The future looks gloomy for one of America's most iconic magazines.
Today, the Washington Post Co. announced it's selling Newsweek after
losing tens of millions of dollars on it over the last two years. "Our
aim will be--if we can do it--a rapid sale to a qualified buyer," said
Donald Graham, the Washington Post Co. chairman. The move casts a dark
shadow over the 77-year-old institution's future. Will it survive?
It Doesn't Look Good, observes Peter Kafka at All Things Digital:
"In corporatespeak, this is equivalent to hastily scrawling out a 'Going
Out of Business-Name Your Price' sign and plastering it on the front
window. Anyone want to make a bid? Newsweek saw revenue decline 29
percent last year and ended up losing $29.3 million on sales of $184
It's Not That Bad, insists Colby Hall at Mediaite: "The bottom
line is that Newsweek is seeing ad revenues return to pre-recession
levels, and combined with a rather dramatic reduction in losses, the
weekly news title is moving very close to hitting their break even
target for 2011. One would have to think that selling Newsweek
when it is growing and in a stronger media market is preferable to
selling it in a down market like last year, which is probably why the
decision was made now."
They Tried to Mimic the Economist--It Didn't Work, writes Jon Friedman at MarketWatch:
"Newsweek's answer has been predictable: Follow the leader. In this
case, The Economist, though hardly the biggest magazine in circulation,
has been anointed as the industry pacesetter for style, attitude and
ideas. Newsweek has tried hard lately to present its impression of The
Economist by disdaining news events for interpretation and analysis.
It's commendable -- but ill-fated. We already have The Economist, we
don't need a knockoff."
Why Would Anyone Want to Buy It? wonders Michael Roston at True/Slant:
"When you think about it, Newsweek doesn't really have any other assets
to sell, does it? Much has been made recently about the whiplash faced
by staffers as they keep being forced to move offices repeatedly. So the sale of
Newsweek will really just be to whomever wants to control the name, the
URL, and the archives - not to some private equity firm that wants to
make a mint by flipping their expensive headquarters."
Even Worse: Newsweek Owes a Debt to Its Subscribers, notes
Patrick Gavin at Politico: "One
other thing to consider: Newsweek may find itself in a situation where
its liabilities outweigh its assets. It's important to remember that a
magazine subscription is a contract so Newsweek has many obligations
they would need to fulfill to current subscribers. This could easily
number in the tens of millions of dollars."