Good news: Newsweek sold — for a dollar
posted at 5:47 pm on August 2, 2010 by Allahpundit
Technically it’s a dollar plus an agreement to assume their huge financial liabilities, but if you throw me an opportunity for a headline that sweet, I’m going to take it every time.
Hopefully, in a few years and with a few trillion more tacked onto the national debt, the U.S. can get a deal like this from China.
According to several people who have been briefed on the process, Mr. Harman’s bid appealed to Mr. Graham and the Post Company because Mr. Harman has said he would retain a significant number of the magazine’s 325 employees. The financial details of the sale were not known, though one person with knowledge of Mr. Harman’s bid said last week that he would pay $1 in exchange for absorbing Newsweek’s considerable financial liabilities.
Newsweek has struggled through the recession more than most weekly news magazines, losing nearly $30 million last year alone. It was earning that much a year as recently as 2007.
And the longer it remained on the market, the less tenable its financial situation became. It has been an expensive product for the Post Company to produce, with its various international editions and separate back-office positions that were specific to the magazine. Instead of sharing a general counsel and accounting staff with the Post Company, for example, Newsweek has its own employees in those positions.
Business types will, I hope, correct me in the comments, but the fact that the Post is willing to give the mag away in exchange for wiping its hands of the debt means they’re not real optimistic about Newsweek turning a profit in the future, yes? Meanwhile, another intriguing wrinkle: Jon Meacham, the magazine’s editor and a guy known for praising it in odd, quasi-lyrical terms, will not be among those staying on.
Jon Meacham will announce his departure as editor of Newsweek magazine Monday, at the same time that The Washington Post Co. declares Dr. Sidney Harman, husband of Rep. Jane Harman (D-Calif.), winner of a bidding war for the 77-year-old newsweekly, according to sources inside the company.
Meacham, 41, had been planning to leave no matter who bought the magazine, the sources said…
Harman, 91, a wealthy industrialist-turned-philanthropist, is interested in enhancing his legacy by buying a symbol of Washington and global influence, the sources said. In Washington, he was the benefactor of the Shakespeare Theatre Company’s Harman Center for the Arts.
So unless I’m missing something, what happened here is that Harman wanted a trophy to attest to his own Beltway influence, and since he’s already in the habit of charity, he realized he could buy one on the cheap and keep a few hundred people employed in a tough economy. No wonder, then, according to Politico, that he plans to keep the “serious-minded, essentially New-Democratic tone Meacham set for the magazine.” If he’s not interested in the actual content of the magazine or even turning a profit, why would he change things? As for Meacham’s departure, I’ll give you three theories. One: As noted at the link above, he’s super busy at the moment writing two presidential biographies and really was planning to leave. Two: He wanted to continue with the magazine — that much seems clear to me per the aforementioned lyricism — but was miffed when he couldn’t put together a winning purchase bid like he had hoped to do. Three: Whoever will now be running the magazine for Harman (he’s 91) actually does want to change Newsweek’s editorial direction and figured that having Meacham there would simply be an obstacle to that. I hope theory three’s the correct one, as it would open the door to my fondest wish for the magazine: A tabloid reboot.
All goofs aside, they do still churn out stuff occasionally that I find interesting, particularly on foreign-policy subjects where their leftish tilt isn’t quite as acute. This piece over the weekend interviewing Taliban commanders about who really runs the Afghan insurgency — hint: the initials are I-S-I — is useful information, and has enough sexy details (some Taliban think Mullah Omar might be in Pakistani custody, a rumor we’ve heard before) to keep things moving. More of this and less of Fareed Zakaria writing love letters to higher taxes and they’ll be back on track.
Update: “A national treasure”?
“NEWSWEEK is a national treasure,” Harman said in the news release. “I am enormously pleased to be succeeding The Washington Post Company and the Graham family and look forward to this great journalistic, business, and technological challenge.”
Harman also said, “I’ll consider it a victory when it breaks even.” Onward to victory!