Bids for the troubled weekly are expected by 5pm Thursday at investment bank Allen & Co., according to the New York Post. There are five parties in the running, including Newsmax Media, OpenGate Capital, Thane Ritchie, Sidney Harmon and Fred Drasner, the one-time partner of Daily News publisher Mort Zuckerman.
A source close to the sale said there is currently no frontrunner.
Much has been made about the financial state of Newsweek, the legendary weekly that produced $56 million in operating losses in 2009 and an $11 million loss in first quarter. The magazine has no EBITDA (negative EBITDA, actually) which has made it a hard sell to PE firms. “The amount of money they lost is shocking,” said one buyout executive who saw the Newsweek books but passed. “It’s a classic old world publishing business that did nothing to adjust to the new world reality.”
Still, it’s not all bad for Newsweek. The magazine is expected to find a buyer, most likely a strategic with the infrastructure that could chop out the money losing aspects. “Someone has to cut the expenses and rethink the business,” the source said.
Officials for the Washington Post declined comment.