Done deal: BW
goes to Bloomberg
New York mayor's publishing empire pays a few million
By Louisa Ada Seltzer
Oct 14, 2009
No surprise, the media giant that is Bloomberg LP, founded by New York mayor Michael Bloomberg, will soon be taking a major step into consumer media with its acquisition of BusinessWeek, ending months of speculation over whether the once hugely profitable business weekly would even survive.
The deal, announced yesterday, will be finalized by Dec. 1. Bloomberg reportedly will pay between $2 million and $5 million but as a part of the deal has agreed to pick up liabilities.
Just what Bloomberg intends to do with the title is unclear at this point, but Bloomberg executives are saying they do not intend to gut the title, despite heavy operating losses over recent years.
Daniel L. Doctoroff, president of Bloomberg LP, tells BusinessWeek "We are not buying BusinessWeek to gut it. We are buying it to build it.”
The challenges Bloomberg faces are several. It must come up with a strategy to get BusinessWeek running in the black again while stemming huge losses. This year alone, the weekly is expected to lose north of $40 million against revenues of $130 million.
Bloomberg must also integrate the title into its organization, which will be no small challenge in these trying times for business titles. And Bloomberg has a history of launching from within, as opposed to growing by acquisition.
But if Bloomberg can pull it off, it will gain huge advantages, extending its reach into consumer media. It will be a change to integrate BusinessWeek editorial across the wide span of Bloomberg's outlets, from TV to print and online.
For sure, BusinessWeek will be in able hands. It will be overseen by Norm Pearlstine, former editor in chief of Time Inc. and executive editor of the Wall Street Journal who’s now Bloomberg’s chief content officer. He tells BusinessWeek: “Our shared values and complementary resources give us the editorial and technological expertise, data, analysis and depth of reporting to create a new model for the business weekly.”
In some ways, the deal is a good one for McGraw-Hill, even as it unloads the title for a fraction of its worth just a couple of years ago, reportedly $1 billion. It spares the parent company further loses, and it ensures a second life and good home for a title that was for years the flagship of the company, and its most visible face.
When it first put BusinessWeek on the block several months ago, it was made clear that if no suitable buyers came along, the title might simply have been folded.
It also gets the company out of a business that fit less and less well with its other interests, such as Standard & Poor’s credit rating unit and textbook publishing. For years there was a clash of cultures, with BusinessWeek the odd duck in the organization. That will end.
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