Bloomberg LP has purchased the 80-year-old BusinessWeek from McGraw-Hill Cos. The acquisition includes the print magazine and the BusinessWeek.com Web site.
Terms were not disclosed, but sources say Bloomberg's cash offer is in the $2 million to $5 million range, according to BusinessWeek, and that the financial giant will assume liabilities, including potential severance payments. The severance agreements are particularly important, as rumors circulate that Bloomberg will make significant staff cuts to restore profitability.
The deal is scheduled to close Dec. 1.
From one perspective, the magazine is a desirable media property, especially for Bloomberg -- giving the financial and business information company access to a large audience of business professionals who may not currently be subscribers to its data terminals. In essence, it provides a promotional platform for terminal subscriptions.
The buy fits with a larger strategy to increase exposure of Bloomberg content through more consumer-oriented publications, including a joint newswire and content-sharing arrangement with The Washington Post.
McGraw-Hill said in a separate statement Tuesday that the sale will allow it to focus on building its other brands, including Platts and J.D. Power and Associates.
Norman Pearlstine, Bloomberg's chief content officer, will be chairman of BusinessWeek. He stated that both organizations have complementary resources that could create a new model for the magazine.
"We're buying BusinessWeek to build it," company president Daniel Doctoroff said in a Bloomberg interview. "Our intention is to take a venerable brand and turn it into the best global business newsweekly."
McGraw-Hill told prospective buyers that BusinessWeek is on course to take in a total $135 million in revenues in 2009 -- down from about $236 million in 2008, according to figures from the Publishers Information Bureau. Through September, BusinessWeek's ad pages fell 34.7%, compared to the first nine months of 2008 -- to 860, per PIB.
According to its Web site, BusinessWeek has more than 4.7 million readers weekly in 140 countries.