The legendary Newsweek was sold. It was announced late last week that Newsweek had been sold to a little known media company called the International Business Times (IBT). The site, according to Quantcast, has 7 million visitors domestically and 13 million worldwide. The buyers have said that the acquisition of Newsweek was largely for the purposes of adding a name brand publication to IBT’s portfolio of media holdings.
The duo behind IBT, Johnathan Davis and Etienne Uzac, have not disclosed the specifics of the sale and will not comment on how much they paid for Newsweek. They only hint that they likely got a good price, noting that their company took no outside funding to make the deal happen.
Three years ago, electronics magnate, Sidney Harman, the founder of the Harman Kardon, thought he was getting the a good deal too when he bought Newsweek for $1 from The Washington Post Co. The amount was largely a demonstration of good faith on the part of Harman, who assumed more than $40 million in liabilities when he made the purchase. In the years leading up to Kardan’s acquisition, the magazine, owned by The Washington Post Company, faced slumping ad sales and declining circulation. To gain better footing, it had gone through several iterations of focus and the editorial style of the magazine kept changing, and it was unable to regain traction.
The magazine had been flopping on deck, gasping for breath for some time. Instead of clubbing it to death, one may suggest putting it out of its misery, Kardan was able to convince IAC chairman Barry Diller and Tina Brown, editor at The Daily Beast to merge The Daily Beast with Newsweek.
According to the New York Times, on November 12, 2010, Tina Brown gathered up the staff to announce the merger:
“Ms. Brown, according to staff members who were present, spoke excitedly about the potential synergies for advertisers across platforms and promised to produce a new form of magazine journalism, where digital would drive print instead of the other way around.”
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In an age of digitally led media and declining print sales, it was a bold idea to be sure. One that in retrospect was misguided, especially at a time when The Daily Beast had reportedly been on track to become profitable within 18 months.
Peter Boyer, a writer who went to the New Yorker just after the merger told the New York Times about Newsweek, “It was a dead, beached whale. There was no life in the creature.”
Kardan died six months after news of the merger was made public. One year later, in a move to minimize losses, the relatives controlling his estate announced they would be capping their investment, leaving IAC and Barry Diller as the controlling owners of the magazine.
At the center of the criticism for the failure of what followed is The Daily Beast editor, Tina Brown. Brown’s storied career includes time working at Vogue and The New Yorker. At both publications, she increased readership and was responsible for finding and fostering new editorial talent. However, she was unable to make significant enough improvements at Newsweek to turn the media outlet around, and in October 2012 the announcement was made that Newsweek would abandon print altogether, only existing in digital format online. Several employees, speaking to The New York Times seem to characterize her management style as fiery and erratic, but effective.
During the two-and-a-half-year failed media experiment, Gawker and other New York media outlets published articles decrying waste and extravagant spending by editors in the face of ongoing layoffs with titles such as: The Most Bloated Magazine of The Most Bloated Era: Farewell To Newsweek, The Hagfish Strikes Again and Newsweek Sucks.
In late May of this year, Newsweek staff were informed via email that a sale of the now online magazine was being considered in an effort to better focus on The Daily Beast, noting that Newsweek, according to the CEO, was on track to break even in Q4 of 2013.
Newsweek finally found a buyer in IBT.
By its own hand, The Daily Beast gently characterized the tenure of Newsweek under the auspices of Tina Brown, IAC and Barry Diller thusly, “Three years later, Newsweek is a much different publication—and business. In January, the domestic and global print issues were combined into a single digital product, produced by a small staff to high editorial standards and an increased social media presence.”
Critics have been less kind.
Joel Mazmanian is a DC-area correspondent for The Blot.