Company says Sidney Harman's family is “solidly” committed to magazine and Daily Beast, and will appoint new board director in the wake of his death
Sidney Harman “saved” Newsweek. Now what?
With Harman’s death on Tuesday at the age of 92, what becomes of his interests in Newsweek and the Daily Beast, where he was the part owner and chairman?
Officially, nothing. At least that’s what executives at the merged Newsweek Daily Beast are saying.
“Dr. Harman's ownership stake in the Newsweek Daily Beast Company remains owned by his estate,” Andrew Kirk, the company’s spokesman, wrote in an email to TheWrap. “His estate will have the ability to appoint a replacement director to the board of the venture to represent its interests.”
But the question remains: Will Harman’s family continue his financial commitment to Newsweek, whose $47 million in debt Harman assumed when he bought the magazine from the Washington Post Co. last year? And if not, will his partner, IAC chairman Barry Diller?
According to an insider with knowledge of the deal, the Washington Post Co. required Harman to commit to a funding plan in the case of his own demise before agreeing to sell him the magazine.
And Harman, who made his fortune in the audio equipment business, told people privately that his financial commitment to turning Newsweek around would be three years, according to the New York Times.
While there is no guarantee that Harman’s heirs — his wife, Jane Harman, or their two children — will continue to pour in the millions currently necessary to keep Newsweek afloat, Harman told both Barry Diller and Tina Brown that they would.
Brown, who Harman installed as editor of Newsweek and the Daily Beast, said “the family's commitment to the magazine he loved so much is solidly continuing, in partnership with Barry Diller and IAC."
“Three weeks ago, when he told me of his illness, he said he and his family wanted to continue as partners in Newsweek/Beast in all events,” Diller said in a Harman memoriam post on the Daily Beast. “We will carry on, though we will greatly miss his passionate enthusiasm and belief in the venture.”
Jonathan Alter, who recently left Newsweek, said Harman “told me just last week that the magazine was on track to break even.”
Given how many employees have left Newsweek or have been laid off since Harman took control, slashing headcount costs, that may be true.
Through March, however, the magazine has seen its ad pages plummet more than 30 percent compared to the first quarter of 2010 — or a quarterly loss of roughly $10 million in advertising revenue, according to the Publishers Information Bureau.
If Newsweek is on track to break even, it would be a great final act for an entrepreneur that had a few of them.