Bids for Newsweek were due the beginning of July, but as August begins there’s still been no sale announcement. It appears the Washington Post Company is as concerned about the pedigree and intentions of the buyer as about the financial terms.
First off, the bid from Newsmax Media was apparently brushed aside, with the WaPoCo folks wanting nothing to do with the conservative news outlet. Now the Wall Street Journal reports that the management of WaPoCo is concerned about the plans by Avenue Capital Group to partner with American Media Inc. (AMI), the publisher of the National Enquirer, to have AMI handle advertising and backroom functions for Newsweek. That may eliminate the hedge fund from the list of bidders still in the running.
So who does that leave? The New York Times and the WSJ list Fred Drasher, former co-publisher of the New York Daily News and former part-owner of the Washington Redskins NFL team, and Sidney Harman, who became a billionaire making audio equipment. His wife, by the way, is US Representative Jane Harman (D-CA).
The NY Times indicates that Harman may have the edge, since his deal would retain 250 employees and cause the least disruption to Newsweek’s editorial output.
The price? Harman would reportedly pay one dollar, but would have to assume huge liabilities along with the money-losing magazine. Some outside analysts had questioned how anyone could justify taking on the pension liabilities that WaPoCo wants to pass on with Newsweek.