'Newsweek' Is For Sale - Again
Three times may or may not be a charm for Newsweek, which could change hands again for the third time in as many years, according to an internal memo to Newsweek staff from CEO Baba Shetty and editor-in-chief Tina Brown, announcing that the company is up for sale.
The news of the planned sale comes not long after Newsweek’s
current owner, IAC chairman Barry Diller, admitted that buying the company was a “mistake.”
Shetty and Brown wrote that after the sale, Newsweek will again operate as an independent brand, separate from The Daily Beast Web site founded by Brown with backing from Diller in 2008. They explained the decision as a move to refocus their efforts on The Daily Beast, while noting that Newsweek is on course to break even by the fourth quarter of this year, following stringent cost-cutting measures.
The memo also emphasized that a Newsweek sale is conditional. “We will only do this sale if it reflects the value we’ve created. If not, we'll continue to operate it as now.”
Newsweek has already traded hands several times in the past few years. The Washington Post Co. sold Newsweek to Sidney Harman, a stereo magnate, for a negligible sum along with the assumption of financial liabilities to the tune of $47 million in August 2010.
In November 2010, Harman entered into a joint venture with The Daily Beast Web site
backed by Diller’s IAC, forming The Newsweek Daily Beast Co. Harman passed away in April 2011; in July 2012, his family announced that they would cease investing in the joint venture, shifting
the financial burden squarely to IAC and effectively giving up control of the company.
In October 2012, The Newsweek Daily Beast Co. announced that Newsweek’s print edition would cease publication by the end of the year, as the brand reinvented itself as a digital-only operation. As expected. the closing of the print edition was followed by extensive layoffs in December of last year, as Shetty and Brown sought to reduce costs and put the company on a firm financial footing.
In April of this year, Diller hinted another sale might be afoot when he told Bloomberg TV: “I wish I hadn't bought Newsweek, it was a mistake.”