We've Got Hollywood Covered

The Problem With BusinessWeek

McGraw-Hill, the 121-year-old publisher of BusinessWeek, held its second quarter earnings call this morning in New York. It drew more attention more than usual: Two weeks ago, following several press reports, the company issued a two-line press release announcing that it has begun exploring strategic options (read: sale) for BusinessWeek.

Several suitors have reportedly emerged, including OpenGate Capital, which bought TV Guide last year for the jaw-dropping price of $1.00 (plus the assumption of its heavy debts), and Bruce Wasserstein, who has stake in Penton Media, owns The Deal and bought New York magazine in 2003.

As for today’s raw numbers, here’s a quick summary:


For McGraw-Hill’s business-to-business group, the one that includes BusinessWeek, revenue in the second quarter decreased by 10.2 percent to $215.8 million. Overall, the company’s net income slid 22.7 percent (to $164.1 million) during the quarter – and roughly the same (22.4 percent) during the first half. The figures included the $24.3 million restructuring charge incurred by the company a workforce reduction that resulted in approximately 550 layoffs.


Advertising pages in BusinessWeek declined by 36.8 percent during the first half, according to the Publishers Information Bureau. They fell 34.3 percent during the second quarter.


“A few years ago, BusinessWeek was worth a billion dollars,” Reed Phillips, partner at media banking firm DeSilva + Phillips, told me last week. “Today, it has no value. That kind of rapid decline in value is giving buyers of media businesses a real scare.”

So scary, McGraw-Hill could be looking to unload more than just BusinessWeek.

During the call, CEO Harold McGraw was asked if the company would consider selling off assets in its information and media division beyond its business magazine.

Everything in the portfolio, he said, “will be scrutinized.”