Will Lazard's Bruce Wasserstein buy BusinessWeek?
BusinessWeek reports that potential bidders have emerged for BusinessWeek. And who are the clever folks considering a bid for this money-losing property? There appear to be two interested parties. One is OpenGate Capital, a Los Angeles private equity firm that in October 2008 purchased TV Guide magazine (without its Web operations) for $1 plus the assumption of substantial liabilities. The other? Bruce Wasserstein, who owns The Deal and New York Magazine, and also serves as Lazard Ltd. (LAZ) CEO.
BusinessWeek is a big money loser. It lost $20 million on revenues of $147 million in 2008, and slightly smaller losses are projected in 2009 on revenue of around $135 million. But when you include rent and certain infrastructure-related costs, the total loss figure doubles. I don't know how you make a return by buying a shrinking business that loses $40 million a year.
So BusinessWeek can be considered an ego purchase. And Wasserstein, who has quite a substantial ego, has enjoyed considerable stroking of that ego by BusinessWeek. He got this pleasant Q&A in November 2001, this wonderful article in September 2004, this cover story in November 2006; and more cover story love in September 2007. Clearly Wasserstein doesn't need to own BusinessWeek to get good publicity from it.
But now that he's having a child with his fourth wife, the younger sister of former Labor Secretary Elaine Chao, after "spinning off" his third wife last year, why not add another notch to his belt by buying BusinessWeek?
Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College. His eighth book is You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing. He has no financial interest in the securities mentioned.