On Monday, The Washington Post Co. announced that it will sell Newsweek to stereo equipment magnate Sidney Harman, the husband of Rep. Jane Harman (D-Calif.). The terms of the deal were not disclosed, the AP reported, although The New York Times has it that Harman, ninety-one, “would pay $1 in exchange for absorbing Newsweek’s considerable financial liabilities.”
On Tuesday, The Daily Beast had the scoop on Newsweek’s finances, however. Having obtained a copy of the sixty-six-page sales memorandum that the Post Co. (which put the property up for sale in May) gave to prospective buyers, the site reported that the publication was even worse off than many thought:
Revenue dropped 38 percent between 2007 and 2009, to $165 million. Newsweek’s negligible operating loss (not including certain pension and early retirement changes) of $3 million in 2007 turned into a bloodbath: the business lost $32 million in 2008 and $39.5 million in 2009. Even after reducing headcount by 33 percent and slashing the number of issues printed and distributed to readers each week from 2.6 million to 1.5 million, the 2010 operating loss is still forecast at $20 million.
The Daily Beast surmised that the sales memo “paints the picture of a media property given to someone unequipped to fundamentally change its current trajectory.” Which raises the question: What is the value of a newsweekly in the current round-the-clock media environment? And what, if anything, can Harman do to make Newsweek the force that it once was?