Bloomberg Acquires Business Week Magazine

123jump.com Staff
13 Oct, 2009
New York City

McGraw Hill agreed to sell weekly newsmagazine Business Week and the namesake Web site to Bloomberg LP. The first acquisition of financial newswire company is likely to expand its reach into management and business executives.

[R]8:00 PM New York – McGraw Hill agreed to sell weekly newsmagazine Business Week and the namesake Web site to Bloomberg LP. The first acquisition of financial newswire company is likely to expand its reach into management and business executives.[/R]

McGraw Hill agreed to sell 80-year old Business Week magazine and the namesake Web site to Bloomberg LP. The terms of the deal were not disclosed but little money is expected to change hands.

Business Week in the first nine months of this year has seen its advertising revenue decline 32% to $112.6 million from $164.4 million a year ago and is expected to lose at least $40 million this year.

New York Times reported that the publication lost $43 million in 2008 and has accumulated debt of $32 million by the end of second quarter this year.

Business Week with circulation of 900,000 reaches professionals and corporate executives that value content that is broader than finance markets.

Bloomberg also publishes a magazine called Bloomberg Markets that is distributed to subscribers of 280,000 terminals primarily in the investment banking and to traders.

Business Week has a powerful brand but in the last two years the print publications have struggled. The advertising at the weekly news magazine has declined at a twice the rate of the industry. Conde Nast parent has shuttered four magazines just in last one month alone.

Total number of advertising pages at Business Week plunged to 1,900 in 2008 from the peak of 6,000 in 2000 according to the Publishers Information Bureau. At the height of Internet and telecom bubble, the magazine generated operating profit of $100 million and was valued by some analysts at $1 billion.

Though the terms of sale were not disclosed the sale price is expected to be less than $5 million and Bloomberg is expected to assume liability and potential severance payment of 400 staff according to an article on the Business Week Web site.

Bloomberg is likely to assume the debt accumulated by the publication and pay a token of less than $5 million in cash.

Bloomberg was advised by the Quadrangle Group and McGraw Hill was advised by Evercore Partners.

After the sale, McGraw Hill will be left with four television stations affiliated with ABC and five Spanish language channels that may be on the block soon as the publishing company focuses on the rating agency Standard & Poor’s and education text book publishing.