Ex-BMG Boss Buys Air Catalog SkyMall
December, 6 2005
New York Post 12.06.05
Tim Arango
SkyMall, whose catalogs featuring an oddball assortment of items from home defibrillators to antique popcorn machines are ubiquitous on most U.S. flights, is being sold to a private equity group that includes the former BMG CEO Strauss Zelnick.
ZelnickMedia and private equity firm Spire Capital Partners, which put up the bulk of the money, agreed to buy SkyMall from Gemstar-TV Guide for $52 million — becoming the latest acquisition in the direct-marketing industry for Zelnick. Gemstar is controlled by News Corp., which is the parent company of The Post.
SkyMall joins two other major direct-marketing acquisitions for Zelnick: Time-Life Inc., which the firm purchased in 2004; and catalog retailer Lillian Vernon.
SkyMall will remain a separate entity, while Time Life and Lillian Vermon have been combined under the Direct Holdings Worldwide moniker.
While Spire is the majority partner, ZelnickMedia began pursuing the deal, which closed last Friday about three years ago and brought Spire into the fold.
SkyMall's catalogs are in the seat pockets on 88 percent of U.S. flights — meaning they are seen by a potential 650 million passengers a year. It also operates the SkyMall.com Web site.
In a statement, Rich Battista, head of Gemstar-TV Guide, said, "SkyMall is not core to the company's plans going forward." SkyMall, based in Phoenix, was founded in 1989 and bought by Gemstar in 2001.
According to a Securities and Exchange Commission filing, SkyMall generated $7 million in operating income last year on $56 million in revenue. For the nine months ending Sept. 30, the company reported operating income of $4 million on revenue of $49 million.