When Donald Graham, chairman and CEO of The Washington Post Company, announced Monday that ownership of Newsweek would go to Sidney Harman, the nearly 92-year-old former stereo equipment mogul and husband of Southern California Democratic congresswoman Jane Harman, he cited Harman’s intentions to “keep a majority of Newsweek’s very talented staff” as one of the key factors behind the decision to sell him the cash-strapped magazine for a reported $1.
But even if a “majority” of Newsweek’s staffers do get to stay on board, dozens stand to be let go. The New York Times’ Jeremy Peters hears that Harman plans to keep 250 of the magazine’s roughly 325 employees, and that doesn’t include editor in chief Jon Meacham, who resigned yesterday.
In a company-wide meeting late Monday afternoon, Newsweek executives Tom Ascheim and Ann McDaniel informed staffers that they would be given more details about the fate of their jobs and the future of the magazine in three to six weeks (roughly the same time period for when the deal with Harman is expected to be finalised), according to multiple sources who were present.
Also at the 30-minute meeting, which took place on the 10th floor of the building where Newsweek rents its soon to be vacated Tribeca headquarters, Harman addressed his new employees for the first time, cracking jokes about his height and age and reiterating his commitment to the magazine and its current staff. One staffer described him as “charming and complimentary.”
Meacham, who initially had tried to round up his own group of financiers to purchase Newsweek, did not speak at the meeting, but he told The Upshot’s Michael Calderone that he plans to “stay for a bit to ensure a smooth transition.” Estimates of 30-60 days have been floated, a person familiar with the situation told us.
A Newsweek spokesperson did not immediately return an email seeking comment.
The tone inside the newsroom, meanwhile, is a mix of relief and anxiety. Harman is seen as a more suitable owner than other finalists, like the hedge fund Avenue Capital, which was knocked out of the running because of its stake in National Enquirer publisher American Media Inc. (AMI), and Fred Drasner, who was reportedly uninterested in “maintaining a huge editorial infrastructure.”
But the uncertainty lingers.
“There’s a little bit of a sense of relief, but now people have to wait another three to six weeks to know if they’ll be offered a job with the new employer, and even longer to find out who the new editor will be,” one insider said.
“The notion that lots of people are going to stay is a bit misleading,” said another. “More people who currently work at Newsweek will have jobs in this scenario than in the AMI scenario, but I don’t think there’s a huge collective sigh of relief.”
At the same time, vacant positions — of which there are currently quite a few — remain unfilled, and we hear Newsweek has hired a handful of temp editors to help pick up the slack.
“It’s worked pretty well,” our source said.
The sale to Harman ends The Washington Post Co.’s 50-year stewardship of Newsweek, as well as three months of speculation about who would want to buy a magazine that lost $28 million in 2009 alone, and which has faced nasty criticism over a redesign last year that failed to achieve the Economist-like stature it promised.
Despite the $1 sales tag, Harman is “absorbing an operation with total expenses expected to be about $180 million this year,” according to The Wall Street Journal, and he has “agreed to assume more than $50 million in liabilities,” according to The Times.
Several suitors whose bids were unsuccessful have weighed in on the sale.
Andrew Nikou, CEO of OpenGate Capital, which bought TV Guide for $1 in 2008, issued the following statement:
“We regret that we won’t have the opportunity to take this iconic brand into the future. OpenGate has had great success with the TV Guide Magazine brand and many other properties, and we had great confidence that we would have had similar success and many achievements with Newsweek.”
Reached via email, Newsmax CEO Chris Ruddy, who had told us he would make Newsweek profitable in 18 months before his bid was rejected in early July, said: “Newsweek is a great brand and can continue to have life in print and online. I am glad that Mr. Harman saw that value.”
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