What do you get a 91-year-old billionaire who has everything but youth? How about a faded news organ to amplify his voice?
The nonagenarian is Sidney Harman, founder of Harman International and its stable of high-end audio brands. The periodical is Newsweek, owned for half a century by The Washington Post, which is increasingly positioning itself as an education company through its Kaplan division. [See http://yhoo.it/harmannewsweek]
What Harman is buying for a reported $1 is a media property that has posted an operating loss of more than $41 million in the last two years and must continue printing at a loss for a while if only because of the $40 million in subscription money it’s taken against the delivery of future magazine issues.
Reporting- and editing-intensive news weeklies are also expensive to produce, carrying expectations of instant analysis that more thoughtful monthlies don’t have to meet. Having “week” in your name probably doesn’t help either in a 24/7 mobile digital info ecoystem. Sounds more like “weak.”
If anyone doubts that no one buys the past, only the future and its alluring promises, consider the recent sale of Associated Content for a reported $90-100 million to Yahoo. Its asset base is basically an army of scribes who are willing to work for little to nothing, grinding out forgettable, keyword-laden advertiser bait. Hey, who needs the expense of thoughtful analysis and a stable of Pulitzer Prize winners?
In a rapidly changing age where web-based news aggregators and blog factories make moguls of the likes of Arianna Huffington, print news magazines seem like faded sirens from yesteryear. But Harman is not alone in seeing life in the old gals yet. After all, money-hemorrhaging Newsweek drew several bidders and multi-billionaire Michael Bloomberg parted with $5 million in pocket change to pick up BusinessWeek recently. (But the financial information empire had a clear strategic purpose for a business magazine and quickly redesigned the publication for that role.)
If long-time operators like the Post and McGraw-Hill are desperate to get out (and they were), why are others trying to get in? Harman and his wife, a longtime congresswoman from California, no doubt enjoy intellectual tussle and the satisfaction of influencing public policy. Perhaps they’ve jealously watched Bloomberg mount multiple peaks of business, media and politics, or Mort Zuckerman for that matter. And consider one of the toughest, shrewdest investors in the world, Carlos Slim of Mexico. He has accumulated a stake in the New York Times second only to the controlling family’s (in the form of lucrative bonds so he probably can’t lose).
What’s going on here? Business contrarianism? Far-sighted vision not available to us mortals who can’t see around corners? Vanity?
Whatever, Harman’s not worried about his new property’s waning fortunes. He said today he will give the magazine “years” to turn itself around. His determination to stay in the game is admirable, but honestly … years? We all know that only Sumner Redstone is immortal.