• by Erik Sass , August 2, 2010

The Washington Post Co. has sold Newsweek to Sidney Harman, a 91-year-old multimillionaire who made his fortune selling stereo equipment. The deal ends a three-month-long auction process that saw multiple bidders turned away by current owner WaPo as unsatisfactory for various reasons. The New York Times and Ad Age reported the news Monday.

Terms of the deal were not currently available, although the NYT reported a rumored sale price as low as $1, in which case, Harman would basically get the magazine for free in return for assuming any debt and considerable pension obligations. If true, this deal resembles Macrovision's sale of TV Guide to OpenGate Capital for $1 in October 2008, as part of the same basic financial strategy.

Harman won the magazine, in part by promising to retain 250 of its current 380 full-time employees and respect its editorial independence and integrity.

Previously, WaPo had turned away a bid from Chris Ruddy, the publisher of conservative newsweekly Newsmax, concerned that he might interfere with Newsweek's left-leaning editorial stance, although Ruddy denied the charge.

WaPo also shooed away bids from companies and individuals including OpenGate and hedge fund manager Thane Ritchie, founder of Ritchie Capital Management, who some feared would wield a cost-cutting axe with excessive zeal.

WaPo bought Newsweek in 1961, and published the newsweekly through its golden age in the 1970s-1990s, when it rivaled Time in reach and influence. However in recent years, Newsweek fell on hard times, along with the rest of the magazine industry. Total ad pages declined precipitously from 1,991 in 2006 -- to just 1,117 in 2009, according to the Publishers Information Bureau, a 44% drop in just three years.

In short, the magazine needs a sympathetic owner with deep pockets, and it has found this in the Harman, who built his fortune over half a century at the helm of a stereo equipment empire, with a break in 1977-1978 to serve as Deputy Secretary of Commerce. Although estimates of his fortune vary, Harman's wife -- California Rep. Jane Harman -- was said to be worth over $400 million in 2006.

Harman was last in the news in September 2007 when Goldman Sachs and Kohlberg Kravis Roberts canceled a planned $8 billion buyout of Harman International Industries in a high-profile reversal, which foreshadowed the coming credit crunch.

In 2008, he resigned his day-to-day management responsibilities at Harman, which manufactures JBL and Infinity, but remains active in a variety of nonprofit causes.