Wasserstein's death leaves New York magazine in limbo

Bruce Wasserstein, who died Wednesday at 61, will be remembered by many in the media world less for his dealmaking prowess than for turning New York magazine from a predictable, shallow city magazine into the most consistently clever and ingeniously packaged publication of the last few years. But with the financier's death, New York's status is in question, and speculation has already begun that Wasserstein's family, which owns the magazine through a trust, will try to sell it.

The last time New York was for sale, there was no shortage of bidders -- even though the title was losing a reported $2 million a year. With his $55 million offer, Wasserstein snatched it out from under the nose of Mort Zuckerman, who led a coaltion that included Harvey Weinstein, Nelson Peltz, and Donny Deutsch.
Whether there would be as much interest in an auction now is debatable. Zuckerman is still in the market for media properties that would confer on him the prestige he once derived from owning The Atlantic Monthly, which he sold in 1999, and U.S. News & World Report, now primarily a web publication. He participated in the recent bidding for BusinessWeek but dropped out before the final round.

But BusinessWeek was more or less a fire sale -- McGraw-Hill reportedly handed it over to Bloomberg LP for less than $5 million in cash, plus the assumption of subscription and severance liabilities. Even though New York is still said to be losing money, the Wasserstein family wouldn't be willing to part with it for less than $75 million, predicts media investment banker Reed Philips of DeSilva & Philips. That's based on the purchase price plus the considerable investments Wasserstein has made since then, upgrading the website and acquiring Menupages.com.

And Zuckerman is more strapped for cash than usual at the moment. He just invested $200 million in purchasing new color presses for the New York Daily News, and his charitable trust lost $30 million in the Bernie Madoff swindle. For Zuckerman to buy New York would probably require him to sell the Daily News to Rupert Murdoch, something he says he's not going to do.

A likelier scenario is that New York will remain in the family for the time being. As the New York Observer notes, two of Wasserstein's seven children have journalism experience -- one son, Ben, is a former editor at New York. Bruce Wasserstein was praised for being a relatively hands-off owner; there's no reason his kids shouldn't continue the tradition, at least for a while.
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