Newsweek, The Daily Beast to announce Merger on Friday

NY Daily News

Tina Brown to have editorial control

 

Tina Brown

 

 

Will they call it NewsBeast? Or Tinaweek?

Newsweek and The Daily Beast will announce their much-speculated merger on Friday morning, according to a report by former Newsweek senior reporter-turned-New York Observer media reporter Nick Summers.

The new publication will be a 50-50 merger and the editorial staffs will combine, Summers reported late Thursday on the Observer’s website.

Daily Beast Editor and former New Yorker magazine honcho Tina Brown will be in charge of editorial content for the new venture. Brown confirmed the report on Thursday night.

"The union of The Daily Beast and Newsweek magazine finally took place with a coffee-mug toast between all parties Tuesday evening," Brown wrote on her website on Thursday night. "The final details were only hammered out last night."

The publications were in talks to merge last month after Sidney Harman bought the flailing magazine for $1, but fell apart when the two parties couldn't agree on management structure.

"Why in the world would I invest, engage in something like this, and be hands-off?" Harman told New York Magazine shortly after the deal had reportedly fallen through.

That issue became clear to Brown, who didn't seem to like Harman having control over the magazine's content if she was Editor.

"Sidney clearly enjoys coming up with cover ideas and story ideas," Brown told New York.

On October 18, when reports emerged that the talks had fallen apart, Brown addressed the issue in a memo to her staff.

"There's a report on the [Wall Street Journal] now saying we have decided not to go forward in any more conversations with Newsweek," she wrote in an email. "The engagement was fun but the pre-nup got too complex. We wish Newsweek all the best. The Daily Beast is on a tear and any partnership we think about has to build on that incredible growth. Onward and upwards!"

But according to the Observer, the talks never really stopped.

Harman will also have a role in the new project, according to the report, but Brown is slated to have complete editorial independence.

Since Harman bought Newsweek, it has struggled to find an editor as a large portion of its staff fled.

Before talking to Brown in October, Newsweek Editor Jon Meacham resigned.

Harman's first choice, star reporter Fareed Zakaria, fled to Time Magazine.

And when it appeared he couldn't get Brown, rumors flew that Harman had also tried to snag Terry McDonell, Editor of the Sports Illustrated Group. The duo were spotted having lunch last month.

Newsweek’s Zakaria Defects to Rival Time

Folio Mag

Newsweek International editor and CNN host Fareed Zakaria is leaving the magazine to join rival Time as editor-at-large starting October 1. Zakaria will have a regular column and will contribute cover stories and features in the print magazine and on Time.com.

Zakaria [pictured] also has renewed his association with CNN and will continue to produce his weekly show, “Fareed Zakaria GPS,” as well as several other special reports annually, sister company Time Inc. announced Wednesday. In addition, Zakaria will serve as a consultant for HBO’s documentary unit.

Time Inc., CNN and HBO are all owned by parent company Time Warner.

Responsible for overseeing the Newsweek’s editions abroad, Zakaria has been the editor of Newsweek International since October 2000 and has contributed a regular column to the U.S. edition. Prior to joining Newsweek, Zakaria served as managing editor of Foreign Affairs for eight years.

Earlier this month, the Washington Post Co. sold Newsweek to audio magnate Sidney Harman, who apparently intends to keep a majority of Newsweek’s staff. Zakaria’s departure eliminates him as a possible candidate to replace managing editor Jon Meacham, who has said he is leaving the magazine once the sale process is complete.

Newsweek Sale a Head-Scratcher

LA Times

 

Sidney Harman, the stereo industry magnate who announced Monday that he was buying Newsweek magazine, has made a lot of money in his life.

Harman, who turns 92 this week, told the staff at the ailing newsweekly that he was not all that interested in making more, at least from his new acquisition.

"I'm not here to make money," he told them, according to a Newsweek published account. "I'm here to make joy."

They could use some.

Newsweek, which has about 325 employees, hasn't made a profit since 2007 and lost about $30 million last year. The magazine was put up for sale by Washington Post Co. in May.

Harman made his money in high-fidelity audio equipment built by the San Fernando Valley company he co-founded in 1953, Harman Kardon Inc., and sold under brands including Harman Kardon and JBL. He probably didn't spend much on Newsweek. Terms of the deal were not disclosed, but Newsweek reported that Harman "has agreed to pay a small amount in cash and to assume tens of millions of dollars in financial obligations."

At least he can't be labeled as old guard in publishing.

"He has no track record to go on for the media industry," said Steve Cohn, editor of Media Industry Newsletter. "Until last week, I'd never heard of him."

Harman did not respond to requests for an interview about his plans for Newsweek.

News magazines played a vital role in informing the public before the arrival of the Internet, said James McQuivey, a media analyst at Forrester Research.

"Newspapers were historically too close to the news to step back and do analysis. Monthlies missed key events in a rapid-paced world," he said. "Newsweeklies filled the gap between them."

With analysis now being provided by a multitude of websites and blogs targeting a wide range of political viewpoints, newsweeklies have struggled to reposition themselves away from the general interest niche, McQuivey said.

"In the end, it's unclear why so many newsweeklies are necessary," he said. "The Internet will sweep most of them away in due time."

Allen Weiner, a Gartner analyst, said the move by Harman has many in the industry perplexed.

"There is nothing in his background that seems to suggest that he has some magical answer to this, or knows of some business model that nobody else knows of," Weiner said. "I guess for the moment that he's willing to take on a lot of debt, which he most certainly will do. But while we all know he's wealthy, we don't really even have an idea of how deep his pockets are."

Harman Kardon was sold to Beatrice Foods in 1976 when Harman was named U.S. Deputy Secretary of Commerce under President Carter. Leaving government in 1980, he bought the company back and named it Harman International Industries Inc., serving as its chief executive until 2007. He's currently chairman emeritus of the publicly traded company, which recorded about $3 billion in sales last year.

But his personal fortune has taken hits in recent years. Although he has not had to disclose his finances, his wife — U.S. Rep. Jane Harman (D-Venice) — has, at least to some extent.

According to the Roll Call newspaper that covers Capital Hill, two accounts listed in Sidney Harman's name valued at $50 million each in a 2007 disclosure statement by the congresswoman had dropped by a combined $70 million in her report for 2008.

But there was plenty left over. Last year, Roll Call named Jane Harman the third-wealthiest member of Congress, with a net worth of at least $112 million.

Jane Harman said her career had nothing to do with her husband's acquisition of Newsweek.

"Sidney was quoted recently as saying: 'I don't tell Jane how to vote and she doesn't tell me how to run my business,' " she said in a statement. "That's our rule and we stick to it."

The sale is expected to be completed by the end of September. At that point, current editor Jon Meacham will leave. Meacham is the author of the 2008 book "American Lion: A Biography of President Andrew Jackson" and several other highly regarded biographies.

He said in an e-mail to his staff when the sale was announced, "I wish Mr. Harman and his team all the success in the world."

Trent Gegax, who worked for Newsweek as a reporter and editor from 1994 to 2006, believes the magazine will need an abundance of it. Newsweek, he said, always considered itself a scrappy, lively underdog. Harman could be embracing the magazine in that tradition.

"We always kind of thought of ourselves as the Viet Cong versus the U.S. military when I was there; we were always shorthanded economically," said Gegax, who now runs an investment firm in New York. "It's an interesting play and he's trying to do a great thing. Maybe he's a romantic and thinks he can save Newsweek.

"And maybe he can, but you've got to doubt it. I doubt it."

Newsweek Editor Jon Meacham to Exit After Sale

The Wall Street Journal

Newsweek editor Jon Meacham is planning to announce Monday that he will resign from the magazine after its expected sale to audio equipment magnate Sidney Harman, according to a person familiar with the matter.

Mr. Meacham took over as editor of Washington Post Co.-owned publication in October 2006.

His resignation ends a 15-year career at Newsweek that began in 1995 when he joined Newsweek as a writer. He became national affairs editor soon after that and was named managing editor in November of 1998.

Mr. Harman's bid was attractive to Post Co. because it assured a higher degree of continuity than the other bidders were willing to offer, according to people familiar with the situation. However, the departure of Mr. Meacham, 41 years old, is bound to fundamentally transform the magazine.

His influence has been more pronounced in the last year as Newsweek shifted away from newsgathering to more opinion and analysis. Many of the cover stories, which he regularly writes, reflect his interest in politics and religion.

Newsweek Finds Self on the Auction Block in Twilight of a Fading Era

NY Times

 

For generations, Time and Newsweek fought to define the national news agenda every Monday on the newsstand. Before the Internet, before cable news, before People magazine, what the newsweeklies put on their covers mattered.

As the American conversation has become harder to sum up in a single cover, that era seems to be ending. The Washington Post Company announced Wednesday that it would sell Newsweek, raising questions about the future of the newsweekly, first published 77 years ago.

Donald E. Graham, chairman and chief executive of the Washington Post Company, said in an interview that the decision was purely economic.

“I did not want to do this, but it is a business,” he said. The magazine would lose money in 2010, he said, and “we don’t see a sustained path to profitability for Newsweek.”

The move comes as companies have been sloughing off and revamping other mass magazines. TV Guide was sold for $1 to a private equity firm; Businessweek was sold for $5 million in cash to Bloomberg L.P.; and Reader’s Digest was given an editorial overhaul as it slashed circulation.

The circulations of Time and Newsweek now stand about where they were in 1966, according to the Audit Bureau of Circulations.

“Those magazines had much more stature in those days,” said Edward Kosner, who began at Newsweek in 1963 and was its editor in the late 1970s. “It was really important what was on the cover of Newsweek and what was on the cover of Time because it was what passed for the national press. They helped set the agenda; they helped make reputations.”

“The era of mass is over, in some respect,” said Charles Whitaker, research chairman in magazine journalism at the Northwestern University school of journalism. “The newsweeklies, for so long, have tried to be all things to all people, and that’s just not going to cut it in this highly niche, politically polarized, media-stratified environment that we live in today.”

Jon Meacham, Newsweek’s editor since 2006, said the announcement was not a surprise. “In the sense that we are all in an existential crisis, it is not what I would call a stunning decision,” he said in an interview. “You would have to have been hopelessly Pollyanna-ish not to have suspected that there were fundamental shifts ahead.”

But, he said, “I decline to accept that Newsweek in some form does not have a role to play going forward.”

Potential bidders were unclear. Bloomberg L.P., which just bought Businessweek, was not exploring a purchase, said a spokeswoman, Judith Czelusniak. Mr. Meacham said that he was considering putting together investors to buy the magazine, and that he had received voicemail messages from two billionaires after the sale was announced.

Newsweek had operating losses of $28.1 million in 2009, 82.5 percent higher than the previous year’s loss of $15.4 million. Its revenue declined 27.2 percent, to $165.5 million in 2009, from $227.4 million in 2008, hurt by diminished advertising and subscription revenue.

Started in 1933, Newsweek was acquired by The Washington Post in 1961 after Benjamin C. Bradlee, then a Newsweek editor and later executive editor of The Post, pitched the Post president Philip L. Graham on it.

Newsweek under The Post became a political counterweight to the Republicanism of Time under Henry Luce. While Time took a conservative stance on the Vietnam War and American culture, Newsweek ran more youth oriented covers on the war, civil rights and pop culture stars like the Beatles (though “musically they are a near disaster,” the magazine said).

Mr. Kosner, the former editor, recalled weekly bouts of “controlled anxiety” over what Time would put on its cover.

“On Monday mornings, on the advertising page of The Times, Time and Newsweek took out sort of quarter-page ads that showed the cover and everyone turned to that page on Monday mornings to see what each of them had done,” Mr. Kosner said.

Slowly, though, cable news programs grew in number and popularity, and the instant news of the Internet rendered weekly summaries stale almost by definition. And the notion of a cultural common ground that Americans could all share was changing.

Newsweek’s circulation was 3.14 million in the first half of 2000. By the second half of 2009, that dropped to 1.97 million. Time’s circulation declined from 4.07 million to 3.33 million in the same period. U.S. News & World Report, the also-ran newsweekly, abandoned its weekly publication schedule in 2008 to become monthly.

Meanwhile, The Economist, which offered British-accented reports on business and economic news, and The Week, an unabashedly middle-brow summary of the weekly news that began publishing in the United States in 2001, were on the rise.

Both Time and Newsweek were aggressively redesigned. Time, in 2007, changed its publication date from Monday to Friday and added more analysis. Newsweek, in 2009, more or less ceased original reporting about the week’s events, and instead ran essays from columnists like Fareed Zakaria and opinionated analyses.

Mr. Whitaker of Northwestern said that editorially, the magazines’ reinventions had not worked well. “I don’t think Time and Newsweek, in this transformation, had enough of a distinct voice to capture the fancy of anyone in this incredibly polarized political environment,” he said.

Richard Stengel, the managing editor of Time, took issue with Mr. Whitaker’s characterization.

“Our audience is bigger than the cable audiences,” he said. “What we have embraced is point-of-view journalism.”

Mr. Stengel said that Time was “very profitable last year, and we will be even more profitable this year.”

Both magazines increased their prices: Newsweek now sells for $5.95 on the newsstand, and Time for $4.95. However, subscribers pay only about 50 cents a copy for either magazine.

Both also lowered the circulation guaranteed to advertisers: Time guarantees a 3.25 million circulation, and Newsweek just 1.5 million.

In 2009, as the advertising slump hit magazines, Newsweek’s ad pages fell 25.9 percent, about average for the industry, while Time’s fared better, dropping 17.4 percent.

“The big factor is just the eroding advertising base — the loss of automotive, financial, technology advertising,” said George Janson, managing partner for the media-buying unit GroupM Print. “It’s not going to go back to where it was anytime soon.” And, he said, many advertisers prefer to run ads in niche publications, not broad ones.

“There are increasing challenges to being a single magazine company, particularly one that is targeted toward a general-interest area,” said Jonathan A. Knee, who oversaw the sale of Businessweek as senior managing director at Evercore Partners.

But Mr. Meacham said that national coherence was still a worthwhile goal.

“I would argue the fragmentation in media makes a place like Newsweek even more important,” Mr. Meacham said. “There are not that many common denominators left.”