April 17, 2024

Harman Family to Keep Its Stake in Newsweek

He had great hopes for Newsweek, which he bought last year after The Washington Post Company decided to cut its losses and sell, despite warnings from his financial advisers, lawyers and family members that it would prove to be an unwise investment.

Now Mr. Harman’s family is entrusted with honoring and preserving their patriarch’s legacy.

His former associates moved quickly on Wednesday to dispel concerns that his death would be disruptive to the young and fragile Newsweek/Daily Beast Company.

According to the company, Mr. Harman’s 50 percent share would remain in the hands of his trust, which has expressed no desire to sell. His trust will have the ability to appoint someone to represent Mr. Harman’s interests and fill his place on the Newsweek/Daily Beast board. Barry Diller, who is Mr. Harman’s partner in the joint venture, will assume Mr. Harman’s role as executive chairman of the company.

“Three weeks ago, when he told me of his illness, he said he and his family wanted to continue as partners in Newsweek/Beast in all events. We will carry on, though we will greatly miss his passionate enthusiasm and belief in the venture,” Mr. Diller said in a statement.

Mr. Harman’s lawyer, Robert Barnett, reiterated that the Harman family was behind Newsweek.

“The Harman family is totally committed to Newsweek and its future,” he said. “They will continue to be active and supportive as Sidney would have wished and in Sidney’s memory.”

Mr. Barnett said that decisions about who would take on responsibility at Newsweek/Daily Beast would come in time. “There will be a time for proper announcements,” he said. “Today is not that day.”

Mr. Harman had already signaled an heir apparent: his 29-year-old son Daniel, who is a student at Columbia Business School. Daniel had visited the Newsweek offices with his father and was one of a few family members who had accompanied Mr. Harman when he met with the magazine’s staff shortly after the sale.

“Sidney would say that Daniel could be a big asset,” said one person who spoke with Mr. Harman about his son’s possible role in the company. The person spoke anonymously because the conversation was supposed to remain private. “All of us took that to mean that he was the person that was most likely to be involved from the family.”

Mr. Harman, who died Tuesday night at 92 of complications from acute myeloid leukemia, was a stabilizing force for the troubled Newsweek. He had said privately that he would give Newsweek three years to succeed and could afford to lose about $40 million without there being a material impact on what he could leave his heirs. But now that those heirs control his stake in the magazine, it remains to be seen how that commitment will be honored.

The merger with Mr. Diller’s Daily Beast left Mr. Harman sharing control of the company. Mr. Harman did not have editorial control of Newsweek, which belongs to Tina Brown, the editor. One of Mr. Diller’s top executives, Stephen Colvin, became chief executive of the combined Newsweek/Daily Beast Company. Mr. Harman’s passing would seem to further place control of the company in the hands of Mr. Diller and his deputies.

Because they have played crucial roles in running Newsweek since the merger closed in February, Mr. Diller and his associates are likely to help smooth out what could have been a very bumpy transition had Mr. Harman been running Newsweek on his own.

“If the merger with the Daily Beast had not taken place, the magazine would be in crisis now,” said Jonathan Alter, a longtime Newsweek writer who is leaving the magazine. Mr. Alter said that Mr. Harman, Mr. Diller and Ms. Brown had worked together on their plans for reinventing the struggling newsweekly and that those plans would continue moving forward. “Because that merger was implemented, nothing will change except all the other things that have been changing.”

Newsweek has had some disappointments and some bright spots as it tries to remake itself. The number of ad pages it sold in the first quarter fell 31 percent compared with the same three months last year, though the first redesigned issue under Ms. Brown’s leadership did not have its debut until March 14, when the quarter was nearly over.

Over all, ad pages have increased since the current leadership took over. But this week’s issue — with just six pages of ads — was especially thin.

Family stewardship of a publication is always a tricky thing once a patriarch or matriarch passes away. Stability is certainly possible, as demonstrated by New York magazine, which remains in the hands of the Wasserstein family a year and a half after Bruce Wasserstein’s death.

But there are cautionary tales. The Bancroft family, which owned Dow Jones and The Wall Street Journal, sold the paper to Rupert Murdoch in 2007. After the head of the family, Jessie Bancroft Cox, died in 1982, no Bancroft rose to assume her role.

Article source: http://feeds.nytimes.com/click.phdo?i=195b3cd1fbb947b88261e91b4519b938

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