with enthusiasm. Texas Gulf Sulphur, which made the discovery, has promised Curtis a mere 10% of the net profit in mining Curtis' acres--if and when they are ever mined. Buoyed in part by the blue-sky possibilities in Ontario, Curtis stock rose to a high of 191, has since settled in the vicinity of 121--or about $5 per share above the price at which such Curtis executives as Joe Culligan and Clay Blair can exercise their stock options.

Curtis' directors tried to paper over the whole messy business with a plaintive announcement that "policy differences" would not deter them from "proceeding vigorously with plans which have been under consideration for strengthening the company's operations." But President Joe Culligan was still to be heard from. With the powerful support of Boston Banker Serge Semenenko, who put together the consortium of banks that saved Curtis last year, Culligan ripped the whole thing wide open again as he lashed back at his foes. Blair and Kantor, he decreed, were henceforth "relieved from all duties" and "placed on inactive status with temporary leaves of absence pending further action."

Action there will surely be as the rebellion rages on. Next week a special, board-appointed investigating committee is scheduled to consult and report on the validity of the Blair-Kantor charges against Culligan.

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