Newsweek sold to publishers of International Business Times; will remain ‘100% digital’
Earlier today, IAC/InterActive reached a deal to sell Newsweek, which has been publishing since January as a digital-only version of the old magazine, to the owners of the International Business Times.
The announcement ends weeks of speculation about who might purchase what remains of the 80-year-old journalism brand, which was on the block for the second time in just three years.
Newsweek, the once-venerated weekly newsmagazine that at its height in the early '90s rivaled Time for readers and exercised tremendous influence on Washington politics, fell on hard times under the ownership of The Washington Post Company, and was sold to audio-equipment magnate Sidney Harman for a dollar in late 2010.
Harman subsequently entered a partnership with Washington Post Company board member and IAC chairman Barry Diller to merge Newsweek with IAC's Tina Brown-helmed digital-news company, The Daily Beast, but the merger was viewed as a failure. After Harman's death and the cessation of the print version of Newsweek at the end of 2012, Diller admitted in interviews that it had been a mistake to purchase the magazine and attempt to merge it with The Daily Beast in the first place.
In a private deal, none of the details of which are yet clear, the Newsweek brand is now the property of a digital start-up that has flown under the public radar while rapidly increasing its readership across the internet.
International Business Times, with its 10 national editions worldwide, published in several languages, is a relative newcomer: Launching in 2005 as the brainchild of Etienne Uzaac and Johnathan Davis, an economics grad student and a computer programmer, the property experienced rapid readership growth in 2010 and 2011, and in 2012 announced the formation of an editorial team led by Jeffrey Rothfeder, a former national editor for Bloomberg News.
IBT Media is as a rule a digital-only company, a fact underscored by quotes in a press release the company issued this afternoon.
"We are 100% digital with a track record of successfully growing online media properties," Davis said in the release. "The Newsweek brand is strong around the world and we believe there is significant potential to leverage that as well as enhance the editorial offering and continue to modernize the operations and approach. We are excited to add Newsweek to our portfolio of growing news brands and to pursuing the great opportunities ahead together."
"Newsweek will remain fully digital as IBT Media’s holdings are all 100 percent digital properties," a spokeswoman for IBT Media confirmed to Capital, when asked whether there were any plans for a return of the print edition. "No print," she added.
One irony not lost on New York media locals: In a 2011 expansion, IBT Media moved into new headquarters at 7 Hanover Square, the previous headquarters of Newsweek. The move was characterized by The New York Observer as "braving bad juju."
An internal memo announcing the sale that went out to employees of Newsweek and The Daily Beast today said that Brown's staff will continue to run the publication for a transition period of 60 days.
"IBT will be talking to staff during this time about potential job opportunities at the new venture," the memo states.
It's unclear how many editorial employees of the combined NewsBeast operation are devoted to Newsweek full time or mostly full-time at this point, but sources told Capital in recent weeks that there are just a handful—five or six maybe, according to one insider. For some context, there were still hundreds of Newsweek employees back in the heady days of 2010, but the newsroom headcount has been steadily downsized over the past couple years.
Most recently, the digital-only Newsweek has been top-edited by former New Republic editor Richard Just following the departure of Justine Rosenthal last month and of her predecessor, Tunku Varadarajan, in March.
A Newsweek spokesman did not immediately respond to questions about the sale price and who the other bidders were, but there were reportedly several suitors in the running. The New York Post reported earlier this week that Jay Penske was one of them.
Here's the full memo about the sale from interim Newsweek C.E.O. Rhona Murphy:
Earlier today, a deal was signed for the sale of Newsweek and I am delighted to inform you that the new owner will be IBT Media, the publishers of the International Business Times.
IBT is a growing digital global news publication that delivers international business news to an audience of over 7 million in the U.S. and 13 million people worldwide every month through its network of digital publishing platforms. It is produced in 10 country editions in 7 different languages, offering in-depth coverage that is relevant and specific to each market.
Effective as of the closing, which we expect to occur in approximately a week, there will be a transition period of up to 60 days, during which we will continue to run the business. IBT will be talking to staff during this time about potential job opportunities at the new venture and as we learn more about this process we will of course inform you and the Guild. Please reach out to Lauren Strada if you have any questions meanwhile.
We believe IBT will serve as an excellent new home in which Newsweek has the opportunity to thrive.