What did Conde Nast really pay for Knapp's magazines? - Conde Nast Publications Inc.; Knapp Communications Corp

Conde Nast won Architectural Digest and Bon Appetit with a bid of some $170 million, but sources close to the negotiations say that the real cash considerations are nearer to $120 million. Deferred subscription liabilities--orders that were paid for by subscribers but not yet serviced--amount to some $30 million, says one source.

The long-term lease that still has nine years to run in the posh Wilshire Boulevard area of Los Angeles will cost Conde Nast about $9 million--roughly $1 million a year. The cost could go slightly higher if some of the other tenants move out, but it is unlikely to go over the $11 million total value of the lease. Conde Nast plans to move its West Coast offices into the building as current leases expire.

Also, Cleon T. "Bud" Knapp guaranteed some extremely lucrative contracts to long-term employees. "He was very generous to his people," says another contact involved in the bidding. The cost? Reportedly some $10 million-plus.

If the final price tag was a multiple of 12 to 14 times earnings, that would place it close to an all-time record high for magazine deals. Instead, sources say the real price tag was more in the 10 to 12 times multiple range.

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