Penton Taps Insider Nussbaum as CEO
By Margo McCall -- Tradeshow Week, 6/28/2004
After a three-month national executive search, Penton Media's board has selected insider David Nussbaum to succeed CEO Thomas Kemp.
Nussbaum, 46, joined Penton as an executive vice president and group president in 1998 after working 18 years for Miller Freeman. He currently oversees Penton's Technology and Lifestyle Media division, which includes the New Hope Natural Media group, producer of the successful Natural Products Expos. Nussbaum assumes the CEO's duties July 1.
Members of the search committee said they selected Nussbaum because of his knowledge of the company and its markets, as well as his strategic vision for Penton's future.
"I think he's a terrific selection. I'm glad they went inside. I don't think they could have found anyone outside who would have been a better selection," said Don Pazour, CEO of Access Intelligence and Nussbaum's former boss at Miller Freeman.
However, unlike Kemp, whose eight years with Penton will end June 30, Nussbaum will not also hold the chairman's position. That title will go to Royce Yudjoff, co-founder of ABRY Partners, which invested $50 million in Penton two years ago to help it pay down its debt.
ABRY's displeasure with Penton management was reportedly behind Kemp's March announcement that he would resign. Although Kemp is credited with engineering a company turnaround through aggressive cost-cutting, he was also at the helm when Penton invested heavily in technology events and magazines, a decision that had dire results when those markets collapsed.
Considering Nussbaum's background, as well as events' importance in the overall business-to-business media mix, Pazour said he expects Penton to retain a strong interest in tradeshows. At Miller Freeman, Nussbaum oversaw the New York division, which included more than 25 tradeshows and 25 magazines.
Pazour said Nussbaum has aggressively developed the online side of the Penton sectors he oversees. Nussbaum's groups include IT Media, Electronics OEM and Business Technology. "He is always looking at new structures and business models for face to face," Pazour said.
Robert Crosland, managing director of Admedia Partners, said he suspects that the search committee was initially interested in finding an outsider with a fresh perspective. But ultimately, "they went out there and looked and didn't find a knight in shining armor. They just couldn't get anybody from the outside who was willing to take it."
Crosland said Nussbaum's internal knowledge should prove useful. He added that Kemp's second-in-command, COO Dan Ramella, was probably too closely affiliated with Kemp to be considered for the top post.
At its peak, Penton relied on its 173 annual events to supply nearly half of its revenue. But after shedding unprofitable events and selling others to help pay down debt, the publicly traded Cleveland company now produces only 50 events per year. Over the last two years, Penton has laid off 716 employees and closed 30 offices worldwide. Its stock has been delisted.
In recent quarters, Penton's businesses have shown signs of stabilizing. During the first quarter, the company reported that revenues of $54.5 million were flat, and its $5.2-million net loss slightly higher.
Kemp is slated to receive $2.4 million severance, the equivalent of one year's salary. There's no word on what he'll do next. Crosland characterized Kemp's departure as "the last bit of the cost-cutting."
The company still has $31 million cash and access to $40 million credit. Its biggest expenditure this year will be $37 million in interest on $329 million debt. In its last quarterly filing, Penton management estimated the company has enough cash to sustain operations through next March.
