Posted by Dale Buss on August 3, 2010 01:40 PM
Hearts are aglow in official Washington, D.C., today because the monied industrialist husband of a congresswoman has rescued one of the iconic brands of the mainstream media: Newsweek magazine.
Many employees of the former owner, the Washington Post Co., will get to keep their jobs – “most” of the current 300, promises Sidney Harman, the magazine’s new owner. He’s also the spouse of Democratic Congresswoman Jane Harman and the highly successful, entrepreneurial founder and owner of Harman International, which makes top-flight audio equipment.
One of the retained won’t be Jon Meacham, Newsweek’s editor, whose rocky tenure has included some frankly schizophrenic approaches to editorial content (ostensibly to compete with the more openly partisan blogosphere), a redesign, and some controversy around their Sarah Palin cover shot.
So while Meacham gets off the hook now, what’s so great for everyone else about Newsweek surviving, even for $1 out of Harman’s pocket? Well, Harman calls the magazine a national treasure, so he gets to keep it alive. The question gone begging is this: Is there a plan to leverage whatever this brand has left in assets into a business plan that works in the print-scanty present?
One discouraging answer is that Harman is 91 years old, so this may not prove to be a long-term solution to the weekly’s troubles. Kick the can of worms down the road, anyone?
For now, Harman’s dollar also buys him millions of dollars in liabilities that the Post wasn’t going to assume. According to the Daily Beast web site:
Revenue dropped 38 percent between 2007 and 2009, to $165 million. Newsweek's negligible operating loss (not including certain pension and early retirement changes) of $3 million in 2007 turned into a bloodbath: the business lost $32 million in 2008 and $39.5 million in 2009. Even after reducing headcount by 33 percent, and slashing the number of issues printed and distributed to readers each week, from 2.6 million to 1.5 million, the 2010 operating loss is still forecast at $20 million.
So, welcome to the magazine publishing business, Mr. Harman! And good luck.