Friday, April 22nd, 2005

New York Post: The Source Has Defaulted on Multi-Million Dollar Loan

From Keith Kelley in the New York Post:

“In the wake of a messy sexual harassment lawsuit, hip-hop magazine The Source is wrestling with a host of financial, advertising and circulation woes, sources told The Post.

In recent months, insiders said The Source has defaulted on a multi-million bank loan and withdrawn from the Audit Bureau of Circulations, the chief auditor for circulation in the industry.”

The Source has defaulted on a $20 million loan, and withdrawn from the Audit Bureau, which is the independent circ-verification company that allows a magazine to establish its “guaranteed rate base”, the fundamental number used to price advertising.

More bad numbers:

“Last year, it was down 11.3 percent in pages to 1,040.62 and this year it appears likely to fall below the magical 1,000 page barrier.

The magazine’s ad revenues were down 13.9 percent to $5,972,905 and its ad pages are down 16.1 percent to 175.33.”

Its distributor is now advancing money to the magazine.

An insider tells me this is the other shoe dropping, re: our earlier discussion on the importance of The Source’s circulation base. Speculation that a “takeover” bid may be in process has been rampant over the past week.

Meanwhile, Benzino is, in his own words, “looking out over the bay and eating stone crabs.” The article concludes:

David Mays, the chairman, did not return calls.

“He did not return calls because he said you’re irrelevant,” said Scott. “He told me to call you back. Our personal finances are none of your business.”

posted by Jeff Chang @ 11:00 am | 3 Comments

3 Responses to “New York Post: The Source Has Defaulted on Multi-Million Dollar Loan”

Anonymous says:

April 22, 2005 at 12:21 pm

After I read Reginald Dennis’ interview, I definitely got the sense that Benzino and Mays have some kind of romantic (albeit abusive) relationship going on. anyone else get that?
Anonymous says:

April 22, 2005 at 1:08 pm

I definitely got the sense that Benzino and Mays have some kind of romantic (albeit abusive) relationship going on

people have been speculating about the nature of their relationship for years.

1. “romantic”
2. blackmail/strongarm extortion of some sort
3. dave needed a “tough” black guy repping for him in the hip hop universe
4. Z gave M money early on, and has never let go

whatever the case, the relationship is, as you stated, abusive. extremely. what we are watching is the slow downward swirl of an entity, a magazine, having a nervous breakdown. Z the megalomaniac and his weakened partner-in-crime M are dead but too dumb to lay down. Anyone here read Of Mice And Men? Think of the main characters, and you’ve got almost got Z and M.

and re the ABC numbers? It’s worse than I even thought.

TRAGIC. Pitiful. Hip hop deserves more than this.
Anonymous says:

April 22, 2005 at 1:19 pm

I bet Lenny would have been a better MC than Benzino.

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