Stereo tycoon buys struggling magazine from the Washington Post Company
UPDATE: It's now official.
EARLIER: The sale of Newsweek appears to be finally over.
Sidney Harman, a 91-year-old audio equipment magnate, has won a bid to buy the magazine from the Washington Post Company, according to a person with knowledge of the sale.
A representative for Newsweek did not immediately return TheWrap's request for comment.
According to the person who spoke with TheWrap, the sides have agreed in principle and are working on a final agreement. An announcement is expected this afternoon.
Harman will likely pay little or nothing for ownership of the magazine, assuming its debt and circulation costs. (The arrangement is said to be similar to when TV Guide was sold in 2008 to OpenGate Capital for $1 — less than the cover price of a single issue — plus the assumption of its heavy debt.)
And Newsweek has debt. The magazine lost more than $41 million since 2007, including $28.1 million last year and $2.3 million during the first quarter of 2010. According to Advertising Age, Newsweek's losses this year could approach $70 million.
The Post solicited a handful of bids for Newsweek but ultimately went with Harman, the husband of Rep. Jane Harman (D-Calif.), in part because he has said his plan is to “keep Newsweek as a traditional newsmagazine.” Also a factor: Harman reportedly intends to keep as many of Newsweek's 300-plus staffers employed as he can. (But according to the New York Post, editor Jon Meacham — who toyed with the idea of buying Newsweek himself — is expected to leave the magazine.)
Harman outlasted several rounds and rival bidders, including Avenue Capital, OpenGate Capital, Newsmax, Fred Drasner and Thane Ritchie.
In May, the Washington Post Company said it was exploring a sale of Newsweek — a public admission that broad efforts to turn weekly news magazine around had failed.
“The losses at Newsweek in 2007-2009 are a matter of record," WaPo Co. CEO Don Graham said at the time. "Despite heroic efforts on the part of Newsweek’s management and staff, we expect it to still lose money in 2010. We are exploring all options to fix that problem. Newsweek is a lively, important magazine and website, and in the current climate, it might be a better fit elsewhere.”
Ad pages for Newsweek fell about 10 percent during the first half of 2010, according to the Publishers Information Bureau, while estimated advertising revenue plummeted more than 30 percent through June. At rival Time, ad pages were up less than one percent during the same period.
Harman is founder and chairman of Harman International Industries, and is "widely known for [initiating] quality of working life programs." He served as the U.S. Deputy Secretary of Commerce from 1977 to 1978 and is on the board of The Aspen Institute.
He is the author of two books: "Starting With The People" and "Mind Your Own Business: A Maverick's Guide to Business, Leadership and Life."