Bloomberg to buy magazine
In a push into the consumer market and to draw more subscribers to its lucrative computer terminals, financial news and data giant Bloomberg has agreed to acquire BusinessWeek, the 80-year-old business news magazine that has suffered steep losses.
The purchase price was only about $5 million plus the assumption of liabilities, according to people familiar with the deal. It’s a sign of the dismal state of the print media business and problems at BusinessWeek, which is projected to lose more than $40 million this year on revenue of about $130 million.
The financially troubled magazine was put up for sale in July by its corporate parent, McGraw-Hill Cos., which held talks with 25 potential buyers, including an investment firm run by Strauss Zelnick -- chairman of Take-Two Interactive Software Inc. and former president of 20th Century Fox -- and Platinum Equity, the Beverly Hills private equity firm that recently acquired the San Diego Union-Tribune newspaper.
The magazine will continue operation and probably will be renamed Bloomberg BusinessWeek, said Norman Pearlstine, Bloomberg’s chief content officer, who will become chairman of the publication.
Bloomberg has been expanding its offerings for consumers in recent years, including investments in television and radio, a monthly print magazine and its website. Last year it hired Pearlstine, former managing editor of the Wall Street Journal and editor in chief of Time Inc. The company, owned by New York Mayor Michael R. Bloomberg, still earns the majority of its revenue from the 300,000 subscribers to its computer terminals that provide financial news and data.
“This deal goes both ways,” Pearlstine 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.”
Bloomberg is counting on BusinessWeek’s well-known brand name and nearly 1 million readers, many of whom are business and government professionals, to help it reach new subscribers.
“BusinessWeek helps better serve our customers by reaching into the corporate suite and corridors of power in government, where news that affects markets and business is made by CEOs, CFOs, deal lawyers, bankers and government officials who typically are not terminal customers,” Bloomberg President Daniel L. Doctoroff said.
The magazine employs about 400 people. Pearlstine declined to say whether there would be layoffs as a result of the acquisition. He did say, however, that BusinessWeek and Bloomberg employees would work together on print, digital and television content and that Bloomberg was committed to making the magazine successful.
“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.”