Insider: Newsweek Sale Nears Amid Staff Exodus

Insider: Newsweek Sale Nears Amid Staff Exodus

Barry Diller, eager to sell the struggling brand, may soon get his way as Newsweek's editors and writers jump ship

While the revolving door continues to turn at NewsBeast, an insider with knowledge of the situation tells TheWrap that the "News" half of the name will likely soon be sold off to one of the several parties currently "very interested" in the Newsweek brand.

Several prominent members of NewsBeast's editorial staff have left the company recently. CEO Baba Shetty stepped down in June after less than nine months in the position, Newsweek's top editor Tunku Varadarajan left just three months into its all-digital revamp, and Varadarajan's replacement, Justine Rosenthal, is now leaving the company, according to a Wednesday staff memo from NewsBeast editor-in-chief Tina Brown obtained by TheWrap.

Also read: Barry Diller Regrets Newsweek Buy, Has Low Expectations for NewsBeast

"This week's issue will mark Justine Rosenthal's last with us," Brown wrote, going on to praise Rosenthal's work on "some of Newsweek's most resonant pieces from such bylines as Dan Klaidman, Chris Dickey, Andrew Romano, Tony Dokoupil and Megan McArdle."

Rosenthal's successor, Richard Just, won't get the chance to edit Dokoupil or McArdle — they left NewsBeast last month. Dokoupil is now a senior writer at NBC News, while McArdle is a columnist for Bloomberg View. Several other high profile writers and editors have gone as well – Andrew Sullivan (January), Howard Kurtz (May), David Frum (June) and most recently, Jace Lacob (July), for instance.

Also read: Barry Diller on Newsweek's Future: 'We Have No Stars in Our Eyes'

Baba ShettyAn insider with knowledge of the situation said morale is understandably low on the Newsweek side of the company, with nearly everyone there either trying to leave NewsBeast entirely or find a spot at the Daily Beast. The insider praised Shetty's work on the digital-only Newsweek as "brilliant" and "full of potential," but said it was all in vain now that Barry Diller, whose IAC owns the majority of NewsBeast, was determined to run the Newsweek brand into the ground before selling it off.

Though Diller called his purchase of Newsweek a "mistake" in April and confirmed plans to sell the brand off in May in order to focus on the DailyBeast, another insider close to the situation said that "several people are very interested" in purchasing the beleaguered 80-year-old brand right now, and that IAC is just as interested in selling it to them.

Also read: Newsweek Ends Print Edition After 80 Years

The future looks brighter for Daily Beast. It has lost some talent, but the insider pointed out that most were shed in efforts to scale the publication down to its leaner pre-Newsweek merger roots. IAC has a "very strong commitment to the Daily Beast," the insider said. Over the past year, ad revenue has jumped 30 percent, the insider said. And Brown touted a traffic gain nearly as strong — 28 percent — in her memo to the staff.

Megan McArdleDuring the first quarter, however, parent company IAC's loss widened in its media division to $8.8 million from a $6.7 million loss during the same period a year ago, and the company attributed the deepening loss to the inclusion of NewsBeast.

Also read: D11 Dispatch: Barry Diller Says Aereo Plans To Create Content, Seeks Newsweek Sale

Daily Beast will continue with two new faces at the top: Deidre Depke and John Avlon have been promoted to Managing Director and Executive Editor, respectively, a separate staff memo announced on Wednesday. Depke will start her newly-created position at "the end of the summer," while Avlon begins in Sept when he returns from paternity leave.