CapitalWorks Private Equity Firm Cleveland Ohio

Stack Magazine Gets Started

Five years ago, when Nick Palazzo and Chad Zimmerman were high school football teammates in suburban Cleveland, they had a hard time tracking down advice for improving their performance. When they went to college — Mr. Palazzo to Harvard and Mr. Zimmerman to Carnegie Mellon — they heard the same complaint from their teammates. Thus was born an idea: start a magazine providing high school athletes with training tips and other pointers for revving up their skills.

By the time Mr. Zimmerman graduated in 2004 (one year after Mr. Palazzo finished his schooling), they had written a business plan. Within six months, they raised well over $1 million, most of it from a local private equity firm.

The magazine, called Stack, made its debut in February with a free distribution to 3,200 high school athletic directors. ‘’My parents expected me to get a job on Wall Street,’’ Mr. Palazzo said. ‘’They weren’t very happy when I told them what I wanted to do.’’

The partners belong to a hardy band of entrepreneurs who have started magazines, often aimed at niche markets. There were 1,006 introductions in 2004, up from 953 in 2003, according to Samir Husni, chairman of the journalism department at the University of Mississippi and a magazine consultant. Last year was the first time the number topped 1,000 since 1998. While any new venture is a gamble, magazines are considered especially risky. ‘’The chances of success are exceedingly slim,’’ said Robert Garrett, president of ADMedia Partners, a New York investment bank for media companies. About 90 percent of new publications are started by independents, and most fail within a year, according to Mr. Husni.

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