October 11, 2010

Daily Beast-Newsweek deal close, but will personalities mesh? (WSJ, GUA, HUFF)

By Nancy Tartaglione

The likelihood of a deal between Newsweek and The Daily Beast is increasing, reports The Wall Street Journal, but a key question is whether a merged operation would be big enough for the personalities involved. The paper notes that a deal would see Daily Beast co-founder and co-owner Tina Brown become the editor of Newsweek on top of her existing duties, while "answering to two bosses who are heavily invested, both emotionally and financially, in their respective properties."

Sidney Harman, who recently acquired Newsweek, has said he didn't buy the magazine to make money. Rather, it was because he was drawn to the challenge of turning it around and has strong convictions about how to make that so, says the Journal.

People familiar with Mr. Harman's thinking said he may be wary of handing the reins to a strong-willed editor who also answers to another boss—Barry Diller, chairman and chief executive of Daily Beast owner IAC/InterActive Corp.

Newsweek is on track to lose at least $20 million this year, according to the Journal. The Daily Beast, on the other hand, is expected to lose about $10 million this year, a person familiar with the matter told the paper, but executives say it's on a pace to be profitable in two years.

Harman continues to interview candidates for the post of editor of Newsweek.

Meanwhile, a report in The Guardian last week said Brown's move to merge with Newsweek is one "that could intensify her rivalry with Arianna Huffington."

Within the Manhattan media orbit, Brown's moves are largely viewed in the context of her rivalry with Huffington. Brown, who is known for her competitiveness, is now locked in a battle with Huffington for staff and traffic. And it's personal. "They simply cannot stand each other," said one media executive familiar with both women. "Arianna's rise is deeply wounding to Tina, and the raison d'etre of the Daily Beast is to try to catch Arianna." The feeling is apparently mutual: "Tina, in her heyday, didn't give Arianna the time of day. There's a certain amount of schadenfreude here."

In response to the Guardian article, The Huffington Post's HuffPost Comedy blog "obtained from an unnamed media executive the transcript of an IM chat between the two women," which included the following exchange:

AriHuff: Got to hand it to The Guardian. We are sooooo busted. What's really sad is that this is exactly the type of fearless, extremely well-sourced investigative reporting that sites like ours are putting out of business.

TBrown: Yeah, I know. Maybe it was that guy lurking around at the book party the other night. He must've overheard us discussing our diversionary plans to go to our girls' college football game and take them to dinner afterwards. How did he figure out it was all an elaborate, time-consuming, and pointless act?

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