Abril

For decades, drivers on the Marginal Tietê, the expressway that crosses São Paulo from east to west, passed a building crowned with a green tree. It was the symbol of Editora Abril, and the eight-storey complex beneath it, opened in 1968 after four years of construction, housed the company's printing plant, its administrative headquarters and, for many years, the newsrooms of its main magazines. From there Abril published Veja, the weekly news magazine that at its peak sold more than a million copies a week, alongside women's magazines, car guides, business titles, comics and encyclopaedias sold in instalments at newsstands. Over its history the company launched more than 150 titles.

In May 2021 the building was sold at a court-supervised auction for R$118.8 million to a company controlled by the owners of a furniture retailer, who planned to turn it into a logistics centre. The sale was part of the judicial recovery plan of a group that, three years earlier, had filed for protection from creditors with debts of about R$1.6 billion, and that the founding Civita family had sold for a symbolic R$100,000.

Grupo Abril's story covers seven decades of Brazilian media. It begins with a Disney comic book, becomes the story of the most influential magazine publisher in Latin America, takes in expensive ventures into pay television, music television and the internet, and ends, for the family that built it, with the collapse of print advertising and a sale to a restructuring specialist. The company survived; Veja is still published. But the Abril of today is a much smaller business, owned by an investor rather than a publishing dynasty.

Victor Civita was born in New York on 9 February 1907, into an Italian family of Jewish origin, during one of his father's business trips. By the 1930s he was living in Italy, where his son Roberto was born in Milan in 1936. In 1938, after Mussolini's government passed its racial laws, the family left for New York; Roberto was two years old. In 1949 the family moved again, to São Paulo.

The idea for the business came from Victor's brother, Cesar Civita. In the 1930s Cesar had worked for the Italian publisher Arnoldo Mondadori, which published Disney comics in Italy, and through that connection he obtained the licence for Disney titles in Latin America. In 1941 he founded Editorial Abril in Argentina. When Victor started his own publishing house in São Paulo in May 1950, it was initially called Editora Primavera ("Spring"); its first title, an Italian-origin comic called Raio Vermelho, did not sell well. In July he renamed the company Editora Abril, "April," the month when spring begins in Europe, borrowing the name his brother used in Argentina. The company chose a tree as its symbol and green as its colour.

The first real success was O Pato Donald, a Donald Duck comic, produced from a small office in central São Paulo with six employees. The first issues were printed in Argentina by Cesar's company. According to a story often told about the launch, Victor personally pasted posters announcing "Chegou O Pato Donald" ("Donald Duck has arrived") on São Paulo's trams.

From comics, Abril expanded into magazines aimed at particular groups of readers. Capricho, launched in 1952, began with photo-novels and later became a magazine for teenage girls. Manequim, Abril's first fashion magazine, followed, and in 1961 Claudia, which became Brazil's leading women's magazine. The growth of tourism and the car industry produced Quatro Rodas, launched in 1960, and its travel guides. In 1960 Victor Civita also began publishing reference works in weekly instalments, or fascicles, sold at newsstands. Bringing encyclopaedic knowledge, previously confined to libraries and bookshops, to the corner news-stand was a large commercial success.

Roberto Civita was educated in the United States. He began studying nuclear physics at Rice University, left when he realised it was not his calling, graduated in journalism from the University of Pennsylvania and took a graduate degree in economics at its Wharton School. He also studied sociology at Columbia and worked as a trainee at Time Inc., where he was posted to Tokyo as deputy head of the magazine's bureau.

When his father invited him to return to Brazil and join Abril in the 1960s, Roberto set a condition: he wanted to create a weekly news magazine modelled on Time. The first attempt, in 1965, led instead to a monthly magazine, Realidade, launched in 1966, which reached a circulation of 400,000 copies a month and was later described as a model of editorial independence. Its success persuaded the Civitas that a weekly could work.

Roberto recruited Mino Carta, who had edited Quatro Rodas, to run the new magazine, and the two visited the five largest news weeklies in the United States and Europe to study how they were organised. According to the account of Veja's history, they advertised in other Abril magazines for intelligent, dissatisfied men and women who read a lot and always asked why, received thousands of applications, and selected a team of fifty reporters.

The first issue, then called Veja e Leia, appeared on 11 September 1968. Its cover story, "O Grande Duelo no Mundo Comunista" ("The Great Duel in the Communist World"), covered tensions in the Soviet bloc, with articles on Romania and Czechoslovakia. Its editorial set out the magazine's ambition.

The first print run of 700,000 copies sold out. The second issue sold half as many, and sales soon fell to about 100,000 copies, with the magazine losing money. Roberto Civita attributed the decline to its dense style: long articles with few illustrations that put off ordinary readers.

Veja's early years coincided with the harshest period of Brazil's military government, which ruled from 1964 to 1985. In December 1968 the regime issued Institutional Act Number Five, which suspended many civil liberties. Veja's fifteenth issue was removed from newsstands, and every subsequent issue had to pass through the government censors. When content was cut, the newsroom replaced it in protest with drawings of angels and demons and later with the Abril logo. In total, 138 texts were vetoed before censorship was relaxed in 1976, 55 of them on national politics and 25 about censorship itself. Another issue was seized by the army in 1971 for reporting on a corruption scheme involving a state governor.

Mino Carta later said that the censorship imposed on the magazine was very harsh, and he left Veja in 1976. His departure remains contested. Carta said the military asked Roberto Civita to fire him because he was considered an enemy of the government and that the state bank Caixa Econômica Federal granted the company a US$50 million loan in exchange; other accounts say he resigned. Civita maintained that his magazines were independent of government and advertisers.

What saved Veja commercially was the subscription. Abril had avoided subscriptions for fear of retaliation from newsagents, who distributed its magazines. Roberto negotiated with them, promising that Abril's other titles would not move to subscriptions for another ten years. When Veja introduced subscriptions in 1975, it finally broke even. By then it was selling around 200,000 copies a week.

Subscriptions turned out to be much more than a way to rescue one magazine. They gave Abril a direct relationship with hundreds of thousands of households, a predictable source of revenue and a delivery network that would later become a business in its own right. Over the following decades Abril built one of the largest subscription and distribution operations in Brazil.

By the 1980s and 1990s Veja was the most influential publication in Brazil. Roberto Civita became president of Grupo Abril in 1982, and after Victor Civita died in São Paulo on 24 August 1990, he took over all its operations. He served as Veja's editor-in-chief from its founding and later as chairman of the group's board and its editorial director.

The magazine's influence was clearest in 1992, when it published an interview with Pedro Collor de Mello, brother of President Fernando Collor de Mello, in which he accused the president of involvement in a scheme to divert public money with his former campaign treasurer, Paulo César Farias. The interview set off a series of further accusations and investigations that ended with Collor's impeachment and resignation later that year.

Veja's power also made it a target of criticism. Its political coverage was often accused of editorialising, and critics on the left compared Roberto Civita to Rupert Murdoch. In 2012 the magazine's Brasília bureau chief was named in a federal police investigation into his contacts with the gambling boss Carlinhos Cachoeira, which the magazine's defenders described as an ordinary relationship between journalist and source. Civita consistently defended the magazine's independence. In a 2007 interview with the trade publication Jornalistas & Cia, he said:

With Roberto Civita's participation, Abril launched titles for particular markets such as Exame for business and Superinteressante for science and culture, and its portfolio grew to include Placar for football, the Brazilian edition of Playboy, Elle, and Nova, the Brazilian version of Cosmopolitan. When Advertising Age profiled him in 1995, it quoted a four-word motto.

In the 1990s Abril tried to turn itself from a magazine publisher into a multimedia group. On 20 October 1990 it launched MTV Brasil in partnership with Viacom, the owner of the MTV brand. It was the third MTV in the world and the first to broadcast on open, free-to-air television, on UHF channel 32 in São Paulo and, through an agreement with TV Corcovado, on channel 9 in Rio de Janeiro. It was also Brazil's first television network aimed specifically at young people. The Estadão newspaper reported that the investment in the channel was estimated at around US$20 million at the time.

The following year Abril launched TVA, one of the pioneers of pay television in Brazil. By 1999 TVA was considered one of the country's two leading cable operators, alongside Globocabo of Grupo Globo. During the decade Abril also partnered with international media companies on a range of pay-TV channels, including ESPN Brasil (50% with Disney), local versions of the Disney Channel, and joint ventures with Bravo and Country Music Television. It created the internet portal BOL, which was merged into UOL when Abril took a stake in that provider. It even launched a record label, Abril Music, which operated from 1998 to 2003, and ran a home video business, Abril Vídeo, from 1983 to 1999.

The expansion proved expensive. TVA had difficulties with its satellite television business, DirecTV, which caused losses, and Abril began selling its television assets one by one: its share of ESPN Brasil, then its other channels and its interest in DirecTV. It sold its stake in UOL to Grupo Folha in 2001 and closed Abril Vídeo. By the early 2000s, of the media empire built in the 1990s, only the publisher, TVA and MTV remained.

TVA was sold in stages. In October 2006, to raise cash to pay down debt, Abril agreed to sell Telefônica all of TVA's wireless cable operations in São Paulo, Rio de Janeiro, Curitiba and Porto Alegre, and all the preferred shares and part of the voting shares of its cable business, within the limits then imposed by Brazilian law on foreign ownership of cable operators. Reuters reported that TVA had about 320,000 subscribers and had lost R$150.3 million in 2005 on sales of R$288 million. The price was not disclosed; the trade publication Teletime estimated the valuation at about R$1 billion. In 2012 TVA was absorbed completely into Telefônica and renamed Vivo TV.

MTV Brasil lasted longer. Abril returned the MTV brand to Viacom at the end of September 2013 and, in December that year, sold its broadcast concession to Spring Comunicação, publisher of the Brazilian edition of Rolling Stone.

In May 2006 Abril took on its first major outside shareholder. The South African media group Naspers bought 30% of Abril S.A., the maximum then allowed for foreign ownership of Brazilian media companies, for US$422 million in cash. According to Folha de S.Paulo, US$150 million was a capital injection used to reduce Abril's debt, then estimated at about R$900 million, and the rest paid for shares held by the Civita family and for a 13.8% stake held by funds managed by Capital International. Abril had filed for a stock market listing and had to choose between raising capital on the stock exchange and finding a strategic partner in the media sector. It chose Naspers.

Roberto Civita explained the choice by saying he did not want to subject his long-term vision to the demands of quarterly results for public shareholders. Critics noted Naspers' historical ties to South Africa's apartheid regime. For Naspers, the deal fitted a strategy of investing in large emerging markets. In 2001 the same company had paid about US$32 million for 46.5% of the Chinese internet group Tencent, a stake that was later worth well over a hundred billion dollars.

Abril did not fare nearly as well. In June 2014, eight years after the purchase, Naspers wrote down its investment in Abril by 1.2 billion rand, about US$113.5 million. According to Exame, Naspers explained that Abril had had a bad year, with falling revenues and a delayed restructuring. The partner that had come in to fund expansion was, within a decade, recording losses on its stake.

While television failed, Abril built two other businesses that were meant to provide growth beyond magazines. From 2004 it invested heavily in education. Abril Educação, created in 2007 as a division of the group and separated from it through a corporate reorganisation in early 2010, brought together the textbook publishers Ática and Scipione, teaching systems such as Anglo and SER, preparatory courses and schools. In 2013 it bought the Wise Up language-school network for R$877 million.

Education became the most valuable thing the family owned. In 2014 and 2015 the Civita family holding company, Abrilpar, sold its entire stake in Abril Educação to funds managed by the investment firm Tarpon, in a deal that totalled about R$1.31 billion. The group said it would focus on media and distribution. Tarpon renamed the business Somos Educação, and in April 2018 sold control to the education group Kroton for about R$4.56 billion.

The second business was distribution and logistics. The subscription system and the newsstand network had given Abril an unmatched ability to deliver printed matter across Brazil. Its distribution companies included Dinap, which distributed publications to newsstands, and FC Comercial, and in 2007 it acquired Fernando Chinaglia, described as the largest distributor of publications in Latin America. In November 2011 it bought the express delivery company Total Express. By 2017, according to a case study by the Turnaround Management Association of Brazil, the logistics businesses Treelog (22%), Dinap (15%) and Tex Courier (15%) accounted for 52% of the group's revenue, compared with 46% for Abril Comunicações, the media business, although much of the logistics revenue came from services provided to Abril itself.

Abril also owned what was described as the largest printing plant in Latin America, producing hundreds of millions of copies a year for its own magazines and for other publishers.

The business that had made Abril powerful began to shrink in the 2010s. Advertising, the main source of revenue for magazines, was moving to the internet, and in particular, as the TMA Brasil case study put it, into the hands of the international giants of the digital world. Brazil also entered the worst recession in its modern history in 2015 and 2016.

Roberto Civita died in São Paulo on 26 May 2013, aged 76. At the time Veja had a circulation of 1.3 million copies a week, making it the second-largest news weekly in the world after its model, Time. The company he left behind was already in retreat. In 2013 Abril closed the magazines Gloss, Bravo!, Alfa and Lola and dismissed about 150 employees, saying the closed titles accounted for 2% of its advertising revenue. In 2014 it transferred ten titles, including Recreio and Manequim, to Editora Caras, keeping only subscription, distribution and printing services for them; it took them back in 2016. In 2015 it ended the Brazilian editions of Playboy, Men's Health and Women's Health, and moved Capricho online.

After Roberto's death, the banker Fábio Colletti Barbosa, from outside the family, became president of the group; by 2018 Roberto's son Giancarlo Civita was at its head. In 2016 the group relaunched itself under the slogan "welcome to the knowledge industry," presenting a portfolio of media, subscriptions, printing, logistics, licensing, the architecture show Casa Cor, branded content and data services.

None of this reversed the decline. According to its financial statements, reported by Poder360, Abril Comunicações had net revenue of R$977.7 million in 2017 and a consolidated loss of R$331.6 million, and ended the year with negative equity of R$715.9 million. Its auditors noted uncertainty about the company's ability to continue as a going concern. The restructuring firm Legasi had begun cutting costs in October 2017, when the group's debt was close to R$1.3 billion.

On 19 July 2018 the Civita family gave up management of the group, and Giancarlo Civita was replaced by Marcos Haaland, a partner of the restructuring consultancy Alvarez & Marsal. On 6 August the company announced that it would keep 15 titles, including Veja, Exame, Quatro Rodas, Claudia, Superinteressante and Capricho, and close the rest. Among the eleven titles and sites closed were Elle, Cosmopolitan, Casa Claudia, Boa Forma and Arquitetura & Construção. Estadão reported that about 800 people lost their jobs; the TMA Brasil case study put the total at about 900, a third of the workforce.

On 15 August 2018 Grupo Abril filed for judicial recovery, a court-supervised process broadly comparable to Chapter 11 in the United States, covering Abril Comunicações and its distribution and courier businesses. It declared debts of R$1.6 billion. In its statement, the company blamed the technological disruption affecting media businesses worldwide and the effects of Brazil's deepest economic crisis. Haaland described what had precipitated the filing in an interview with Exame.

The filing was particularly painful for the dismissed employees, whose severance payments were included in the debts under court protection. A committee of dismissed journalists complained that the company had paid none of them. The TMA Brasil case study notes that the labour liabilities, about R$94 million, were a particular concern for the company, because the creditors included journalists with direct access to the media, and that collective agreements were later reached with five unions to accelerate payment.

On 20 December 2018 the Civita family agreed to sell the group to Fábio Carvalho, a Rio de Janeiro businessman and partner in the retailers Leader and Casa & Video, who specialised in buying companies in financial difficulty. The price was a symbolic R$100,000. Carvalho, through his firm Cavalry Investimentos, took on the group's debts of about R$1.6 billion and committed to inject at least R$70 million. Brazil's competition authority, Cade, approved the deal without conditions on 8 January 2019, and the sale was completed on 17 April 2019, when Carvalho became chief executive.

The deal worked because the largest creditors changed. According to O Globo, Enforce, the credit-recovery business of the investment bank BTG Pactual, bought about R$1.1 billion of Abril's debt from the banks Bradesco, Santander and Itaú at a discount of more than 90%, becoming the main creditor. The TMA Brasil case study reports that the three banks had held more than 90% of the total liabilities and that press reports put the discount at 92%. With a friendly creditor holding most of the debt, a recovery plan could be agreed.

Creditors approved the plan in August 2019, and a court ratified it the following month. It provided for the sale of assets as separate business units and for payments to some creditors to be spread over many years. Labour creditors were to be paid in full up to R$250,000.

The asset sales followed. On 5 December 2019 BTG Pactual, the only bidder, bought Exame, the business magazine, together with its website and events business, for R$72.3 million at auction. The printing plant was sold in January 2021, and in May 2021 the Marginal Tietê headquarters, with 55,414 square metres of built area, was auctioned for R$118.8 million.

In February 2022 Judge Paulo Furtado de Oliveira Filho of São Paulo's Second Court of Bankruptcy and Judicial Recovery ended the judicial recovery. His ruling recorded that 99.4% of the credits in reais and all the credits in dollars and euros had been paid. The group said that the end of the process would help it plan for its growth.