Newsweek magazine has been sold to Sidney Harman, 91-year-old husband of California Congresswoman Jane Harman, reportedly for a one dollar bill. The new owner, a retired stereo equipment manufacturer, is apparently a publishing novice.

No one seems to be asking, however, who or what is really behind the purchase of what has become a money-losing machine. And, some early news reports on the sale contain inaccuracies. For example, the New York Times reported that Newsweek underwent a redesign last year "in hopes of attracting more readers." In fact, Newsweek itself cut its audience from 2.6 million to 1.5 million as part of its failed repositioning strategy. Readers didn't leave Newsweek -- Newsweek left the readers.

The magazine has gone from profits of about $30 million in 2007 to losses of the same magnitude in 2009. It seems that Newsweek has been operating like a ship with a mis-calibrated compass.

The New York Times reported today that, "In its new owner, Newsweek appears to have an engaged and active steward." An experienced captain, however, is what Newsweek will need to achieve real business success, someone who can keep the venerable magazine from running aground for a second time!

Then, there's the tax write-off sub-plot. When Washington Post Company first put Newsweek up for sale, talk was that WaPo would retire the magazine's debts for a clean sale. Now it's reported that Harman's deal is to pick up the debt and liabilities and pay just $1 for the magazine. It remains to be seen what the strategy is behind that move.

STRAT for July 2010 carried a detailed analysis of Newsweek's failure.

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