The Washington Post Co. announced Wednesday that it has retained Allen & Company to explore the possible sale of NEWSWEEK magazine. The newsweekly, which has struggled in recent years, was launched in 1933 and purchased by The Washington Post Co. in 1961.
Washington Post Co. Chairman Donald E. Graham came to New York to tell the magazine staff at a 10:30 a.m. ET meeting on Wednesday. "We have reported losses in the tens of millions for the last two years," he said. "Outstanding work by NEWSWEEK's people has significantly narrowed the losses in the last year and particularly in the last few months. But we do not see a path to continuing profitability under our management."
Graham said the company decided to go public with the news to invite as many potential buyers as possible, and said the sale could be completed within a few months. "Our aim will be--if we can do it--a rapid sale to a qualified buyer," he said. "We're a public company and we have to consider the price offered. But we'll have a second and third criteria: the future of NEWSWEEK and the future of those who work here."
In a later meeting, NEWSWEEK Editor Jon Meacham told the editorial staff that he continues to believe in the mission of the company. Meacham said he would do everything he could to ensure the continuation of the magazine, including personally pitching potential buyers. He also reminded the staff that NEWSWEEK wasn't closed today, but was put on the market.
Graham added, "If anyone should take the blame for this ending, it is me—for not seeing early enough and reacting in the right way to the changes that have come to our industry. But as a former member of this staff, I will always be proud to have been part of NEWSWEEK. And, I will be doing what I can to assist its future and yours."
To that end, NEWSWEEK Inc. Managing Director Ann McDaniel told the staff: "Because we don't have a secret buyer waiting in the wings, because no deal is imminent, some things are unknown. I do hope that you get to stay together as the great team that you are. In case that doesn't happen though, let me make one thing perfectly clear: Any employee, business or editorial, in good standing at the time of the sale, who does not get an offer from the new owner, will get the severance, notice, dismissal and RIF pay described in the contract and in NEWSWEEK's severance policy on the intranet. If you are new to NEWSWEEK, and remain in good standing through the sale, you will get four months of pay."
McDaniel told the staff she was saddened by the news, but that the company has made significant strides in the last year. "Our industry is changing," she said. "NEWSWEEK has changed along with it, and today's announcement reminds us that we must continue to grow, to adapt, to find new ways of serving readers, users and advertisers. I am incredibly proud of what we --really what you--have done in the past year. We are a better magazine, both domestically and internationally. We're a better Web site, and we'll be even stronger after the upcoming launch of our redesigned site. Advertisers like what we are doing and are paying a higher premium for it. Our business processes are better than they have ever been."
NEWSWEEK is an internationally known and respected publication, providing unique news, commentary, and insight into political and social developments in the United States and around the world. The magazine has 1.5 million subscribers in the United States and Canada, publishing 11 editions in more than 190 countries. Newsweek.com attracts 5.1 million unique users. Both the print and digital editions continue to win numerous awards for their journalism.
In a statement, Graham said, "The losses at NEWSWEEK in 2007-2009 are a matter of record. 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."