NEW YORK (AdAge.com) -- Bloomberg sealed an agreement today to buy BusinessWeek from McGraw-Hill, ending a three-month sale process with an outcome that many observers had argued would be the best for the magazine.
Bloomberg outlasted or outbid other contenders, for one thing, that had fewer resources to invest in the troubled title. Triumphant today, Bloomberg said it will use BusinessWeek to further serve the business professionals already using Bloomberg terminals. BusinessWeek will also help Bloomberg, which still derives nearly all its revenue from those terminals, to diversify into consumer media and broaden its influence. It also broadens Bloomberg's involvement in ad sales considerably.
Terms were not disclosed but were said to include a purchase price and the assumption of certain liabilities. BusinessWeek itself reported that Bloomberg had offered between $2 million and $5 million.
That would be a relief not just for McGraw-Hill but the media industry in general, which was embarrassed to see another magazine titan, TV Guide, sell for a token $1. BusinessWeek had at least been expected to fetch more, partly because its audience is much more desirable to high-end advertisers but also because BusinessWeek, unlike TV Guide, was sold with its website attached.
"The acquisition of BusinessWeek will strengthen Bloomberg's online, TV and mobile products," Bloomberg Chairman Peter T. Grauer said in a statement. "Together, the BusinessWeek.com and the Bloomberg.com websites will have more unique visitors than any nonportal business and financial site."
"We are uniquely positioned to preserve and build the market presence of BusinessWeek," said Bloomberg's chief content officer, Norman Pearlstine, who will also become chairman of 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."
The magazine's future, however, is by no means steady from here on out. It is said to be losing tens of millions of dollars a year at this point, a fact that led BusinessWeek itself to propose big cuts to McGraw-Hill earlier this year. It is also not yet clear what happens to the weekly's staff, how many will stay and how many will be cut as operations are integrated into Bloomberg's.
But new ownership will undoubtedly mean renewed energy -- and competition -- in the business-media space. BusinessWeek and its rivals in the business press have suffered dwindling ad pages over most of this decade, partly as a result of the rise of digital media.
"I am very proud of the tremendous contributions BusinessWeek has made to the McGraw-Hill Cos. throughout its rich history," Harold McGraw III, chairman, president-CEO of the McGraw-Hill Cos., said in a statement. "It is a truly outstanding franchise and the best source of business reporting in the world. We are pleased that we have reached an agreement for BusinessWeek to be acquired by Bloomberg, which shares the same high standards for editorial independence, integrity and excellence that have long defined BusinessWeek."