National Lampoon Looking to Build Beyond 'Animal House'
By ANDREW SIMONS, Staff Reporter
National Lampoon Inc. wants to remake itself starting with who's sitting in the chief executive's chair.
The company is about to close on the first portion of what's expected to be an $8.5 million round of equity funding, and a portion of the funds will be used to pay Jim Jimirro, its chief executive for the last 13 years.
Chief Operating Officer Dan Laikin wouldn't say who was providing the financing, what stake would be given up or when the full round would be closed.
He did say that he would become chief executive once Jimirro was paid an estimated $2 million. Jimirro, who declined comment, owns 200,000 shares of the company, or 6 percent.
Shares were trading at $3.50 last week, putting the value of his stake at $2.1 million. Since reaching a high of $7 last September, the thinly traded stock has fallen 37 percent.
The decline, said Laikin, was the result of normal activity in a company where insiders hold nearly 90 percent of outstanding shares, allowing smaller traders undue influence on price fluctuations. (No equity analysts follow National Lampoon, and only two mutual funds hold shares in the company.)
National Lampoon, whose primary business is exploiting the once-popular comedy brand, is in a growth stage, with second quarter revenues for the period ended January 30 of $714,132, from $128,329 a year earlier.
The company attributed its revenue jump to income generated by a television pilot, four comedy videos and royalty payments on the "Animal House" name.
But higher operating expenses, which increased to $2.2 million in the second quarter from $1.5 million a year earlier, have come as a result of the expansion effort. The second-quarter net loss amounted to $1.4 million, compared with a loss of $1.3 million in the like period last year.
The company has been converting the New York-based Burly Bear Network, which it purchased in 2002 for $600,000 in cash and stock, into the National Lampoon Network, using Burly Bear's model of delivering cable programming to college dorm rooms to expand its brand.
In the past year, Laikin said, affiliates and advertisers have been added to the cable station, which is seen on 610 campuses with 4.9 million potential viewers.
"We are very excited about the strength of the National Lampoon brand in film and television licensing," said Jim Friedlich, a partner with New York investment firm ZelnickMedia, which has a less than 5 percent stake.
"It continues to resonate among young people and its traditional audience of baby boomers. (Laikin and his team) have been driving growth in film, television and books, and potentially into a re-launched Lampoon magazine," he said.
The origins of National Lampoon can be traced to the Harvard Lampoon, which published parodies of Time and Playboy magazines in the 1960s. Staff members Doug Kenney, Henry Beard and Rob Hoffmann launched National Lampoon in 1970.
At one time boasting more than 2 million readers, the Lampoon spawned radio shows, comedy tours and its biggest hit, 1978's "National Lampoon's Animal House," before falling into decline in the 1980s. The "Animal House" film has generated an estimated $200 million in box office and rental revenue.
In 1990, Los Angeles-based J2 Communications Inc., a video production and distribution company headed by Jimirro, a former Walt Disney Co. executive, acquired National Lampoon and focused on licensing the brand. But while movies in the "Vacation" series did reasonably well, the magazine operations were suspended in 1998, when its circulation fell to about 200,000.
Laikin, meanwhile, is part of Indianapolis-based investor Four Leaf Management Group, which started building its stake in the company in 1999, accumulating a 50 percent interest by March 2001.
That year, J2 and Jimirro agreed to sell a majority stake in the business to Four Leaf, but the deal fell apart and the two sides ended up in court. They settled in 2002 when Jimirro agreed to take $1.1 million in unpaid compensation and a salary of $500,000 a year to remain chief executive. Even so, Laikin said he and his group, which now own 80 percent of National Lampoon, have been running the company.
"I came in as COO. I've been acting as CEO. I've built a management team that has been executing the business plans," said Laikin.
Doug Bennett, a former president at Macmillan Publishers, joined in 2002 as executive vice president. Errol Gerson, former director of new media at Creative Artists Agency, will become COO when Jimirro leaves.
For reprint and licensing requests for this article, CLICK HERE.