Congratulations to Washington Post Co. (WPO). It got what it wanted: Someone else to take the blame for killing Newsweek.
According to multiplereports, the Post Co. has reached a deal to sell the magazine to Sidney Harman, a 91-year-old mogul who made his fortune selling audio equipment. When the obituaries for Newsweek are printed, they'll likely say it was Harman (or his heirs) who made the painful, difficult decision to euthanize an iconic brand.
That's not fair, because it was the Post Co. that sealed Newsweek's doom by systematically disqualifying potential buyers who might have had some hope of securing its long-term future. Hedge fund Avenue Capital proposed to trim Newsweek's budget by farming out business-side operations to American Media, an arrangement that Playboy has used with some success. Post Co. Chairman Donald Graham nixed that on the grounds that American Media publishes the National Enquirer. Healso ruled out selling to Newsmax Media, which could have paired Newsweek with its profitable monthly current-events title, because of Newsmax's conservative editorial bent.
What Will Harmon's Successors Do?
And so the Post Co. settled on Harman, who, as a proprietor, leaves much to be desired. For one thing, he's not without political baggage of his own: His wife, Jane Harman, is a Democratic member of the U.S. House of Representatives. (A challenger for Harman's seat is already using the connection to try to discredit the magazine.) Harmon doesn't have any experience in publishing. And there's the question of his age: Though Harman is by all accounts healthy and vigorous, basic biology suggests he won't be so for much longer. It's unreasonable to think Harman's successors will share his quixotic interest in saving a property that screams 20th-century relic.
The one thing Harman has going for him is he's willing to ensure that Newsweek's death is a gradual one. He has reportedly promised to retain 250 of the magazine's 325 employees, fewer than former U.S. News & World Report executive Fred Drasner, another rejected suitor, was willing to support. According to The New York Times, "Mr. Graham, who is said to be concerned not only with the magazine's legacy but the legacy of his family's stewardship of the magazine, wanted the sale to cause as few disruptions as possible."
A thought: When you're losing $70 million a year, isn't a disruption exactly what you need?