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The Source Denied A Multi-Million $$ Loan, Pulls ABC Status
After months of speculations, details regarding The Source magazine's financial problems have surfaced.
According to the New York Post, the self-proclaimed Hip-Hop bible was denied a multi-million dollar bank loan in recent months. The mag has also pulled out of the Audit Bureau of Circulations –the lead auditor for circulation in the publishing industry.
The Source seems to be plagued by internal problems. Advertisers count on the independent reports, provided by the Audit Bureau of Circulations, to ensure that a publication is matching the paid circulation that it promises to advertisers. Ad rates are based on a mag's circulation. Upon being questioned on The Source's withdrawal from the Audit Bureau, Zino replied to the NY Post, "So what?! A lot of magazines aren't audited."
The Source's circulation hasn't been audited since June 2003. According to reports, The Source also didn't file a publisher's statement in the second half of 2004. Furthermore, its circulation statement for the previous six months indicated that it continually missed its promised 500,000 rate base. A source revealed that the company was denied a $20 million loan by its main provider, Trexton of Providence, R.I. Trexton didn't return a call for comments.
"Maybe he didn't return your call because you're irrelevant," Scott told Media Ink regarding Trexton not returning the call.
The Source is reportedly still making several millions per year and is decently profitable, yet the ad pages are shrinking. In 2004, it was down 11.3% in pages to 1,040.62 and this year it seems to be headed below the 1,000 page mark. According to The Publishers Information Bureau, the mag's ad revenues were down 13.9% to $5,972,905 and its pages down to 16.1% to 175.33 in 2005's first quarter.
Reports also say that The Source received several $500,000 "super advances" or loans from national distributor Curtis. The company collects money from wholesalers who supply newsstands and supermarkets and send it back to the publisher. Curtis President Bob Castardi declined to comment particularly on The Source.
"They've had some hiccups, but I feel confident they will be around for awhile," Castardi stated.
Though he wouldn't comment directly on The Source, Castardi shared that it was common for him to help a magazine in a jam. Sources say Black Enterprises had invested $17 million into The Source and has seen little to no return from their investment. According to the Post, The Source's financial problems are related to its incapability to match subscriptions, which lead to increasing circulation problems. As of March 21, 2005, the mag has made a "voluntary temporary suspension of service" a circulation bureau spokesman revealed. Therefore, there will be no more ABC date collected by The Source. The spokesman declined to detail the reasons for the suspension and Mays 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."
In related news, The Source has mockingly been put up for sale on eBay. The mag was put up last week and bids began at the low price of $0.97. In the item description, the mag is described as a once prominent publication which has gone downhill. The description also states, "The Source Magazine comes complete with shameless plugs of the co-owner's rap groups and record labels. It is even equipped with tabloid articles about label executives who would not sign the co-owner's artists. The Source Magazine could be yours now. This purchase comes complete with loads of crappy back issues that nobody in their right mind would wanna buy."
To date, 61 bids have been entered with the highest reaching $3,150.
Source: sohh
According to the New York Post, the self-proclaimed Hip-Hop bible was denied a multi-million dollar bank loan in recent months. The mag has also pulled out of the Audit Bureau of Circulations –the lead auditor for circulation in the publishing industry.
The Source seems to be plagued by internal problems. Advertisers count on the independent reports, provided by the Audit Bureau of Circulations, to ensure that a publication is matching the paid circulation that it promises to advertisers. Ad rates are based on a mag's circulation. Upon being questioned on The Source's withdrawal from the Audit Bureau, Zino replied to the NY Post, "So what?! A lot of magazines aren't audited."
The Source's circulation hasn't been audited since June 2003. According to reports, The Source also didn't file a publisher's statement in the second half of 2004. Furthermore, its circulation statement for the previous six months indicated that it continually missed its promised 500,000 rate base. A source revealed that the company was denied a $20 million loan by its main provider, Trexton of Providence, R.I. Trexton didn't return a call for comments.
"Maybe he didn't return your call because you're irrelevant," Scott told Media Ink regarding Trexton not returning the call.
The Source is reportedly still making several millions per year and is decently profitable, yet the ad pages are shrinking. In 2004, it was down 11.3% in pages to 1,040.62 and this year it seems to be headed below the 1,000 page mark. According to The Publishers Information Bureau, the mag's ad revenues were down 13.9% to $5,972,905 and its pages down to 16.1% to 175.33 in 2005's first quarter.
Reports also say that The Source received several $500,000 "super advances" or loans from national distributor Curtis. The company collects money from wholesalers who supply newsstands and supermarkets and send it back to the publisher. Curtis President Bob Castardi declined to comment particularly on The Source.
"They've had some hiccups, but I feel confident they will be around for awhile," Castardi stated.
Though he wouldn't comment directly on The Source, Castardi shared that it was common for him to help a magazine in a jam. Sources say Black Enterprises had invested $17 million into The Source and has seen little to no return from their investment. According to the Post, The Source's financial problems are related to its incapability to match subscriptions, which lead to increasing circulation problems. As of March 21, 2005, the mag has made a "voluntary temporary suspension of service" a circulation bureau spokesman revealed. Therefore, there will be no more ABC date collected by The Source. The spokesman declined to detail the reasons for the suspension and Mays 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."
In related news, The Source has mockingly been put up for sale on eBay. The mag was put up last week and bids began at the low price of $0.97. In the item description, the mag is described as a once prominent publication which has gone downhill. The description also states, "The Source Magazine comes complete with shameless plugs of the co-owner's rap groups and record labels. It is even equipped with tabloid articles about label executives who would not sign the co-owner's artists. The Source Magazine could be yours now. This purchase comes complete with loads of crappy back issues that nobody in their right mind would wanna buy."
To date, 61 bids have been entered with the highest reaching $3,150.
Source: sohh