Rick LePere and Phil Merrill: Making Good Money by Doing Good Journalism

By Jack Limpert

Talk about two different people:

Phil Merrill grew up in New York City, edited the student paper at Cornell University, worked with TV’s Mike Wallace, was in the State Department, bought a newspaper in Maryland, then bought a magazine in Washington.

Rick LePere, one of eight kids, grew up in Johnstown, Pennsylvania, never went to college, came to Washington with no money and no connections, got a job as the night cook at a hamburger joint, worked in the mailroom of a magazine, and ended up consulting for magazines all over the country.

Phil bought The Washingtonian in 1979 and ran it until he died, at age 72, in 2006; his daughter Cathy now is the magazine’s publisher. When Phil  bought the magazine, it had readers but was losing money. Within one year, it was making plenty of money.

Rick began helping The Washingtonian with its circulation strategy in the mid-1970s, and before long he was helping the magazine—and many others across the country—improve its financial performance. Rick knew what made a magazine work and he helped start a lot of them. He died Tuesday morning, February 4, at the age of 68.

They were numbers guys—Phil got his savvy at Cornell and Harvard; we had trouble figuring out where Rick got his.

Rick did mention a few years ago that he was dyslexic, which may have been why his high school teachers didn’t think he was smart enough for college. In recent weeks, as he was battling his illness, he told me that when U.S. News & World Report promoted him from the mailroom to the circulation department, he discovered that “I could look at a page of numbers and tell if some didn’t look right.”

Phil ran The Washingtonian for 27 years but he had a lot of other interests. He knew the players in foreign policy and national security, took a leave to be U.S. Ambassador to NATO in the late 1980s, and ran the Export-Import Bank from 2002 to 2005. With help from Rick, he was very good at figuring out what made a publication successful. In the 1980s I once tried to talk with him about what went into winning  National Magazine Awards and he said, “I don’t care how many awards you win. The only two numbers I care about are the renewal rate and newsstand sales.”

If you want a successful magazine, Phil and Rick knew that the key number was a high subscriber renewal rate—ours was 85 percent. That meant you had a steady stream of renewal income and you had to spend almost nothing on subscription deals or direct mail. If you also had good newsstand sales, a decent number of those one-time buyers would end up as subscribers.

If you had a strong subscriber base, that sent a message to advertisers that you had a magazine with loyal readers who really liked reading it—and looking at the ads.

Rick ran our annual budget meeting where the editor, along with other department heads, asked for X amount of money for the next year. One year I thought I’d done well  and he was finished. As I got up to leave, he looked up from a page of numbers and said, “Let’s talk about this number for editorial entertainment and travel. It doesn’t look right.”

From an editor’s point of view, what was most important about Phil and Rick, as different as their backgrounds were, was what they had in common: They understood that you needed a long-term strategy to be successful in publishing. The  foundation of that strategy was strong editorial that brought in loyal readers and that led to solid ad revenues.

Phil always said he didn’t care about year-to-year numbers—he was interested in what he called the franchise value of the magazine. He was like a homeowner who was willing to invest in renovations that increased the value of the house.

Rick had helped several Washington friends start restaurants and we once talked about how a magazine can be like a restaurant. A place opens with a top chef, it serves good food, gets a loyal clientele, and makes money. But what if the restaurant owner begins to think like this: “Our lobster bisque is one of our big draws but the lobster is expensive. Let’s start using a little less lobster—the customers won’t notice.” So they use a little less this year and little less next year and soon diners are saying, “You know this food isn’t all that good. Let’s eat somewhere else next  week.” Rick and I agreed that once you cut corners and lose customers, you’ll have a hard time getting them back. Put another way: Don’t water the soup.

Phil and Rick: Two smart, successful guys who understood that short-term thinking doesn’t work in publishing. Yes, they knew that the digital revolution makes everything move faster. Early on Phil pointed out one big difference between print and digital. Print readers scan a magazine and are comfortable looking at both stories and ads. Most digital readers are seeking specific information and ignore the ads. Digital readers are irritated by anything—such as pop-up ads or demands that you watch a video—that gets in the way.

Neither Phil nor Rick had a clear fix on where meaningful web revenue will come from—paywalls, native advertising, whatever comes next. They did know that publications like the New York Times, which invest in great editorial and have loyal readers, are much more likely to survive long enough to figure out the digital revenue puzzle than papers, like the Chicago Tribune, which have been tortured by all the helter-skelter cuts.

Rest in peace, Rick. You and Phil were tough numbers guys but together you knew what it took to be successful in publishing and you knew what was needed to do great journalism.


  1. Leslie Milk says

    Rick and Phil were two of the smartest men I’ve ever known. In my experience, both had very little patience for small talk. They got to the issue at hand — why are we doing this, what makes sense. They also introduced me to some extraordinary people. Thanks to Rick The Washingtonian honored some of them as Washingtonians of the Year, including the founder of the Yellow Ribbon Fund.

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