Posted by: Tom Lowry on October 12, 2009
An announcement regarding the sale of BusinessWeek is expected within the next few days, say executives familiar with the situation.
By declaring a winning bidder, BusinessWeek parent McGraw-Hill Cos. is moving forward a process that started earlier this year when the company began soliciting interest from potential buyers. On July 13, McGraw-Hill officially acknowledged it was exploring a sale after Bloomberg News reported the sale earlier in the day.
Among the remaining bidders are Bloomberg LP and investment firm ZelnickMedia, with Bloomberg widely considered to be the front-runner. Zelnick is being advised by former Wall Street Journal publisher L. Gordon Crovitz and by Thomson Reuters (The Thomson Reuters involvement was first reported by the Web site paidcontent.org).
Despite media reports portraying the BusinessWeek sale as an escalation of the battle between Bloomberg and Thomson Reuters, which compete aggressively in financial data, the role of Thomson Reuters in a Zelnick-led bid has been overstated. Thomson Reuters is not offering any cash for the bid and would have no direct stake or involvement in running the magazine. What the company is offering is the potential for co-marketing and back office support (let’s say the Zelnick team decides to shutter a BusinessWeek bureau, Reuters would offer its own office space to the magazine’s staff for a fee). And it may be that once a month Thomson Reuters would be offered a few pages in the magazine as an insert for its own news agency’s work. Reuters has a similar arrangement with The New York Times-owned International Herald Tribune. A Thomson Reuters spokesman declined to comment.
The field of bidders was winnowed when previously interested parties dropped out over the last several weeks, including New York Daily News owner Mort Zuckerman, New York magazine owner Bruce Wasserstein and private equity firm Open Gate Capital, which owns TV Guide. Even Donald “You’re Fired” Trump took an early look and passed, says one source close to the sale.
During the past three months, the sale of the magazine has fueled all kinds of speculation, from erroneous reports that McGraw-Hill CEO Terry McGraw just wanted to shut down BusinessWeek to rumors of there being a billionaire mystery bidder who had been stealth throughout the sale process. Of course, all of this has further deepened the gut-wrenching anxiety among the 400-plus, global workers at BusinessWeek who will soon learn their fate.
Clearly McGraw-Hill’s intention is to have the deal close by year-end. A McGraw-Hill spokesman declined comment.