Going Once… Going Twice…Newsweek Sold for $1 to the Old Dude sitting in the back

No! It wasn’t through eBay nor Groupon nor LivingSocial if that’s what you think.  A 92-year-old dude named Sidney Harman paid $1 for Newsweek, while taking on the company’s considerable debt of about $70 million.  Harman will retain a majority of Newsweek’s 300-plus staffers.

So, I guess Mr. Harman bought the Newsweek for $70,000,001. He paid the $1 upfront and God knows how long it will take him to pay off the $70 m debt. Given he is a Billionaire, perhaps he pays it all off shortly.

Washington Post put Newsweek magazine on the block about three months ago.  Editor Jon Meacham also confirmed he will step down when the sale is complete.

Newsweek was launched in 1933, and purchased by The Post in 1961. Other suitors had included Fred Drasner, the former publisher of the New York Daily News and U.S. News & World Report, and hedge fund Avenue Capital Group.

Sidney Harman

It’s so sad to see what’s happening to many of the traditional papers and magazines. I mean think about it… The company was established less than 10 years before WWII, with 300 staff today…. sold only for $1?

Since we have leveraged every single newspaper and magazine in the world, it becomes impossible for them to manage through an economic downtown. We jacked up the prices of all these publications through mergers and acquisitions, driven by the likes of Murdoch, using other people’s money (the banks).

As revenue from subscriptions drops, they have huge fixed costs in terms of interest payments. So they go on a cutting spree only to cut out important reporting leaving them more vulnerable. It leaves them no options but to file for bankruptcy, sell at fire sale rates or just close.

I am not a big fan of Newsweek, but I am very worried because we have lost the vast majority, if not all, our independent voices for reporting. We are no longer getting any fact based reporting. Instead, we get opinion based reporting disguised as fact based, which drives a political agenda bent on disintegrating our democracy so that only the wealthy get a vote and control leaving the rest to be slaves or minions of the rest

So, I guess the next step is to appoint Carl Rove editor-in-chief of Newsweek and let the head-exploding of all closet Che Guevarians begin … 🙂

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About Elias Shams
I have been a serial entrepreneur in telecom and social media space for past 12 years or so. I hold a M.S. degree in Telecommunication Engineering from the George Washington University and a B.S. degree in Electrical Engineering from the University of Maryland. I’ve lived and worked in many countries and cities including London England, Tehran Iran, Bonn Germany, Paris France, Alicante Spain, Delhi India, and my favorite of all Washington, DC of great US of A. Two of the greatest Washington, DC based companies I worked for and very proud of are Yurie Systems which was sold to Lucent in 1998 for $1.23 B and telezoo.com that I founded in 1999. I am currently the founder and awesomizer @ awesomize.me

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