Audio maker snaps up ailing Newsweek

NEW YORK - Sidney Harman, the 91-year-old founder of audio equipment maker Harman International Industries, 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 US$30 million loss in 2009, and Newsweek expects to lose money again this year.

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 350 staff.

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 said it was keeping the magazine's pension liabilities and certain other, unspecified, employee obligations.

With the print industry in decline, the Post Co. likely sold Newsweek at a fire-sale price.

Bloomberg bought BusinessWeek last year for just a few million dollars.

The Post, which acquired Newsweek in 1961, has been looking for a buyer since May, when it hired 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 Newsmax; Open Gate Capital, the private equity firm that owns TV Guide magazine; and Thane Ritchie, a hedge fund manager.

The winning bidder founded Harman International Industries in 1953. Today, the company brings in US$3 billion in revenue selling equipment under brands including JBL, Infinity, Harman Kardon and Mark Levinson.

Its audio products are used in Daimler AG's Mercedes-Benz, BMW AG and Toyota's Lexus.

- AP