Bloomberg buys BusinessWeek [Updated]
The media mogul and mayor of New York has acquired BusinessWeek from McGraw Hill. The deal combines two of the biggest names in business journalism, although in some ways it seems an odd fit. Bloomberg is about the future. He delivers his news online and through his subscription terminals, while BusinessWeek is an old-school magazine.
But it still has a brand name that apparently is worth between $2 million and $5 million in cash along with assumed liabilities. At least that's what BusinessWeek's website reported the price to be, and in theory it should at least be in the ballpark. Both Bloomberg and McGraw-Hill declined to comment on the financial terms.The deal marks a shift for Bloomberg, which is known primarily for its subscription news service for financial professionals, into the consumer media space. In a statement, company President Daniel L. Doctoroff said BusinessWeek print and online content will be integrated with Bloomberg's subscription news terminals, as well as its Web, television and mobile properties. The New York Times reported that the magazine will be renamed Bloomberg's BusinessWeek. No word yet on whether Bloomberg will also try to regulate salt consumption among the staff. (As mayor, Bloomberg has expressed concern about salt as well as other dietary issues.)
Doctoroff didn't comment on further plans for the magazine. In a sign of dedication to the print property, however. Bloomberg appointed its chief content officer, Norman Pearlstine, the former managing editor of the Wall Street Journal and editor in chief of Time Inc., as chairman of BusinessWeek.
According to BusinessWeek, the magazine is projected to lose in excess of $40 million this year on revenue of about $130 million. McGraw Hill decided to put the magazine up for sale in the summer. Other potential suitors looking at BusinessWeek before Bloomberg made its offer included ZelnickMedia, the investment firm run by Take-Two Interactive chief executive and former 20th Century Fox president Strauss Zelnick, in combination with former Wall Street Journal publisher L. Gordon Crovitz and private equity firm OpenGate, which owns TV Guide Magazine.
It's not yet clear whether Bloomberg will institute major layoffs at BusinessWeek once the deal closes. Several staffers have already left the magazine recently amid uncertainty over its future.
Updated at 5:20 p.m.: Bloomberg is committed to the print magazine and hopes the BusinessWeek brand will help it sell more terminals, Pearlstine told The Times in an interview.
"This deal goes both ways," he said. "On the one hand, it makes our content more valuable for terminal subscribers, and on the other hand it enables us to leverage our assets with consumers."Pearlstine confirmed that the magazine will likely be renamed Bloomberg BusinessWeek and said that, despite the huge challenges in print media, his company is committed to continuing publication.
"BusinessWeek has got a very talented staff, but has been resource-constrained over the last few years because it's a magazine in a very tough market," he said. "We can marry that asset to the 2,200 journalists of Bloomberg News in 145 offices in 72 countries, and that's going to enable us to create a weekly that we’re going to invest in and make a great magazine reflecting the strength of the entire staff of Bloomberg."
Pearlstine said that BusinessWeek will retain some of its own editorial staff but declined to speculate on whether there will be significant layoffs.
-- Ben Fritz
Photo: Copies of BusinessWeek magazine. Credit: Daniel Acker / Bloomberg.