It's official: Sidney Harman, the businessman who made his fortune selling stereo equipment, has secured a deal to buy Newsweek from the Washington Post Co. and will announce the deal later Monday afternoon.The New York Times and others have previously reported that Mr. Harman was the front-runner to come away with the news weekly, but have cautioned that no deal was certain. Politico's Playbook email newsletter said this morning that a deal with Mr. Harman was imminent, but also cautioned that "no deal like this is done until it's done."
"It ain't over 'til it's over, y'know?"
The deal is now done, according to people familiar with the process.
"Hokay. It's over."
Mr. Harman and the Washington Post Co. declined to comment.
"We can say no more!"
The Times quoted one person briefed on Mr. Harman's bid saying his plan would retain 250 of Newsweek's employees. Newsweek counted 379 full time staffers at the end of March, according to the sale book posted by PaidContent, but a significant number have left in the time since. Losses at the magazine could approach $70 million this year, this person told the Times. Mr. Harman reportedly bid $1 for the magazine but agreed to assume the magazine's liabilities; those details could not be confirmed on Monday.
That's why I didn't get it. I bid $20 but wouldn't assume the debt. I've got enough of my own.
Post Co. chairman Donald Graham put the long-running and iconic newsweekly on the block in May, saying it would lose money again this year and "might be a better fit elsewhere."
... like maybe the trashcan...
The Post Co. sold its other magazine, Arthur Frommer's Budget Travel, last December. Despite the legacy of the flagship Washington Post newspaper, The Post Co. now finds the majority of its Kaplan business in the educational test-prep services, prompting Mr. Graham to reposition it as an "education and media company" in 2007. The Washington Post Co. decided to sell Newsweek one year after the title introduced a major redesign to its print edition's look, editorial mission and business model.
Perhaps publishing's most spectacular crash and burn ever...
Newsweek has been cutting spending, but revenue has been falling as well.
That's because nobody reads it...
Newsweek's ad pages fell 9.6% in the first half, compared with a narrow 0.4% gain at Time, according to the Publishers Information Bureau.
They don't read it because it stinks, which doesn't mean it smells funny...
Other once-mighty magazines have sold for astonishingly low prices, such as the $1 deal for TV Guide, but those prices don't look quite so minimal once you factor in the losses and liabilities -- such as the obligation to keep serving millions of subscriptions that may or may not be profitable -- attached to such acquisitions.
The TV Guide crash came when cable replaced broadcast teevee. The Newsweak crash came when Howard Fineman and Eleanor Clift replaced news.
Bidders that were rejected or dropped out include Fred Drasner, Avenue Capital, OpenGate Capital, Newsmax and the hedge fund manager Thane Ritchie.
