Newsweek sells for $1
But make no mistake, Harman's pocket change purchase of Newsweek -- he paid $1, plus the assumption of liabilities for the magazine -- has to be a passion play, because it certainly isn't a financial one. The Daily Beast has obtained a copy of the 66-page sales memorandum that the Newsweek seller, the Washington Post Co., gave to prospective buyers, and it paints the picture of a media property given to someone unequipped to fundamentally change its current trajectory.
Much will depend on finding a near-genius editor and an inspired publisher and on their freedom and shared approach, as well as on their bankroll. As with many weeklies, Newsweek's financial freefall is jarring. Revenue dropped 38 percent between 2007 and 2009, to $165 million. Newsweek's negligible operating loss (not including certain pension and early retirement changes) of $3 million in 2007 turned into a bloodbath: the business lost $32 million in 2008 and $39.5 million in 2009. Even after reducing headcount by 33 percent and slashing the number of issues printed and distributed to readers each week from 2.6 million to 1.5 million, the 2010 operating loss is still forecast at $20 million.
You'd think Evan Smith might be on Harman's short list for Newsweek, wouldn't you?
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