Newsweek, a well-known publication of The Washington Post Co., has been put up for sale. The magazine has not been returning profit during the recent several years, and its owners expect more losses this year. As a result, Donald Graham, the WashPo chairman, decided that it would be better to sell the magazine to someone else.
"Despite heroic efforts on the part of Newsweek's management and staff, we expect it to still lose money in 2010. We are exploring all options to fix that problem. Newsweek is a lively, important magazine and website, and in the current climate, it might be a better fit elsewhere," he said in a statement.
Periodical printed publications do not experience their best times nowadays. Many of them lost their advertisers as a result of the crisis. In addition, analytical publications, such as Newsweek, lose competition to online resources. People do not want to pay for information because they can have it for free on the Internet.
The number of advertisement pages in Newsweek suffered a reduction of 26% in 2009. The losses of the magazine increased last year to $29 million against $16 million in 2008. As a result, many people working at the magazine were fired.
It may seem strange that such large world-known publications refuse from their projects. It brings up the idea that The Washington Post was simply fed up with Newsweek, which became a burden for it. The WashPost receives nearly 60% of its profit from Kaplan, the company that prepares students for standard tests. The profits that it gets from newspapers, magazines and even online media are not that significant.
Who will buy the magazine? Will it eventually belong to a Russian oligarch?
Russian billionaire Alexander Lebedev, who already owns London’s The Evening Standard, acquired The Independent and Independent on Sunday. He paid a symbolic price of one pound sterling for them.
Like Newsweek, the former owner of the two newspapers, Ireland’s Independent News & Media (INM), suffered the losses of 28 million pounds ($42 million) in 2009 because of the drop of the advertising market during the crisis and decided to hand over its publications to someone else. According to the agreement, the INM will pay Lebedev’s Independent Print Limited the sum of 9.25 million pounds to pay the newspapers’ debts.
It is not ruled out that Newsweek will have the same future. An oligarch will obviously have funds to pay its debt, not to mention the fact that it would be very prestigious for a wealthy individual to run a respectable publication.
Newsweek is a global brand, an icon, a dream, a part of the spirit of American journalism outside America. Most likely, it is not going to be a big problem to sell the magazine. The owners of Time may show their interest in their competitor too. Such an acquisition would put an end to bitter competition for good.