As the deadline for bids on troubled, for-sale glossy Newsweek draws nigh, The New York Times‘ David Carr takes the opportunity to imagine what the magazine might be worth. His answer: not much, maybe less than zero dollars.
The idea of a negative valuation on the Newsweek franchise is not new. The Business Insider’s Henry Blodget issued a tongue-in-cheek $1 bid for when The Washington Post Co. first announced it was selling the magazine on May 5. In doing so, Blodget said the magazine may be worth even less than that, to the tune of negative millions of dollars.
Carr, meanwhile, takes a stab at valuing the Newsweek brand, which he points out carries with it important news-analysis figures like editor John Meacham and columnist Fareed Zakaria. Nevertheless:
[I]n the current digital news ecosystem, having “week” in your title is anachronistic in the extreme, what an investor would call negative equity.
The Newsweek Tumblr takes issue with this assertion, saying “In the “digital news ecosystem,” “Newsweek” is a better name than “Time” or “People”; ever try Googling “Time”?” Good point. Back to Carr:
And in a publishing landscape filled with the lame and infirm, weeklies are the most profoundly challenged. A weekly schedule, with its tight turnarounds and frenzied production, is costly as a matter of course. Monthlies can still do step-backs for readers who don’t expect to see what happened five minutes ago, and daily newspapers have co-opted the newsweekly formula to build in real-time analysis.
Carr points out that Thomson Reuters, once mooted as a prospective buyer, doesn’t want Newsweek, and online properties like The Huffington Post and The Daily Beast would be better off without a print arm: “It is axiomatic that in the current epoch, it is much less cost-intensive to build out a new brand than to try to walk back the cat on a legacy business.” Potential buyers — rich patrons, other magazines and digital properties — are all unlikely, says Carr.
Regardless, private equity firms Ritchie Capital Management and Open Gate capital have recently expressed interest in Newsweek, suggesting that whether or not the magazine can turn around, some big players are at least trying to find a way.