Newsweek Shows Beggars Can Be Choosers

The Washington Post Co. (WPO) probably isn't going to get much more than a token $1 when it sells Newsweek. But it's being awfully choosy about where that dollar comes from.

The publisher has been disqualifying potential Newsweek suitors left and right, in some cases over not much more than their unsavory associations. A bid from Avenue Capital Partners has reportedly fallen into disfavor because the hedge fund is a part owner of American Media, publisher of the National Enquirer, and would use that company to handle Newsweek's business-side functions. Earlier the Post. Co. walked away from Newsmax Media and hedge fund manager Thane Ritchie, neither of whom was judged to be a "suitable steward." Newsmax publishes an eponymous conservative magazine, while Ritchie is a libertarian who has dabbled in third-party politics.

That leaves a handful of possible buyers, among whom Sidney Harman, a 91-year-old stereo equipment mogul, is now said to be the frontrunner. Harman's pitch appeals to the Post Co. in part because he proposes to maintain 250 of Newsweek's current 325 staffers, more than the other buyers would retain. But it's not as though Harman comes without political baggage of his own: His wife, Jane Harman, is a Democratic congresswoman from California. (Avenue Capital owner Marc Lasry, whose bid has not yet been ruled out, is also a heavy donor to Democrats.)

There's still the possibility of a dark-horse candidate swooping in at the last moment, as happened in 2004 when Bruce Wasserstein bought New York magazine out from under the nose of Mort Zuckerman and others. A Newsweek insider says the rumor on the staff is there are two interested parties still circling that have yet to be named.