Barry Diller, who will own half of the newly merged venture between The Daily Beast and Newsweek, sees a modest role for himself.
Diller, who financed The Daily Beast’s launch as chief executive of parent company IAC, will serve as a director of the joint venture. Newsweek owner Sidney Harman, by contrast, will have the title of executive chairman. But that arrangement is just fine with Diller.
“I’ll be the cheerleader I’ve always been with the Beast, and chime in with my usual wayward ideas,” he says.
Weighing in by email from an overseas trip, Diller responded to skeptics who question the benefit for the website in teaming up with a money-losing print magazine.
“I think the combination is going to be better financially for both the Beast and Newsweek from the first day,” he says.
It was a combination that seemed unlikely to happen. The marriage talks fell apart on Oct. 18, after weeks of frenetic courtship and arduous negotiations.
“The prenup got too complex,” Tina Brown, The Daily Beast’s editor in chief, told readers. The challenge of merging the two-year-old Beast with an ailing print magazine, which Harman, a 92-year-old businessman, had just purchased, seemed too daunting.
But as it turned out, the deal “was not dead literally,” Brown says in an interview. “It was in a coma.”
Harman, who had said he was moving on to find another Newsweek editor, called Diller after the collapse and said he wanted to resume the talks. On Friday came the announcement that the staffs would launch a joint venture known as the Newsweek Daily Beast Co., with Brown as editor in chief of the combined staff.
“How many times have you and your wife thrown up your hands, said ‘I’ll never talk to you again,’ and stormed out of the room?” Harman asks. “We found areas of misunderstanding, occasionally facilitated by the language of the lawyers’ drafts.” Eventually, he says, “we stepped back” and patched things up.
The patching up had far less to do with financial issues than the question of control: carving out adequate responsibilities for the two wealthy businessmen while preserving Brown’s editorial independence. “Essentially it was all in the governance—there really wasn’t an issue on the deal structure from the very beginning,” Diller says.
Brown says she envisions her partnership with Harman evolving into the kind of “collaborative relationship” she had with Si Newhouse, the owner of Conde Nast Publications.
A key stumbling block, says Brown, is that she and The Daily Beast President Stephen Colvin, who will become CEO of the new company, are “used to running our own shows,” while Harman, in making a major investment, wanted a hands-on role.
An undersecretary of Commerce in the Carter administration who made his fortune with the stereo equipment giant Harman International, Harman will serve as executive chairman of the new firm, and Brown will report to the company’s board.
He calls Brown “iconic,” saying, “She has the experience and intelligence and imagination and ambition—all of these things I would hope will characterize the new Newsweek… I’ve had a long and effective career in industry, government, and education. I bring all that experience to her as a resource.”
Harman, who divides his time between Washington, D.C., and Venice, California, is married to a Democratic congresswoman, Jane Harman.
Diller, who runs The Daily Beast’s parent company, IAC, will be a director and 50 percent owner of the new company (with Harman owning an equal stake). He had been publicly discussing a possible print venture even if the Newsweek deal had not come through. “As much as digital of course is going to take more and more share, advertisers like to have a print presentation of what they’re trying to say, if it’s tied well into this very fast-moving Internet publication,” he said at The Daily Beast Innovator Summit in New Orleans last month.
Brown says she envisions her partnership with Harman evolving into the kind of “collaborative relationship” she had with Si Newhouse, the owner of Conde Nast Publications. During the negotiations, Harman “got more and more comfortable as he got to know Steve and I, that we are a professional team,” she says. “Sidney Harman has taken on a really tough challenge in rescuing Newsweek. I do admire his valor and his commitment.”
That is now her challenge as well, a task made more difficult by an exodus of top talent in the months since Harman bought the magazine for a dollar and the assumption of millions of dollars in liabilities, from the Washington Post Co. Jon Meacham, Howard Fineman, Mike Isikoff, Evan Thomas, and Fareed Zakaria are among those who have decamped.
The British-born Brown, who made her reputation as the high-profile editor of Vanity Fair and The New Yorker—but had less success with the short-lived Talk magazine—was an obvious name for Harman’s short list. But with Time magazine now dominating the newsmagazine field and U.S. News & World Report having ended its print run, Newsweek, which lost $39.5 million last year, needs to find a profitable niche.
“The plan is for one plus one to equal 11 in terms of revenue and appreciation by the audience, and to run it as efficiently as possible,” says Colvin, who created Maxim as president of Dennis Publishing and also launched The Week magazine in the U.S. Asked whether jobs will be eliminated, Colvin, who puts Newsweek’s staff at 250 (The Daily Beast has a 70-person roster), says no decisions have been made, but that the website was already in the process of expanding. “There are a lot of synergies between what we need and what they’ve got, and vice versa,” he says.
Journalistically, Brown says she will take the publication in “a different direction” than Meacham, its last editor, who turned the weekly into a left-leaning magazine of opinion.
“The effort to keep on persisting with something called a newsmagazine is probably outdated at this point,” Brown says. “Magazines are great venues for predictive and reconstructive journalism, for cultural journalism, for narrative journalism, for profile journalism. All these things can be done online, but do work better with the rhythms of print.”
The merging of the cultures will be accompanied by a physical relocation. The Daily Beast’s staff, now based in the Frank Gehry-designed IAC Building on Manhattan’s West 18th Street, plans to move to Newsweek’s new offices in the Financial District. Colvin said the integration of the two operations will take three to four months to complete.
The merger will reverse the usual process, in which an established print publication tries to set up shop online. Brown is attempting to fuse a website with a 77-year-old weekly, prompting concerns among some of The Daily Beast staffers that the fast-moving site could become less nimble.
“We’ve already got a thriving digital brand that works with the metabolism of constant, 24/7 news,” Brown says. “We will not be slowing up the Beast. We’ll be putting the adrenaline of the Beast into the revival of Newsweek.”
Harman concedes that Newsweek cannot be turned around overnight.
“I believe it will take the better part of two or three years to have this one company operating on its own fuel,” he says. “If that happens I will consider it a significant achievement, and a hell of a good thing for journalism, the magazine, the company’s employees and the United States of America.”
He pauses. “How’s that for modesty?”
Howard Kurtz is The Daily Beast's Washington bureau chief. He also hosts CNN's weekly media program Reliable Sources, Sundays at 11 a.m. ET. The longtime media reporter and columnist for The Washington Post, Kurtz is the author of five books.