The death of Newsweek financier Sidney Harman Tuesday casts a cloud of uncertainty over how long his family will be willing to prop up the money-losing magazine. This morning, reporters are piecing together signs of the family's resolve. Harman's attorney tells the Wall Street Journal that the family will "retain its 50% interest" in the merged Newsweek Daily Beast Co. and "are totally committed to active participation and enthusiastic support." That matches with what the magazine's editor-in-chief Tina Brown said yesterday about the "solidly continuing" commitment of the family. When the Journal pressed Harman's attorney on what Harman's merger agreement stipulated in the event of his death, the attorney said "It's not proper to do that on this sad day."
However it should comfort some Newsweek staffers that The Wrap, citing an insider with knowledge of the deal, reports that the acquisition agreement with the Washington Post Co. "required Harman to commit to a funding plan in the case of his own demise."
If Harman's family's enthusiasm matches his, then here's how the numbers will play out. When Harman purchased Newsweek for $1 he assumed its $47 million of debt. As The New York Times notes, he said he was willing to give the magazine three years to succeed and wouldn't drop more than $40 million into it. However, the Journal notes that Harman's "calculus" changed after Newsweek's merger with The Daily Beast and, with the efficiency gains of combining the two operations, he expected to break even "relatively soon." The combined operation needs to turn around soon, according to The New York Post, since the two publications had "combined losses of around $22 million last year and—despite improvements—were on track to lose $10 million this year." As both the Post's Keith Kelly and Forbes's Jeff Bervovici note, the hope is that the Newsweek Daily Beast Co story unfolds like that of New York magazine after its owner, financier Bruce Wasserstein, died in 2009. "So far, his family's attachment to that publication seems to be unwavering," writes Bercovici. "Then again, it’s been a long time since Newsweek was as healthy as New York is now."
This article is from the archive of our partner The Wire.
We want to hear what you think about this article. Submit a letter to the editor or write to email@example.com.