Ailing Newsweek up for sale
By Andrew Vanacore |
May 7, 2010, Friday
|
Print Edition
Print Edition
AT a time when people don't want to wait a minute for information, let alone seven days, do news weeklies have a future? If Newsweek does, it won't be with its current owner.
The 77-year-old magazine, hobbled by sagging ad revenue and circulation, is being put up for sale by The Washington Post Co, which is bowing out of the struggle to keep the genre relevant.
Magazines and newspapers in general have been struggling to hang on to advertising revenue and circulation, but weeklies such as Newsweek, Time and US News & World Report have a particular challenge finding a niche. Once useful digests of the week's events, weeklies now have to compete for attention with up-to-the-second online news and commentary from all quarters.
"It's very difficult to sustain a newsweekly when you have instantaneous news," said Roland DeSilva of DeSilva and Phillips, an investment bank focused on the media industry. He said Newsweek's redesign last year "was doomed to fail simply because there's no need - there's no reader need."
Newsweek has been piling up losses for the past two years. It cut costs through voluntary buyouts that have reduced its staff by about a quarter. It ended 2009 with 427 employees. And it tried to better compete with more upscale magazines such as The Economist and The New Yorker with a complete redesign of its print and online editions last year.
Neither step has done enough. The Post Co said on Wednesday it had retained the investment bank Allen & Co to help find a buyer for the magazine.
"Newsweek's staff has been remarkable in cutting expenses and putting out a great magazine," Post Co Chairman Donald Graham said. "But we did not see a path to sustained profitability within the company."
Jon Meacham, the magazine's editor, said he is exploring every option for keeping Newsweek afloat, even the possibility of forming a group of backers to take it over.
While the Post Co says it has no deadline for a sale, the company would not comment on what would happen if no buyer steps up.
The Graham family, which has controlled the Post since Katharine Graham's father bought the newspaper in 1933, acquired Newsweek in 1961 with the idea of raising its stature to the level of its more august and wealthy competitor, Time.
In the years since, Newsweek has won a dozen National Magazine Awards, the industry's top honor.
But it also gained less flattering attention in recent years. It was forced to apologize for errors in a 2005 story alleging that interrogators at Guantanamo Bay desecrated the Quran.
And an issue that featured Sarah Palin in a skimpy jogging outfit struck some as sexist.
The 77-year-old magazine, hobbled by sagging ad revenue and circulation, is being put up for sale by The Washington Post Co, which is bowing out of the struggle to keep the genre relevant.
Magazines and newspapers in general have been struggling to hang on to advertising revenue and circulation, but weeklies such as Newsweek, Time and US News & World Report have a particular challenge finding a niche. Once useful digests of the week's events, weeklies now have to compete for attention with up-to-the-second online news and commentary from all quarters.
"It's very difficult to sustain a newsweekly when you have instantaneous news," said Roland DeSilva of DeSilva and Phillips, an investment bank focused on the media industry. He said Newsweek's redesign last year "was doomed to fail simply because there's no need - there's no reader need."
Newsweek has been piling up losses for the past two years. It cut costs through voluntary buyouts that have reduced its staff by about a quarter. It ended 2009 with 427 employees. And it tried to better compete with more upscale magazines such as The Economist and The New Yorker with a complete redesign of its print and online editions last year.
Neither step has done enough. The Post Co said on Wednesday it had retained the investment bank Allen & Co to help find a buyer for the magazine.
"Newsweek's staff has been remarkable in cutting expenses and putting out a great magazine," Post Co Chairman Donald Graham said. "But we did not see a path to sustained profitability within the company."
Jon Meacham, the magazine's editor, said he is exploring every option for keeping Newsweek afloat, even the possibility of forming a group of backers to take it over.
While the Post Co says it has no deadline for a sale, the company would not comment on what would happen if no buyer steps up.
The Graham family, which has controlled the Post since Katharine Graham's father bought the newspaper in 1933, acquired Newsweek in 1961 with the idea of raising its stature to the level of its more august and wealthy competitor, Time.
In the years since, Newsweek has won a dozen National Magazine Awards, the industry's top honor.
But it also gained less flattering attention in recent years. It was forced to apologize for errors in a 2005 story alleging that interrogators at Guantanamo Bay desecrated the Quran.
And an issue that featured Sarah Palin in a skimpy jogging outfit struck some as sexist.
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