As Bids Arrive, Options for Newsweek Look Grim
Three parties have confirmed that they submitted preliminary bids by Wednesday's deadline: OpenGate Capital, a private equity firm; Thane Ritchie, founder of a money-management company; and Newsmax Media, publisher of the eponymous conservative current-events magazine.
Each of the three poses its own risks to Newsweek's brand. OpenGate, which last year bought TV Guide from Macrovision for the nominal price of $1, is a self-described opportunistic buyer that would be looking to turn a profit on Newsweek, likely by further slashing its already dramatically reduced budget. Moreover, it wouldn't provide a long-term home: Like most private-equity players, OpenGate would be looking to unload the magazine in five to seven years.
Mixing Politics and Publishing?
But at least it would be unlikely to inject any politics into Newsweek's editorial content. The same can probably not be said of the other two bidders. For Newsmax, the appeal of buying Newsweek is the instant legitimacy it would confer. Despite a sizable readership and reported annual revenues of $35 million, Newsmax is still seen as a fringe brand, not a mainstream one. Its owners say they would respect Newsweek's mission to "objectively report the news and provide analysis from a wide spectrum of perspectives," but anyone who has followed Rupert Murdoch's remaking of The Wall Street Journal knows just how much such promises from rich owners with agendas are worth.
Ritchie is even more of a wild card. He is curious about both publishing (he expressed interest in buying the Chicago Sun-Times last year) and politics (earlier this year he announced plans to explore establishing a third political party in Illinois). It's not clear how serious he is about either, but it is clear Ritchie is litigious, given to public feuding and not especially deferential toward traditional journalistic mores. He's currently locked in a spat with the Minneapolis Star-Tribune, which declined to publish in its entirety a series of attack ads Ritchie submitted that were arguably meant to be mistaken for investigative newspaper articles.
Those grim options don't quite represent the full extent of Newsweek's alternatives, but pretty close. Sidney Harman, a 91-year-old stereo equipment mogul, has also made inquiries, and Newsweek editor Jon Meacham is still hoping to line up backers for his own bid. But Meacham's chances of being his own rescuer have surely suffered from the string of articles accusing him of steering Newsweek into the ditch in the first place, or at least of failing to steer away from it.
Newsweek may survive the sale process in name, but, one way or another, it's unlikely to come out of this completely intact.