Sidney Harman, the 91-year-old founder of audio equipment maker Harman International Industries Inc., has agreed to buy Newsweek, ending a nearly half-century chapter for the magazine as part of The Washington Post Co.
Jon Meacham, the magazine's top editor since 2006, will step down.
Newsweek has been struggling to find a profitable niche amid poor economic conditions and a flood of online competition. Declines in circulation and advertising led to a nearly $30 million loss in 2009, and Newsweek expects to lose money again this year.
In an interview, Harman declined to discuss exactly how he will finance the magazine's operations. But he said he will give Newsweek some breathing room for a turnaround effort.
"My purpose is to get the magazine operating in a reasonable amount of time — and that's years, not weeks — on its own fuel," he said.
Harman has pledged to keep most of the magazine's staff, currently at about 350. He also said he doesn't envision any radical overhaul of the magazine, which was redesigned last year with a greater focus on long-form reporting and analysis to compete more directly with titles such as The New Yorker and The Economist.
"I bring intellectual curiosity and serious business experience to a place that could be done no harm from the first and a great deal of good from the second," he said.
Harman said he hasn't decided on a replacement for Meacham as editor.
Financial terms were not disclosed, although the Post Co. said it is keeping the magazine's pension liabilities and certain other, unspecified employee obligations.
"In seeking a buyer for Newsweek, we wanted someone who feels as strongly as we do about the importance of quality journalism," Post Co. CEO Donald Graham said. "We found that person in Sidney Harman."
Graham added, "He has pledged not only to continue to produce a lively, compelling and first-rate news magazine, but also an equally dynamic Newsweek.com."
The Post Co., which acquired Newsweek in 1961, has been looking for a buyer since May, when it hired the investment bank Allen & Co. to help shop the magazine to potential bidders.
Despite continuing losses, Newsweek drew several offers, including ones from Newsmax Media, the publisher of the conservative monthly Newsmax; Open Gate Capital, the private equity firm that owns TV Guide magazine; and Thane Ritchie, a hedge fund manager who made an unsuccessful bid last year for the company that publishes the Chicago Sun-Times.
The winning bidder founded Harman International Industries in 1953. Today, the company brings in nearly $3 billion in annual revenue selling equipment under brands including JBL, Infinity, Harman Kardon and Mark Levinson. Its audio products are used in such auto brands as Daimler AG's Mercedes-Benz, BMW AG and Toyota Motor Corp.'s Lexus.
Though he retired from the company in 2008, Harman still holds a number of titles at philanthropic and cultural institutions, including the Aspen Institute and Freedom House.
He is the husband of Rep. Jane Harman, D-Calif., chairwoman of the House Homeland Security subcommittee on intelligence.
Washington Post shares climbed 99 cents to $434.88 in extended trading after the deal was announced. In regular trading Monday, shares rose $13.40, or 3.2 percent, to close at $433.89.
Source: AP News