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HOW MUCH FOR THAT WEEKLY IN THE WINDOW?: Newsweek: hot commodity or waste of money? The answer depends on the day and who is talking (media observers are unenthused, while big-pocketed billionaires and private-equity players curiously claim they are interested in taking on the beleaguered newsweekly). As the first round of bidding closed Wednesday at 5 p.m., there were two definite prospects: Christopher Ruddy of Newsmax Media, and OpenGate Capital, which employs former Hachette Filipacchi Media U.S. chief executive officer Jack Kliger and owns TV Guide. Both parties submitted bids to Allen & Co., the firm handling the auction. A spokesman at Newsmax Media said that if the company acquires Newsweek, the title would continue with its editorial mission and publish objective news reporting and analysis (Newsmax publishes a conservative monthly magazine).
Other bidders reportedly include Sidney Harman, founder of sound systems company Harman Kardon, and Thane Ritchie, head of Ritchie Capital Management. It’s well documented the winning bidder will face an uphill battle to turn around the money-losing Newsweek. The title was down 30 percent in ad revenue last year, and Media Industry Newsletter reports that, year to date, Newsweek’s ad pages have declined almost 6 percent and that the magazine lost $28 million last year alone.
So where does that leave the price tag? Well, so far sources are fairly tight-lipped — placing the winning bid somewhere between the $1 that OpenGate paid for TV Guide (although it borrowed billions to buy it) and the $5 million plus significant debt that Bloomberg shelled out for BusinessWeek. Now on to the second round.
— Amy Wicks