Posted by: Jon Fine on August 4, 2009
Morningstar founder Joe Mansueto has expressed interest in pursuing a deal for BusinessWeek, individuals familiar with the situation say, and representatives from his Mansueto Ventures are expected to meet with BusinessWeek management at some point in the next several days for a detailed presentation of the magazine and its finances.
In a brief email exchange, Mansueto said he had “no comment regarding the potential BusinessWeek sale.” In 2005 Mansueto bought Inc. and Fast Company from Gruner & Jahr for around $35 million in cash plus the assumption of certain liabilities.
After two years in which his magazines posted some positive indicators—especially Fast Company, which netted 20%-plus ad page gains in 2007 and 2008—both of Mansueto’s business titles backslid considerably in 2009. For the first six months of this year, Fast Company’s ad pages dropped 33.6% to 171.3, and Inc’s fell 29.0%, to 262.4.
Yesterday, representatives of Bruce Wasserstein met with BusinessWeek management to view more detailed data regarding the magazine’s finances.
A spokesman for Wasserstein, who through various companies owns New York Magazine, The Deal, and a large stake in business publisher Penton Media, declined to comment. A spokesman for the McGraw-Hill Companies, the owner of BusinessWeek, also declined to comment.
As previously reported, Mansueto would join Wasserstein and three private equity players—Platinum Equity, Warburg Pincus, and OpenGate Capital—in taking in such a presentation concerning the magazine, but attending these sessions does not guarantee a company will place a final bid. Two executives familiar with the buy-side of the process said that no firm deadline for final bids has yet been set.
Meanwhile, financial data regarding BusinessWeek’s stressed financial state continues to surface. In the first quarter of 2009— roughly the nadir of the ad downturn for magazines—total revenues for BusinessWeek and its ancillary products came to $27.8 million, down from $36.9 million in the first quarter of 2008, says the financial data initially provided to potential buyers.
If you include corporate overhead charges like rent, according to that data, BusinessWeek lost $16.6 million in the first quarter of 2009.