Editor's Note: BusinessWeek rode high on tech advertising during the 1990s making a lot of money for its owner, McGraw Hill. But during the past ten years, the publication has been squeezed between dailies like the New York Times and the Wall Street Journal on one end and monthly and bi-monthly publications Forbes and Fortune on the other end.
The New York Times - Numbers sometimes tell a story. And the figures for BusinessWeek suggest it is having one tough time.
Bids are due Tuesday for the magazine, which McGraw-Hill has owned for 80 years. A handful of potential investors, including Bloomberg L.P., are still looking at the company. But before buyers had a chance to comb through the magazine’s finances, initial interest had been much higher. BusinessWeek lost more than $43 million last year, though that included certain costs like rent and overhead, which a document sent to potential investors suggests McGraw-Hill has been charging too much for. A buyer would also have to assume much of the $31.9 million in debt.
As the thwarted sellers of The Rocky Mountain News and The Seattle Post-Intelligencer have discovered, this year is not a good time to sell news media outlets. Print advertising is down, and readers’ attention is being diverted to the Web. Business magazines, including BusinessWeek and rivals like Forbes and Fortune, have been hit particularly hard, as automotive, financial services and technology advertisers have pulled back their marketing spending.
So far, about six investors appear interested in BusinessWeek, including OpenGate Capital, which bought TV Guide for $1 last year; Warburg Pincus; and Platinum Equity, which is also bidding for The Boston Globe.
Other candidates include Bloomberg; Joe Mansueto, the founder of the ratings firm Morningstar who bought Inc. and Fast Company in 2005; and Bruce Wasserstein, the chairman and chief executive of Lazard, who also owns New York magazine.
But Peter P. Appert, who is an analyst at Piper Jaffray, argued that BusinessWeek’s future was cloudy. “I don’t think the prospect of meaningful earnings recovery is particularly good,” he said.
BusinessWeek executives declined to comment for this article, as did a McGraw-Hill spokesman, Steven H. Weiss. He referred a reporter to a July news release in which McGraw-Hill said it was “exploring strategic options” for the magazine.http://www.nytimes.com/2009/09/14/business/media/14bizweek.html
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