Forbes COO Shuffle: Did Private-Equity Firm Ease Tim Forbes Out?
To be sure, he's not going far. In fact, the move is being spun as a promotion for Tim, who will graduate to some as-yet-unspecified higher-level position once the company has selected a candidate to replace him as COO. A spokeswoman says the shift reflects the consolidation of two jobs formerly held by Jim Berrien, former president and publisher of Forbes magazine, and Jim Spanfeller, whose exit as CEO of Forbes.com last summer was first reported by DailyFinance.
"This has been planned since we completed the integration of Forbes Digital and Forbes Magazine Group," says the spokeswoman. "Where there were two presidents, Jim Berrien and Jim Spanfeller, there now will be one reporting to Tim and Steve." Two-time presidential candidate Steve Forbes is the company's CEO and chairman.
That a new COO was being sought has been rumored for some time among Forbes insiders, who suspect the change comes at the urging of Elevation Partners, the private-equity firm that bought a large minority stake in the company in 2006. The business was in much better shape at the time of Elevation's buy-in. Since then, plunging advertising revenues have necessitated a gutting of the editorial staff.
Elevation can't directly force an executive change: The Forbes spokeswoman confirmed that the family still owns a controlling interest in the company. But Elevation's leverage increases with the passage of time: Its investment is now almost four years old, and private-equity firms generally become impatient to cash out after five years. Although the details of the deal between Forbes and Elevation aren't public, it is thought to be structured in such as a way as to give Elevation the option to exit beginning in 2011. That means the family could be forced to choose between buying back Elevation's stake at an inflated price or accepting its sale to a less-desirable third party. Giving the firm a greater hand in how the company is run, then, may be the best way of postponing that painful choice.
Asked about the speculation that Elevation was flexing its muscles, the Forbes spokeswoman said, "Elevation have been supportive partners through a challenging period in the media marketplace, and remain so now that things are improving."