The merger between Newsweek and The Daily Beast is one step closer to completion. The two companies have hammered out staffing issues that will add some 36 Beast employees to Newsweek’s union and raise certain employees’ pay accordingly. But for Newsweek, the pact is likely to mean widespread buyouts.
The agreement, announced Thursday by the Newspaper Guild of New York, which represents about 90 Newsweek editorial staffers, resolves issues that had been holding up completion of the merger of the 76-year-old newsweekly and Web upstart, which was announced Dec. 6.
Both sides also agreed to meet within 90 days of the merger to explore “cost-effective solutions designed to ensure the viability of the company” and buyouts will be offered soon to certain classes of Newsweek employees. Details were still to be negotiated.
“We’re hoping [Beast founder] Tina Brown can come up with a magic touch and make things work,” said Guild president Bill O’Meara.
Morale at the newsweekly has been falling since the merger was announced and Brown, who was named editor of the combined entity, has begun putting her own hires in place, spurring rumors that further cuts were planned.
Staff isn’t all that’s being cut at Newsweek. The title recently slashed its cover price by $1, to $4.95, restoring it to its pre-2010 price. The price cut could help Newsweek compete for newsstand sales with bigger rival Time, which also costs $4.95. Single copy sales represent a small percentage of overall circ for both titles, but each has seen sales fall off dramatically lately.
In the first half of 2010, Newsweek’s newsstand sales dropped 30 percent to 45,298 while Time’s fell 28 percent to 72,164.
With the labor agreement in place, the Beast and Newsweek are now aiming to close the deal in the next few days. After some back and forth on where the combined entity will operate, it now looks like Beast employees will experience Newsweek’s dreary Hanover Square offices after all. The move is expected to be temporary, though, until Beast parent IAC’s more glamorous headquarters on West 18th Street can be configured to accommodate both staffs.
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