Do Not Buy Newsweek
Newsweek is for sale. Again! And what great timing: the CEO promises that Newsweek "will break-even in Q4 of this year." What reason could you possibly find not to buy?
To review briefly, Newsweek is a weekly news magazine. The weekly news magazine category, as a business, is dead. It has been dead since the internet matured as a constant news source, many years ago. Somehow, everyone forgot to tell this to Sidney Harman, the incredibly wealthy and incredibly old stereo mogul who bought Newsweek in 2010, and promptly died a year later. What was he thinking?
“What I wanted to know was whether there was a shot at this thing breaking even,” Mr. Harman said, reflecting on his thoughts after he bought the magazine. “But I’m looking at this thing and saying to myself: ‘Son of a gun. I think we got a business here.’ My expectation is it will surely break even.”
And why would he think that? Perhaps because in 2010, Newsweek's then-CEO said "We expect to have significantly smaller losses in 2010 than in 2009 and we still expect to be back to break-even in 2011."
Sidney Harman did not live to see Newsweek break even. Although he did go to his grave expecting it to happen—upon Harman's death, Jonathan Alter wrote that he "saved Newsweek, hired Tina Brown as editor and told me just last week that the magazine was on track to break even."
Of course, putting Tina Brown in charge of anything, much less a dying newsweekly, is a terrible way to try to break even. Newsweek added Barry Diller as a financial backer and merged with The Daily Beast, which makes zero logical sense if you give it a moment's thought. (Nevertheless, Sidney Harman reckoned "with the efficiency gains of combining the two operations, he expected to break even 'relatively soon.'" I wonder why none of those smart journalists who depended on Harman for a paycheck ever bothered to tell him that newsweeklies were dead?) Layoffs ensued, staff and readers left the magazine, Tina Brown turned it into a sensationalist laughingstock, as is her wont, and its print edition finally folded last year.
Now Newsweek is basically a shitty e-newsletter for a small and shrinking group of elderly readers. It has millions of dollars in liabilities, a decimated staff, a diminished legacy thanks to years of Tina Brown's wanton trolling, and no real prospect for turnaround. Now Brown herself is ready to wash her hands of it completely. Even Barry Diller admitted that it was a mistake to ever get involved with the magazine in the first place. You would have to be a stone cold god damn moron and pure grade-A sucker to come within ten miles of Newsweek with your checkbook open. Sad, but there you have it.
We expect it to break even soon.
[Image by Jim Cooke]