Jenny McKay, in "The Magazines Handbook" (2000), writes about the
masthead: "Morrish says this can also be called a ?flannel panel'
although my random queries about this have yielded no one who knew the
term." She goes on to say that the lack of corroboration simply
illustrates that the usage of the term is not universal in the
publishing world (page 139; quotation courtesy of Google Book search).
"Morrish" is John Morrish, whose book "Magazine Editing" (1996)
includes the term in its glossary (information thanks to Amazon
full-text book search). Neither offers an origin of the term.
According to the Oxford English Dictionary, one definition of
"flannel" is: "Nonsense, ?hot air?; flattery, unnecessary
ostentation." The first instance of this meaning cited in the OED is
from 1927. That suggests the term originated sometime after that date,
although if the term was not common currency in the industry in 2000,
the origin is probably much more recent.
A cynical definition of "flannel panel," in reference to Amiga Power,
a short-lived UK computing magazine (1991-96; see Wikipedia): "It's
always good to know who's responsible for something, which is where
the flannel panel comes in. It is, of course, merely the list of
credits at the beginning of a magazine, but, like all jargon, given a
stupid elevating name so people who work in a particular industry can
feel superior to people who don't." (The URL below is from Google's
cache; the page is not currently online.)