The Players: Katie Benner, writer for Fortune magazine; Steve Forbes, editor-in-chief of Forbes magazine

The Opening Serve: "The Forbes family has poked itself in the eye with its 'capitalist tool,'" reads the lede in Katie Benner's article in Fortune. The article, which appears in the August 15 issue of the magazine, went online this morning and spells out the financial trouble that Forbes, both the magazine and the family, face. Benner first points to a loan, which allowed the Forbes family to cash out around $100 million, due next July. She then connects that to the Forbes fire sale that's been happening over the past few years. "The island in the Fiji archipelago ... A grand ranch in Colorado ... A sultan-worthy palace in Tangier, a custom Boeing 727, helicopters, the world's largest private collection of Fabergé eggs, and stacks of Victorian ... the publishing company's Fifth Avenue headquarters," she explains, have all either been sold or auctioned off. But the family still holds onto Forbes Media, which produces Forbes magazine. "Holding on to that asset, however, has proved to be a gargantuan headache," Benner writes. "The company went into technical default on some $90 million worth of revolving credit."

She also documents what's happened in the last two years, cost-cutting having been crucial to Forbes staying above water. As for the company's future, Benner writes: "what should not be forgotten is that the deal with Elevation that set this chain of events in motion has been a failure ... It burdened Forbes Media with debt that it ultimately struggled to pay, so much so that the company had to be gutted ... The Forbes family was able to take a lot of money off the table. That's timely because it is running out of trophies to sell."

Assessing the damage done by the article, Peter Kafka of AllThingsD wrote today that "Fortune does a good job of showing just how precarious life has been at Forbes for the past couple years--as it has been at every business magazine (just ask Portfolio and BusinessWeek) and the publisher’s uncertain future."  He adds, "Elevation and Forbes have interlocking put and call options that kick in next month, and it will be interesting to see how long Elevation remains a minority owner."

The Return Volley: The article caught the eye of Steve Forbes, who sent a memo to staff at 9:43 this morning. AllthingsD acquired and published said memo. "Today Fortune magazine published a story on Forbes with the clear intention of disrupting the business of its most formidable competitor," he writes. "Fortune was aware that this was highly confidential, private information and of no value to release to the public. Though the intention is to harm our business, it will not adversely impact Forbes." He pointed out that the problems are in the past--and that the past two years have been dodgy for all media entities, not just Forbes. After assuring all on the memo that he has "the finest team in the media world today," Forbes addressed the company's alleged financial problems. "Forbes is profitable and is successfully navigating these extraordinarily turbulent seas. The company continues to grow and thrive with powerful new strategies and talent."

Forbes also put in a media release with a swipe at Fortune embedded in it.  "The last decade has seen unprecedented upheaval across the media industry," the press release states. "Within that decade Forbes magazine, uniquely among its largest competitors, Fortune and Business Week, grew its total readership to record levels – 5.4 million in 2010 – and grew its share of advertising from 33% to 40%. The company also launched 16 local language editions, giving it the largest worldwide brand footprint among business publishers."

What They're Fighting About: If the media company's deals will come back to haunt the magazine. Benner thinks that the deals the Forbes Media and the family made will prove disastrous--as evidenced by the last two tumultuous years. She predicts the tenuous relationship forged by Elevation and Forbes may ultimately spell the magazine's demise.  Forbes argues that the problems that the company faced were endemic to all media companies in the last few years, and that Forbes's accomplishments have eclipsed its competitors, even Fortune, even in spite of the magazine's financial troubles.

What They're Really Fighting About: The competition between Forbes and Fortune.  Both Benner and Forbes acknowledge each other as competition. Benner's piece is an analysis of the deals and tribulations of a family that produces what she calls "a fierce competitor." But, Forbes sees something more there--"the clear intention of disrupting the business of its most formidable competitor." He argues that there wasn't any public interest in the documents that Fortune obtained, and Fortune published the article with the intent to harm.

Who's Winning Now: Benner and Fortune. Regardless of the intention of the article, Benner has cast uncertainty on Forbes Media, and she didn't pull any punches. The damage is done, and now Forbes appears to be scrambling to alleviate fears from within his company. Forbes now faces the readers, advertisers, and investors who have read the piece in addition to dealing with the financial problems we know now about--all thanks to Brenner.