Someone Bought Newsweek For $1, Probably Overpaid

An audio equipment magnate dug into his pockets, fished out some loose pocket change and bought Newsweek in August for $1. We’re not talking about a single issue at a news stand, but the entire magazine operation.

The Washington Post reports its eponymous parent company sold Newsweek for $1 to 92-year-old former U.S. Under Secretary of Commerce Sidney Harman.

Before you crack wise that you would have paid as much as $5 to own the prestigious magazine, bear in mind that Harman is taking quite a risk, agreeing to take on $10 million of the magazine’s debt, as well as its broken business model that lost $30 million last year.

Post Co. discloses Newsweek’s price tag: $1 [The Washington Post]

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  1. dbeahn says:

    “$1 and other valuable considerations” is the phrase you’re looking for.

    • sir_eccles says:

      Consideration is such a tricky concept in contract law, not many lay people understand it.

      • Damocles57 says:

        Which is probably why you don’t have many lay people negotiating contracts with the term “considerations” without the aid of lawyers.

        • PTB315 says:

          Which brings us back to dbeahn’s comment. You have to “dumb down” the message for the masses (I’m not calling people dumb, that’s just the commonly used phrase). It’s why newspapers are written at a 3rd grade reading comprehension level. I might be wrong on exactly what level it is, but it’s below high school level.

          The following is not relevent to the story we’re commenting on, but it’s related to the comments I’m replying to:

          It’s actually refreshing to see an editor put that clarification in the write up. I think the Consumerist staff at times assumes too much of their readership. Or at least the people who comment on posts. The posts with the most comments occasionally center around stories where someone is mad at a company because they (the customer) don’t understand contract law. Then a lot of people get mad at the company for not giving money back to the confused customer.

          I don’t like where the Consumerist is heading in terms of the number of those types of posts. I’m not saying there’s a clear cut line. However, lately it seems that they’re moving away from “obvious case of customer getting screwed” towards “questionable”.

          • Phil Villakeepinitrreal says:

            And yet, it is entirely unreasonable to expect everyone to have a lawyer look at every contract they are faced with in the modern world. The number of contracts we have to sign is absolutely staggering when you think about it, and it is nearly impossible to live in the world as it stands without agreeing to these contracts. But how can a consumer properly abide by them when even well-educated people often cannot understand them? Indeed, contracts companies make us sign are often written, intentionally, to be so hard to understand that even experts can’t give you definite answers on what they mean when they examine them.

            You can say that you shouldn’t sign a contract you can’t understand, but then where does that leave you? You’ll be unable to get nearly any necessary service or product, and denied access to most of the “wants” as well.

            So the question is, is the consumer at fault for failing to understand the contract, or is the company on the other side at fault for intentionally using language and terms that make it dificult or impossible for the consumer to enter the contract with a proper understnding of their obligations?

    • shangyle says:

      Heh. +1 dbeahn. As someone who spent the last month studying consideration, that is hilarious.

  2. ktetch says:

    Hell, I’d have paid $5, then declared it bankrupt, and then went Righthaven with the copyrights.

    • domcolosi says:

      If you declare bankruptcy, though, the judge might order you to sell the copyrights and use the money to pay back the debts.

      Also, it’s possible that by “taking on the debts,” what is meant is that the buyer moves the debt to himself or his company, preventing this from working anyway, unless the buyer himself declare bankruptcy.

  3. SanDiegoDude says:

    I offer… TWO FIDDY!

    • Rectilinear Propagation says:

      Oh, now it’s only two-fitty!! What?! Is there a sale on Loch Ness munchies or something?!

      • shadowboxer524 says:

        I think Harman wanted to kill Newsweek. He thought it’d go away if he gave them a dollar.

        • Rectilinear Propagation says:

          Well of course they’re not gonna go away! He gave Newsweek a dollar, they’re gonna assume he’s got more!

  4. pecan 3.14159265 says:

    We knew this in August. http://mediadecoder.blogs.nytimes.com/2010/08/02/deal-for-newsweek-close-to-completion/

    Just because the figure is “official” news now doesn’t mean we didn’t know that it was more or less exactly what the deal was purported to be.

  5. zibby says:

    Yup, overpaid. I picked up a copy that my in-laws had on the coffee table and it was freakin’ terrible. They can’t even manage to do that little thing with the arrows right anymore. At the very least it needs to be burned to the ground and rebuilt.

    • Total Casual says:

      My parents finally gave up on Newsweek last year. They’d been subscribers for my entire life until then.

    • Mamudoon says:

      For some reason I can’t figure out, I’ve been getting Newsweek for years. Never subscribed to it, and I’ve never received a bill, either. Did some random person gift me with a lifetime subscription? Eh, either way, it’s something to flip through if I’m bored.

  6. RandomHookup says:

    Well, he does get a free lifetime subscription with the deal…and a Newsweek tote bag and mug.

  7. dr_ting says:

    I woulda paid tree fiddy.

  8. Gulliver says:

    The Post (the seller) has agreed to cover up to $10 million in debt. All other debt would be the responsibility of the buyer as opposed to ” Harman is taking quite a risk, agreeing to take on $10 million of the magazine’s debt”

  9. DanRydell says:

    Are you really in a position to criticize Newsweek’s business model when consumerist.com was losing money when it was sold by Gawker and now doesn’t really attempt to make money? I don’t remember the last time Newsweek asked me for a donation.

    • DanRydell says:

      ETA: It’s not the business model that is broken. Print magazines can still be successful.

    • anewmachine615 says:

      Y’know, it did kinda lose $30 million last year. That’s a pretty good sign of problems. And “print magazine” isn’t the extent of a business model. Demographic appeal, placement, advertising sales, reporting, etc. are all places where Newsweek is obviously doing something wrong in relation to its more successful competitors.

      • DanRydell says:

        A business model is a higher level description of how a company makes money. A company can lose money with a solid business model if their execution is poor.

    • pecan 3.14159265 says:

      You know it doesn’t attempt to make money because it’s under Consumer Media LLC, which is not-for-profit. It can’t attempt to make money.

      • DanRydell says:

        Yeah, you missed the point. I think it’s ironic that Consumerist is criticizing Newsweek for losing money when Consumerist tried and failed as a for-profit blog and only exists now BECAUSE it was purchased by a non-profit.

        • broncobiker says:

          Consumerist left Gawker because they couldn’t in good faith have advertisements on this website, it would run the risk too high of becoming biased. (Oh well Coca-Cola gives us a lot of advertising money, so we can’t run stories about them, Sprint didn’t give us anything though, so pound them with everything we’ve got.)

          You’re just an uninformed mass. Welcome to America.

  10. a354174 says:

    I think he should sell it for $10.

    That’s a 1000% return on investment.

  11. JonStewartMill says:

    If the cover depicted above is representative of Newsweek’s journalistic quality these days, $1 was too much.

  12. econobiker says:

    Was he called by telemarketers selling the magazine? Did they allow him to think he was only getting a years subscription to the magazine for $1 and not buying the whole thing?

    Is this elder abuse? Does he need caller ID on his phone?

    (I am joking about the low value of the magazine not his business acumen. )

  13. ElizabethD says:

    Has anyone checked his receipt?

  14. Daggertrout says:

    I think the real issue here is whether or not our babies are racist.

  15. mythago says:

    Um. Guys. “$1 and other valuable consideration” is a legal trick. It doesn’t mean you really paid $1, it means that the transaction wasn’t a gift.

    It ALSO likely means that there’s a separate, secret agreement letter with the real terms, and “$1 and other valuable consideration” is the public acknowledgment that somebody paid money for the thing.

    • jamar0303 says:

      On the other hand, that people think this is a believable price says something about the value of this… publication.

  16. italianbaby says:

    i’ve been subscribing to newsweek for 25 yrs. it was at one time a great magazine. i recently cancelled my 4 yr. subscription. it has gone thiner in pages, every page was about politics.
    they did away with the good stuff and was very consumer friendly with lots of info. and good articles.
    when i called to cancel, which they indeed refund the remaining 3.6 yrs. (they have a money back guarantee) the lady on the phone said they have been losing readers by the droves.
    she agreed the magazine has gone downhill in the two years.
    i kept waiting for a revamp to no avail.
    hopefully this new owner can turn it around, for i see this magazine folding soon.

  17. post_break says:

    Way to make this Harman fellow out to look like some nobody. He’s the guy behind Harmon Kardon speaker systems.

  18. MeowMaximus says:

    Huh? Does anyone still read that useless rag?

  19. jp7570-1 says:

    92 years old and taking on a $10 million debt? Didn’t he hear that TARP is over?

  20. OnePumpChump says:
  21. gman863 says:

    If I were in it for the money and nothing else, I’d reinvent Newsweek by hiring Glenn Beck, Sarah Palin and Bill O’Reiley. The only standard I would hold them to? If it feels good, do it.

    I know what you’re thinking: Yes, it’s Larry Flynt approach of using shock and disgust to turn a profit — the twist is it will appeal to people who hate sex..